April 18, 2024
India Cigars And Cigarillos

Cigar and Cigarillos Market in India: An Emerging Segment

The tobacco industry in India has traditionally revolved around cigarettes and other smoking products. However, in recent years, there has been a gradual rise in the popularity and consumption of cigars and cigarillos in the country. These premium tobacco products are no longer a niche and are finding more takers in the urban Indian markets.

History and Types of Cigars and Cigarillos

Cigars have a long history worldwide and originate from Central and South American countries. The traditional hand-rolled cigars are made entirely from aged tobacco leaves. However, there are also machine-made cigars available in the market. Cigarillos are smaller versions of cigars that are generally machine-made.

Based on size and filling, some common types of cigars found in India include:

– Large cigars (6 inches or longer)

– Medium cigars (4-6 inches)

– Small cigars/cigarillos (less than 4 inches long)

– Premium hand-rolled cigars

– Machine-made cigars and cigarillos

– Flavored cigars with infusions of fruit, coffee or other flavors

Premium Imported Brands Leading the Market

The India Cigars And Cigarillos is dominated by imported super-premium international brands like Arturo Fuente, Davidoff, Macanudo, Romeo y Julieta, etc. These brands appeal to status-conscious urban consumers looking for unique smoking experiences. Local production is limited with brands like Montecristo and Partagas also gaining traction in metro cities.

E-commerce Boosts Access and Discovery

The growing popularity of e-commerce in India has substantially boosted the accessibility and discovery of imported cigars online. Leading e-tailers offer a wide assortment of international cigar brands at competitive prices with fast delivery. This has expanded the reach of premium cigars beyond the traditional brick-and-mortar outlets located in large cities. Review websites and smoking clubs have also introduced novices to new brands.

Opportunities in Tourism and Duty-Free Retailing

Duty-free shops located at major Indian airports sell a range of international cigars, helping tourists satisfy their smoking needs. There is scope to cash in on the rising numbers of leisure and business travelers. Recent government policies have also facilitated the growth of tourism in the country. Premium cigars and cigar lounges can be promoted as a luxury attraction for affluent foreign visitors. This presents opportunities for brick-and-mortar retailers at destination airports as well as in major tourist cities.

Changing Consumer Preferences

Young urban professionals now constitute a significant chunk of cigar consumers in India. They are more affluent, well-travelled, and prefer unique experiences over the regular smoking routines. Flavored cigars are gaining popularity due to their versatility. Hand-rolled premium varieties are also experiencing increased interest from enthusiast smokers looking to collect and savor special cigars. The growing cigar culture is also supported by aficionado societies, cigar lounges and festivals in large cities.

Regulatory Challenges

While the Indian cigar market presents impressive prospects for growth, there are regulatory hurdles that may hinder its full potential. Cigars fall under the legal category of ‘other tobacco products’ and attract hefty national taxes of over 70%. This makes popular imported brands quite expensive. Additionally, advertising and promotion of cigars are prohibited as per the Cigarettes and Other Tobacco Products Act (COTPA). The regulations are targeted more towards cigarettes rather than premium cigars. A relaxation in taxes and sensible regulations can fuel further market expansion.

With growing exposure to international lifestyles, India’s high-net-worth individuals are showing increasing enthusiasm for cigars as a leisure activity. Imports and domestic sales are rising annually even as cigarettes sales are moderating. Multinational tobacco companies are also evaluating opportunities in the premium segment. Overall, the Indian cigar market is projected to grow at over 8-10% each year driven by e-commerce, tourism, and evolving tastes of urban consumers. With supportive regulations and competitive tax structures, it holds immense untapped potential to emerge as a significant cigar consumption market in South Asia.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it