India's tobacco giant tries short cigarettes as taxes hit demand

Mumbai

INDIA's smokers are favouring cheaper options such as chewing and leaf-wrapped tobacco over cigarettes, as rising taxes prompt British American Tobacco plc's Indian associate to sell shorter sticks with lower duties.

"Earlier on, as the taxation was increased, the cigarette industry showed resilience. Now, it has suddenly begun to drop," Yogesh Deveshwar, chairman of Asia's third-biggest listed tobacco-seller ITC Ltd, said in an interview with Bloomberg TV India. "The tobacco consumption basket continues to grow, whereas the cigarette share continues to shrink."