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flag India faces backlash over upcoming tobacco tax hike, with retailers and farmers warning of economic harm and smuggling.

flag India’s government faces mounting pressure to reverse a new excise duty on tobacco products set to take effect February 1, 2026, which will raise taxes to ₹2,050–₹8,500 per 1,000 sticks based on length. flag The Federation of Retailer Association of India (FRAI), representing 80 lakh small retailers, warns the sudden price surge will harm micro-businesses, reduce foot traffic, and push consumers toward illegal markets. flag Farmers’ groups also caution the hike could devastate legal tobacco supply chains and boost smuggling. flag Both groups urge a revenue-neutral, gradual approach to avoid destabilizing the informal economy and undermining recent tax reforms.

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