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Informist, Thursday, Jul. 23, 2026

 

--ITC: Tax hike on cigaretttes to fuel growth in smuggled cigarettes 

--CONTEXT: ITC CMD Puri's comments at its 115th AGM 

--ITC: About 94% of co's businesses are linked to agri crops, plantations 

--ITC: Plan to develop 4 additional open sky controlled agri clusters 

--ITC: Working on science led tobacco, agri crops for future growth 

 

By Avishek Rakshit and Simran Rede

 

KOLKATA/MUMBAI – ITC Ltd., which has been focussing on rolling out new products and entering new consumer goods categories in the recent past while strengthening its supply chain, expects its addressable market to expand to INR 8 trillion by 2035, Chairman and Managing Director Sanjiv Puri said on Thursday. 

 

"The Indian FMCG market is poised for significant expansion, with the company's addressable market estimated at around INR 8 trillion by 2035, pointing to the immense headroom to grow," Puri told shareholders at the company's 115th annual general meeting. 

 

Puri said the consumer profile in India was evolving rapidly. "The rise of aspirational Bharat, premiumisation, Gen Z and Gen Alpha consumers, expanding digital access and the growth of quick commerce are reshaping categories, channels and expectations," he said. "Today's maximiser consumer simultaneously seeks taste and nutrition, convenience and trust, indulgence and wellness, value as well as premium experiences."  

 

During the annual general meeting in July 2024, Puri had said that ITC saw an addressable market of INR 5 trillion by 2030. However, the top official did not mention the company's current market potential or addressable market. 

 

Currently, ITC earns around 47% of its revenue from cigarettes and the remaining 53% from non-cigarettes consumer goods sales, commodity exports and trading, and paper and paperboards business. However, over 70% of the company's profits come in from cigarettes, making it the prime focus vertical for the company. 

 

Puri said ITC's cigarette business continued to deliver a resilient performance during the year ended March despite a sharp tax hike on cigarettes, which sector analysts expect will impact ITC's sales and revenue direly. 

 

"The unprecedented increase in the incidence of taxes post February 1, 2026 will have the unfortunate consequence of fuelling the growth of smuggled and domestically manufactured tax evaded cigarettes impacting the legal industry," Puri said. 

 

ITC maintains that when taxes on cigarettes are raised sharply leading to steep price hikes, consumers tend to shift towards imported, and tax evaded cigarettes due to lower prices. While on one hand, it leads to loss of potential market and consumers for companies such as ITC, tax evasion also hurts the government exchequer. ITC is the market leader in cigarettes in the country, commanding over 72% market share.

 

Talking about developing its supply chain which largely involves agriculture, Puri said the company will drive farming as a service ecosystem, in which crop value chains are customised to meet specific bi-annual yields.

 

ITC is the country's largest private sector agricultural enterprise, which doubled its revenue from this segment in just over five years to nearly INR 203 billion in 2025-26 (Apr-Mar). On the one hand, the company's agricultural division works with farmers, develops seeds and products and sources raw materials which are used across its portfolio like cigarettes, consumer products, and hotels, and on the other, it also helps ITC export commodities and value-added commodities enabling the company to earn foreign exchange. 

 

"With over a century of engagement with agriculture, 94% of your company's businesses are linked to agri-crops or plantations, generating substantial livelihoods," Puri said.

 

While ITC is developing science and technology backed seeds which are climate-resilient, nutritionally enriched and have high yields, the company plans to develop four additional hybrid, open-to-sky and controlled environment agriculture clusters to create a reliable traceable supply chain for fresh produce.

 

Highlighting its non-cigarettes consumer goods portfolio as a key future growth driver for the company, Puri said, "In line with the ITC Next strategy, the company is making rapid progress in not only scaling its core power brands but developing a future-ready portfolio that is constantly alive to evolving consumer needs."

 

Puri said ITC's strategy is to reinforce its domestic capability, create and nurture brands that are born in India but made for the world with impeccable quality and trust that can delight consumers globally. ITC recently commissioned eight new plants and six new projects are in the pipeline. 

 

"Your company's aspiration to be the number one FMCG player is anchored on this larger vision. Today, ITC's portfolio of over 30 world-class FMCG brands represents annual consumer spending of nearly INR 37,000 crores (INR 370 billion) and reaches nearly 280 million households while being exported to over 70 countries," Puri said.

 

At 1219 IST, shares of ITC traded nearly 1% higher at INR 283.20 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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