The cigar and cigarillos industry in India has seen steady growth over the past few decades. Cigars and cigarillos have gained increased popularity among urban populations and young professionals in metropolitan cities. While cigarettes dominate the tobacco market, cigars and cigarillos present an expanding segment offering options for seasoned and aspiring connoisseurs alike.
Production and Manufacturing
Cigar and cigarillos production in India is a largely unorganized sector dominated by small family businesses. Some of the major cigar production clusters are located in Kerala, Goa, Bengal, and parts of North East India. These regions have favorable climatic conditions and a traditionally tobacco-growing agricultural base to support cigar manufacturing. Over the years, large domestic and multinational companies have also entered cigarillo manufacturing in India.
Leading domestic cigarillo brands produced in India include Charms, Esse, and Eight. Machine-made cigarillos dominate local production as they offer higher volumes at lower costs compared to hand-rolled cigars. Popular imported cigar brands produced through local manufacturing partnerships include Partagas, Monte Cristo, Romeo y Julieta, and Cohiba. The production process involves sourcing prime tobacco leaves from designated farms, fermenting, blending, and rolling/packaging into finished cigars. Strict quality controls are maintained to deliver consistent flavors and burn characteristics.
Popular Brands
When it comes to premium hand-rolled cigars, Cuba dominates the market globally as well as in India. Some of the most renowned Cuban cigar brands enjoyed by Indian connoisseurs include Cohiba, Montecristo, Partagas, Romeo y Julieta, Hoyo de Monterrey and more. These cigars are imported through authorized distribution channels.
Domestically produced machine-made cigarillos seeking to appeal to the mass market come from leading Indian companies like Charms and Esse. Charms, in particular, has developed a strong portfolio with a variety of flavor offerings at affordable price points.
International cigarillo and little cigar brands from the US and Southeast Asia are also gaining popularity. Swisher Sweets, Garcia y Vega, and Drew Estate’s Acid brand have cultivated a loyal following through effective brand-building and marketing activities.
Sales Trends
Over the last decade, the per capita consumption of India Cigars And Cigarillos among adult populations has steadily increased. Market insights point to high sales growth concentrated in India’s top metro areas with populations exposed to global trends and lifestyles. Cigars are increasingly perceived as a social accessory and way to relax. Their sales are quite resilient to price fluctuations compared to cigarettes.
Retail sales of premium cigars are dominated by high-end lounges, walk-in humidor setups, and dedicated cigar stores. Leading retail formats include humidor stores established by global giants like Davidoff and Arturo Fuente. Online sales on portals specializing in cigars, wines, and luxury items are also rising rapidly. Cigarillos, on the other hand, are widely available across all modern retail channels including convenience stores, gas stations, and restaurants.
Government Regulations and Taxes
The Union Government regulates the production and sale of cigars, cigarillos, and other tobacco products in India through the Cigarettes and Other Tobacco Products Act (COTPA). This governing law mandates compliance, permits, labeling requirements, advertising restrictions, minimum age of purchase limits etc. Import duties and taxes make imported premium cigars less affordable, benefiting locally manufactured brands.
State governments further impose VAT and other local taxes that significantly increase the final retail price of tobacco goods. Steep tax increases over the years have dented cigarette consumption. However, higher taxes have seemingly had limited impact on the premium cigar segment so far due to inelastic demand from aficionados willing to pay for quality hand-rolled cigars. Cigarillo sales also seem resilient, likely due to their mass-market appeal and affordability.
Fueled by changing consumption patterns among urban populations, India’s cigar and cigarillo industry has carved a notable niche within the country’s overall tobacco market. While it caters majorly to the high-income demographic currently, segments like cigarillos are expanding the customer base. Production is expected to consolidate under large players with rising popularity. However, artisanal hand-rolled cigars will likely retain their exclusive status appealing to connoisseurship. With responsible consumption promoted among legal-aged audiences, the cigar segment holds promise for further healthy growth in the Indian market.
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1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it