Thank you China for smoking: Indian tobacco heads to biggest market

Commerce Department has secured market access rights for Indian tobacco in China- the global leader in smoking

Hemmed in by increasingly restrictive policies and changing social mindset, Indian tobacco growers may find solace soon in sending out shipments to China, the nation with the highest number of smokers globally.

The decision was taken during a two-day visit by Commerce Secretary Anup Wadhawan to Beijing last week, the government said on Monday. In a meeting with Zhang Jiwen, Vice Minister of General Administration of China Customs (GACC), India has pushed rights for market access and sought to calm Chinese concerns over quarantine issues for agriculture and allied products.

Quality tobacco on a par with international standards is available in India at competitive prices and there is good potential for export of Indian tobacco to China, according to the government. The revival of the phytosanitary protocol with China is expected to boost tobacco exports to China and prove economically beneficial to Indian farmers.

India exported a total $934 million worth of tobacco - both raw and processed as well as manufactured products like cigarettes - and tobacco substitutes in 2017-18. A majority of these headed to Belgium and the United Arab Emirates, with only a negligible amount finding its way to India’s northern neighbour.

China is a smokers’ paradise, with more than 300 million smokers (nearly one-third of the world’s total), making it the largest market for tobacco. According to the World Health Organization, about one in every three cigarettes smoked in the world is sold in China. A mind-boggling 2.3 trillion cigarettes were consumed in China in 2009 – more than in the other top  4 tobacco-consuming countries (Indonesia, Japan, the Russian Federation, and the US) combined, it adds.

The international arm of China’s gigantic state tobacco monopoly, China National Tobacco Corp, is planning on going public. Documents necessary for an initial public offering were recently submitted by it in Hong Kong.

Market access push

Talks on allowing market access to Indian agri produce gained pace last year after Prime Minister Narendra Modi met Chinese President Xi Jinping in Wuhan. Subsequently, a protocol on exports of non-basmati rice was signed in June, while the GACC has also approved six Indian mills for export of rapeseed meal. Finally, the protocol on exports of fish meal and fish oil was signed during the visit of China’s Vice Minister of GACC to New Delhi in November 2018.

The GACC has also deputed experts to inspect Indian soybean meal establishments and pomegranate orchards and pack houses in December 2018. The SPS Protocols for these products are at an advanced stage of negotiation, the government said.

In the latest meet, the government has requested Beijing to expedite market access for other products like okra, soybean, bovine meat, and dairy products.

India’s trade deficit with China hit a historic high of $63 billion in the last financial year.