Indian Tobacco Sector's Total Cumulative Intrinsic Economic Value Estimated At Rs 11,79,498 Crore

Tobacco sector in India is among the highest contributors in terms of total economic value generated at Rs 11,79,498 crore, according to a latest update from ASSOCHAM. An estimated 45.7 million people depend on tobacco sector in India for their livelihood, with the sector representing one of the most thriving farming-processing-manufacturing-trading-exporting continuum. TARI (Thought Arbitrage Research Institute) has shared its study with ASSOCHAM, stating that as per an economic metric model it has measured the total cumulative intrinsic economic value generated by a sector over the years. This model is developed by combining financial reports, econometric and statistical methodologies, as per the TARI study shared with the ASSOCHAM.

Applying this model to the Indian tobacco sector the figure is Rs. 11,79,498 crore as the total cumulative intrinsic economic value generation by the sector. The study stated that Tobacco sector was chosen as the subject of the study because of its spread right from the farms to the local and the international markets. It cuts across a diverse set of constituents across its entire value chain ranging from farmers who are involved in its cultivation along with farm workers and labourers, the processing units, the transporters, trade channel, manufacturing units, brand owners as well as the exports operations given its lucrative exports status.

To calculate the economic value generated by the tobacco sector in India, the study used a two-step approach. First, the total annual value generated by the tobacco sector in 2016-17 was computed. This was then extended to estimating the total cumulative value generated by the sector, over the years, to assess the overall contribution of the sector.

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