The Centre has responded positively to four key proposals submitted for the benefit of tobacco farmers and exporters, says Tobacco Board Chairman Yashwanth Kumar Chidipothu.
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The Union Government has responded positively to Andhra Pradesh’s request to reduce the Goods and Services Tax (GST) on unmanufactured tobacco meant for exports from 40% to 28%, offering relief to exporters and raising hopes among tobacco farmers, amidst the FCV tobacco crisis in the State.

Acting on the directions of Chief Minister N. Chandrababu Naidu, Agriculture Minister K. Atchannaidu, along with other State Ministers and Members of Parliament, met Union Finance Minister Nirmala Sitharaman and Union Commerce and Industry Minister Piyush Goyal in New Delhi on Monday and Tuesday to press for measures aimed at strengthening the tobacco sector.

Tobacco Board Chairman Yashwanth Kumar Chidipothu, who was part of the delegation, told The Hindu on Wednesday that the Centre had responded positively to four key proposals submitted for the benefit of tobacco farmers and exporters across the country.

He said the State government urged the Centre to roll back the GST on unmanufactured tobacco used for exports from 40% to 28%, arguing that the higher tax burden locks up exporters’ working capital and weakens India’s competitiveness in global markets. In fact, this is the tax which would be reimbursed after exporting the goods, but it withholds the money until reimbursed.

The delegation also sought market intervention to protect farmers by providing at least ₹20 per kg as support for tobacco. While the Union Government did not agree to provide direct assistance at the proposed rate, it assured the delegation that alternative incentive mechanisms would be explored to safeguard farmers’ interests.

Another key demand was the extension of benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to tobacco falling under the HSN 2401 series, a move expected to improve export prospects.

Niryat Protsahan

During the discussions, the Union Commerce Minister advised the Tobacco Board to participate in international roadshows, trade exhibitions and expos to expand the global presence of Indian tobacco. He encouraged the Board to utilise the Niryat Protsahan, a sub-scheme under the Centre’s Export Promotion Mission to strengthen export promotion efforts.

Published - July 23, 2026 11:00 am IST