Shares of cigarette manufacturers rallied on Wednesday afternoon after the cabinet approved a ban of e-cigarettes, prohibiting its manufacture and sale in India. Godfrey Phillips shares closed 5.5% higher at Rs 1,023.30 on BSE, while the VST Industries shares ended the session 3.4% higher at Rs 3,622. FMCG major ITC shares also rebounded following the move, closing 1.03% higher at Rs 239.60. “The decision was made keeping in mind the impact that e-cigarettes have on the youth of today,” Finance Minister Nirmala Sitharaman told reporters in New Delhi.
Unlike traditional cigarettes, e-cigarettes do not burn, but heat up a liquid. These also come in various flavours including such as bubble gum, chocolate etc. These typically contain nicotine, and turn into vapour when inhaled. The government’s decision comes a day after New York became the second US state to ban flavoured e-cigarettes following a string of vaping-linked deaths.
Health Minister Harsh Vardhan said in a tweet that possession of e-cigarettes or similar devices will be punishable by up to six months in prison, a fine of Rs 50,000 ($700) or both. In her address, FM Nirmala Sitharaman said that e-cigarettes were promoted as a way to get people out of their smoking habits but reports have shown that many are becoming addicted to them. Notably, more than 900,000 people die each year in India due to tobacco-related illnesses. India has 106 million adult smokers, second only to China in the world, according to a Reuters report.
Meanwhile, the Sensex rose closed 83 points higher at 36,564 while the Nifty closed above the 10,8000-mark led by gains in energy, metal and power stocks as global crude oil prices eased and rupee recovered against the dollar.
Tata Steel, Vedanta, SBI, Tech Mahindra, Bajaj Finance, Asian Paints, M&M, NTPC and PowerGrid were among the biggest gainers jumping up to 3.5 per cent. The domestic currency rupee appreciated 52 paise (intra-day) to 71.26 against US dollar.