Central government on Wednesday approved an ordinance to ban production, import, distribution and sale of electronic cigarettes, Finance Minister Nirmala Sitharaman announced at a press conference.
The government, in a press note, said the move will advance tobacco control efforts in the country and will help in reduction of tobacco use. The ban, however, does not include traditional tobacco products.
The immediate consequence of this announcement was an improvement in the health of cigarette manufacturers’ stocks. 🧐
Godfrey Phillips was up by 5.55% while ITC was up about 1%. Golden Tobacco rose by about 4.6% and VST by 3.4%.
The Prohibition of E-cigarettes Ordinance, 2019, according to The Indian Express, provides for a maximum imprisonment of up to one year along with a penalty of Rs 1 lakh against first-time violators. For repeat offenders, the jail time can go up to three years and penalty to Rs 5 lakh.
Reuters reported after the announcement that the ban will hurt the India expansion plans of companies making vaping products such as U.S.-based Juul, as well as Philip Morris, which manufactures a heat-not-burn tobacco device. Both companies had planned to launch these products in India, said Reuters.
The fact that cigarette companies will only benefit from this announcement was not lost on Twitter: