For the first time in modern history, the world is putting the cigarette down.
In 2000, roughly 1.38 billion people used tobacco. By 2024, that number had fallen to 1.2 billion, even as the global population grew by nearly two billion. Adult prevalence dropped from 34% to 22%. One in three adults became one in five. Since 2010 alone, about 120 million people quit.
This is one of public health’s quiet wins. It is also reshaping a trillion-rupee industry and the jobs inside it.
But averages hide their outliers. Behind the falling global line sits a country of 1.4 billion people where the trend appears to run the other way. India is the world’s second-largest tobacco market and its most confusing one. One set of surveys says Indians are quitting. Another says they are spending more than ever.
Both cannot be true. Except they are.
This edition follows the smoke. From a multinational cutting 9,000 jobs, to an Indian paradox that took a change in survey design to expose, ending with the tax overhaul that will test whether price can do what awareness could not.
In this edition:
1. The first 9,000
2. India didn’t get the memo
3. Two surveys, two Indias
4. What’s actually burning
5. The December reckoning
1. The first 9,000
On June 29, British American Tobacco told its staff that roughly 9,000 jobs would go. That is close to one in five of its 47,000-strong workforce. About 5,500 roles will be removed outright and another 3,500 outsourced by the end of 2026, part of a plan to save £600 million by 2028.
The headlines blamed artificial intelligence. That is half the story. AI and outsourcing are the tools. The pressure is older and simpler. People are buying fewer cigarettes. BAT expects global cigarette volumes to fall about 2.5% this year. When your core product shrinks every year, you eventually rebuild the company around something else.
That something else is smokeless. BAT’s vaping, heated-tobacco and nicotine-pouch brands, Vuse, glo and Velo, already reach 31 million consumers and bring in 18.2% of revenue. The company wants that at half of all revenue by 2035. Globally, more than 100 million people now vape, a category that barely existed fifteen years ago.
So the decline is not really a decline. It is a migration. Nicotine is not leaving. It is changing packaging, moving from a lit stick taxed and stigmatised for decades to a device with a rechargeable battery.
For workers, that distinction matters. A shrinking combustible business needs fewer factory hands and more software. This is the part of the automation debate that usually gets missed. Jobs do not only vanish because a machine learned to do them. They vanish because the thing people wanted stopped being the thing they buy. Technology is how BAT is cutting. The consumer is why.
2. India didn’t get the memo
Now turn to India, where 13.5 lakh people die from tobacco every year.
For a while, the story here matched the world’s. The Global Adult Tobacco Survey and the National Family Health Survey both showed use falling. Among men, prevalence dropped from about 43% to 29% between 2015-16 and 2019-21. The country appeared to be winning.
Then came the Household Consumption Expenditure Survey of 2023-24, the government’s giant audit of what Indians actually spend money on. It told the opposite story. Adjusted for inflation, per capita spending on tobacco rose 58% in rural India and 77% in urban India over twelve years. The share of rural households buying tobacco climbed from 59% to 69%. In cities it went from 35% to 46%. The number of tobacco-consuming rural households crossed 13 crore.
So which is it. Is India quitting, or is India spending more than ever.
This is the paradox at the centre of the edition. One dataset shows a country walking away from tobacco. Another shows tobacco pushing deeper into household budgets. The gap is not a rounding error. Prevalence is down by double digits while spending is up by more than half. Both surveys are official. Both are recent. Both are, in their own way, correct.
The reconciliation is not about which survey lied. It is about what each one asked. And the answer says something uncomfortable about how we measure habits people would rather not admit to.
3. Two surveys, two Indias
The two surveys disagree because they are not measuring the same thing.
GATS and NFHS ask an individual a direct question. Do you use tobacco. It is self-reported. Tobacco carries stigma, so people underplay it, especially to a stranger with a clipboard. Researchers call it a shame item. When you ask someone whether they smoke, a share of them quietly say no. Prevalence looks lower than it really is.
HCES asks a different question. Did this household spend money on tobacco in the last seven days. It does not care about your habit. It cares about your wallet. A person can deny smoking in a health survey while the family’s spending still records the purchase.
There is a second wrinkle. The older 2011-12 expenditure survey was a single-visit affair. One surveyor ran through everything from food to fuel to clothing in one sitting, and tobacco sat near the very end. By then respondent fatigue had set in, and the item was undercounted. The 2023-24 survey fixed this. Households were visited three times across a quarter, the questionnaire was split into modules, and paper forms became tablets with real-time checks. The product list expanded from 347 items to 405.
So part of the apparent surge is not new smoking at all. It is better counting. India may have mistaken shy survey answers for a real retreat, when tobacco’s footprint in the household budget was always deeper than the health numbers admitted. Measurement decides the story. Ask about the habit and India looks like it is quitting. Ask about the money and it is not.
4. What’s actually burning
If Indians are not quitting, what are they consuming. The mix is shifting, and it tracks income.
The bidi, the cheap hand-rolled staple of the rural poor, is slowly fading. Its share of rural households fell from 26.9% to 23.2%. It is the one traditional product clearly in retreat.
Cigarettes are moving the other way, and fast. In urban India, the share of households buying cigarettes more than doubled, from 8.4% to 18.1%. In rural India it jumped from 4.8% to 11.2%. Among the wealthiest fifth of households, cigarettes are now the dominant tobacco product. Chewing tobacco, meanwhile, remains the single largest category by value in rural India.
Put together, these numbers tell a story that runs against intuition. As Indians earn more, they do not leave tobacco behind. They trade up. The labourer’s bidi gives way to the office worker’s cigarette. The product gets more expensive and more premium, but the habit stays. Rising incomes have not thinned India’s tobacco base. They have upgraded it.
This is why awareness campaigns and warning labels have limited reach here. For a daily-wage worker, a few-rupee tobacco hit is not a lifestyle choice. It is a stimulant that blunts hunger through a long shift, cheaper than a meal. For a salaried professional, the cigarette is a small affordable ritual. Neither responds much to a health warning. Both, in theory, respond to price. Which is exactly where policy went next.
The consumption base is not shrinking. It is climbing the income ladder, one product tier at a time.
5. The December reckoning
India’s tax relationship with tobacco has always been lopsided. The economic cost of tobacco use runs near ₹1.8 lakh crore a year, close to 1% of GDP. For every ₹100 the government collects from tobacco, society absorbs roughly ₹816 in health and productivity costs.
In December 2025, Parliament moved to narrow that gap. The Central Excise (Amendment) Act, 2025, notified on 11 December, delivered one of the steepest tobacco tax hikes in India’s history. The duty on standard cigarettes jumped from ₹2,700 to ₹11,000 per thousand sticks. Chewing tobacco went from 25% to 100%. Smoking mixtures leapt to 325%. Unmanufactured tobacco rose to 70%. Nicotine products containing tobacco were pulled up to 100%.
The timing is not accidental. The GST compensation cess expires on 31 March 2026, and without action the total tax on tobacco would have fallen. The new excise plugs that hole. Crucially, unlike the old cess, excise flows into the shared pool, so 41% of it now reaches state governments. That aligns state incentives with enforcement, at least on paper.
One product was deliberately spared. The bidi, more harmful than the cigarette and rolled overwhelmingly by poor women, stays close to untouched at roughly one rupee per thousand. Around 4.5 crore Indians depend on the tobacco economy for a living, and nearly 50 lakh are registered bidi workers. Taxing them harder is politically radioactive.
Even India’s own finance ministry concedes the tax take still sits near 53% of retail price, well short of the WHO’s 75% benchmark. The reckoning has begun. It is not finished.
Will India follow?
Step back, and the picture resolves into a single question.
The rest of the world offers a template. Users fell, volumes shrank, and a giant like BAT is now cutting 9,000 jobs and betting its future on devices instead of cigarettes. Decline, disruption, reinvention, in that order.
India sits one stage behind, and its version is messier. Its decline may have been partly a mirage, an artefact of shy answers and tired surveyors. Its consumption is not collapsing. It is climbing the income ladder and burrowing into the budgets of the poorest households. And its tobacco economy feeds crores of livelihoods that no government can casually disrupt.
So the December tax hike is the real test. Price is the one lever that has moved habits everywhere else. Whether it bends India’s curve, or simply pushes spending higher without denting use, will decide if the world’s second-largest tobacco market finally joins the global exit, or keeps proving that averages are just stories with the outliers removed.
We will be watching the next survey closely.
Disclamer- This content is for informational and educational purposes only and does not constitute investment, legal, or tax advice. Please consult qualified professionals before making any financial decisions. MintWit Financial Services LLP is an AMFI-registered Mutual Fund Distributor (ARN-283168); however, all investments are subject to market risks and returns are not assured.
