“E-Cigarettes banned”. This was the first statement the country’s Finance Minister Nirmala Sitharaman released after The Cabinet on Wednesday met and discussed upon an ordinance seeking to ban the production, import, distribution and sale of electronic cigarettes, and a jail term for violators. Not only this, the ordinance even bans the advertising of e-cigarettes in India
Earlier, the Prohibition of E-cigarettes Ordinance, 2019 was examined by a Group of Ministers (GoM) following directions from the Prime Minister's Office.
The Ordinance proposes a prison term of up to 1 year and a fine of Rs 1, 00,000 for first-time offenders. For repeat offenders, the quantum of punishment escalates to jail terms of up to three years, with a penalty of up to Rs 5 lakh.
The decision marks a major win for the Modi Government. Banning alternative smoking devices like e-cigarettes, vape and e- nicotine flavoured hookahs were one of the topmost priorities during the first 100 days of the government.
This comes as a major blow to e-cigarette manufacturers such as JUUL and Philip Morris International, jeopardizing their plans of expanding into the attractive Indian market.
The discussion regarding the ban on e-cigarettes has been on the forefront for some time now, with as many as sixteen state governments in India having prohibited e-cigarettes. However, it is also believed that the government’s staunch stance on the issue is in great part due to the extensive lobbying by the tobacco industry. The cigarette industry is a lucrative one for the country, with as much as 2% of tax revenues being generated from it. Not only this, With the government owing 28% of ITC, and the manufacturer being responsible for 85% of cigarette sales in the country, a blanket ban on e-cigarettes only serves as a boost to traditional cigarette manufacturers.
The ban is also said to be in favour of the indigenous tobacco industry in India. Even the Bhartiya Kisan Union (BKU) has appealed to the government to ban e-cigarettes and vaping products in the country. This is because e-cigarette companies don’t use Indian tobacco, and banning them will help protect the interests of Indian tobacco harvesters.
Despite the ban, the effect the same will have on the industry is unclear. According to a recent study by Delhi-based NGO Consumer Voice, over 36 e-cigarette companies are operating in India when officially there is no permission to any of them. Not only this, it is believed that the ban may also pose another problem in the Indian market, with the companies continuing to function illegally in the country. The ban may also create an underground market, wherein companies stay outside the ambit of regulatory authorities, which can lead to much greater harm. Just like spurious alcohol, the Indian market might be flooded with substandard products with a higher concentration of harmful products. The banning of the product will also have the unintended consequence of people switching back to combustible cigarettes.
However, it is imperative to understand that the government right now has brought an ordinance, intending to ban e-cigarettes. Such orders are typically issued in India as an emergency measure when parliament is not in session. It can lapse if it is not approved when lawmakers convene against in the next session, which will most likely be held around November
The same will have to be replaced with a Bill in the next session of the Parliament. Once the Parliament approves the Bill, the proposed ban on such products will get a legal backing. Considering the ruling party’s majority in both the houses, a ban on e-cigarettes is all but done.