Shares of cigarette makers surged today after the Union Cabinet cleared banning of e-cigarettes. While ITC share price rose up to 2.17% to Rs 242.30, Godfrey Phillips India Ltd soared 9% Rs 1023.3 on BSE. Shares of other cigarette makers such as VST Industries Ltd and Golden Tobacco Ltd climbed 3.45% and 4.69% respectively.
The Modi government announced a ban on production, manufacturing, import, export, sale or even distribution and advertisement of e-cigarettes in India today , a move that could affect several e-cigarette companies operating in India.
"The decision was taken in light of the impact e-cigarettes are having on youth," said Finance Minister Nirmala Sitharaman. She said data derived from several US-based organisations suggested around 77 per cent growth had been seen among school students in terms of the e-cigarettes usage.
"Even the middle school students have become victims of the e-cigarettes," said the minister, adding that there are over 3 million regular users of e-cigarettes in the US. She added that between 2011 and 2015, there has been over 900 per cent growth in the use of e-cigarettes in the US.