Vijayawada: Chief Minister Chandrababu Naidu has urged the Centre to review the revised tax policy on cigarettes, warning that the move is severely impacting tobacco farmers in Andhra Pradesh and threatening the livelihood of thousands of families dependent on the sector.
In separate letters to Union Finance Minister Nirmala Sitharaman and Union Commerce and Industry Minister Piyush Goyal, Naidu highlighted the difficulties being faced by Flue-Cured Virginia (FCV) tobacco farmers following the revised taxation policy on cigarettes that came into effect from February 1, 2026.
The Chief Minister pointed out that the increase in GST on cigarettes from 28 per cent to 40 per cent, along with a steep hike in excise duty ranging from Rs 2,050 to Rs 8,500 per 1,000 cigarettes depending on category and length, has adversely affected tobacco farmers. He said the cumulative impact of GST, excise duty and national calamity contingent duty has slowed market purchases and weakened demand.
Naidu stated that the opening auction price of tobacco, which stood at Rs 280 per kg last year, has now fallen to Rs 250 per kg. He said companies procuring tobacco have reduced purchase volumes, causing heavy losses to farmers. He also noted that exporters are facing difficulties due to prevailing geopolitical conditions in international markets.
The Chief Minister said nearly 43,000 tobacco farmers and lakhs of workers dependent on the sector are facing uncertainty. He cautioned that excessive taxation on legal cigarettes could encourage the growth of illegal tobacco products in the market. He appealed to the Centre to reconsider the enhanced tax structure and excise duties to stabilise the market and protect farmers’ interests.
In another letter to Piyush Goyal, Naidu raised concerns over the crisis facing aqua farmers and shrimp exporters due to the high tariffs imposed by the United States on shrimp imports. He said the burden of taxes on Indian shrimp exports has increased to nearly 60 per cent, threatening Andhra Pradesh’s aqua exports worth Rs 25,000 crore and affecting around 2.5 lakh aqua farmer families and more than 30 lakh workers.
The CM sought an increase in working capital limits by 30 per cent, a 240-day moratorium on interest payments, and temporary exemption from 5 per cent interest and 5 per cent GST. He urged the Centre to include shrimp in the food supply for the Indian armed forces and sought enhancement of the Kisan credit card limit for aqua farmers to Rs 1 lakh along with special train services for shrimp transportation from southern to northern states.
In a separate letter to Sitharaman, the Chief Minister sought a Rs 100 crore corpus fund through the National Fisheries Development Board for setting up a Prawn Producers Coordination Committee in Andhra Pradesh and also requested establishment of an additional Regional Fisheries Institute in the state.
