Andhra Pradesh Chief Minister N. Chandrababu Naidu has written separate letters to Union Ministers Nirmala Sitharaman and Piyush Goyal over the problems being faced by tobacco farmers in Andhra Pradesh. In his letters, the Chief Minister highlighted the difficulties faced by farmers cultivating Flue-Cured Virginia tobacco in the state following the revised taxation policy on cigarettes, which came into effect from February 1, 2026.

 

He stated that the increase in GST on cigarettes from 28 percent to 40 percent, along with a steep hike in excise duty based on cigarette category and length, has adversely affected the interests of tobacco farmers. According to the Chief Minister, excise duty has been increased from 2,050 rupees to 8,500 rupees per 1,000 cigarettes. Mr. Naidu said the combined impact of GST, excise duty, and National Calamity Contingent Duty has slowed cigarette purchases in the market due to the ‘tax-on-tax’ burden. As a result, tobacco prices have fallen sharply.

 

He pointed out that the opening auction price of tobacco, which was around 280 rupees per kilogram last year, has dropped to about 250 rupees per kilogram this year. The Chief Minister also noted that cigarette manufacturing companies have reduced procurement quantities, causing losses to farmers. He added that exporters are also facing challenges due to prevailing geopolitical conditions at the international level. He urged the Union Government to review the enhanced tax structure and excise duty policy to protect the interests of tobacco farmers and help stabilise the market.