India's tobacco tax policy has historically lagged WHO FCTC norms. Critically examine the 2025–26 tobacco tax rejig as a public health intervention, highlighting its limitations.

Article 6 of the WHO FCTC, to which India has been a Party since 2004, requires tax policy that raises real tobacco prices faster than incomes [3]. With 28.6% of Indian adults using tobacco [4], the tax rejig effective 1 February 2026 is a genuine corrective — but an incomplete public health instrument.

The historical lag

• The GST Compensation Cess on tobacco went unrevised since July 2017; eight years of static rates let cigarettes grow more affordable as incomes rose — the inverse of Article 6 [3].
• Central excise under GST had shrunk to a token levy, disabling the Centre's most flexible health-pricing lever [1].

Merits as a health intervention

• The Central Excise (Amendment) Act, 2025 substitutes the Fourth Schedule of the Central Excise Act, 1944, restoring excise as the principal levy — a specific, revisable duty, the form WHO prefers [1].
• Rates are steep and differentiated: Rs 2,050–8,500 per 1,000 cigarette sticks by length [2]; chewing tobacco 25%→100% and smoking mixtures 60%→325% [1], narrowing cheap-substitute loopholes.
• The Health Security se National Security Cess on pan masala units reaches smokeless tobacco, the larger share of Indian consumption [4], with proceeds earmarked for health infrastructure.

Limitations

• It is a one-time correction: no statutory indexation to inflation or income growth, so affordability can drift again — precisely the failure Article 6 guidelines warn against [3].
• Bidis, the most-consumed smoked product among the poor, remain taxed far more lightly than cigarettes, blunting equity gains.
• A wider price wedge invites illicit trade; India has not acceded to the Protocol to Eliminate Illicit Trade in Tobacco Products [5], leaving track-and-trace safeguards thin.
• Framing revenue around compensation-replacement and security risks subordinating the health objective; earmarking without audited health outlays reduces accountability.

The rejig ends prolonged policy drift and rebuilds a credible fiscal lever. Its health dividend now depends on making increases automatic and annual, rationalising bidi taxation, joining the illicit-trade Protocol, and routing proceeds into cessation services — converting a one-off price shock into a rules-based regime consistent with SDG 3.a.