The Indian government is contemplating a strategy to maintain the current tax burden on tobacco products, including cigarettes and gutka, in a move that could significantly impact ITC Limited , one of India's leading cigarette manufacturers.

Potential Tax Structure Change

According to recent reports, the government is exploring the implementation of the National Calamity Contingent Duty (NCCD) as a replacement for the existing compensation cess on tobacco products. This shift in tax structure aims to keep the overall tax levels steady, despite the proposed abolition of the compensation cess.

Implications for Tobacco Industry

The potential move suggests that while the tax mechanism may change, the effective tax rate on tobacco products is likely to remain unchanged. This approach indicates the government's intent to balance revenue generation with its health policy objectives.

Impact on ITC

For ITC, a major player in the Indian tobacco industry, this development could have significant implications:

Pricing Stability

If implemented, this measure could help maintain price stability for ITC's tobacco products, as the overall tax burden would remain consistent.

Business Predictability

A steady tax environment could provide ITC with a more predictable business landscape, potentially aiding in long-term planning and strategy formulation.

Market Dynamics

The consistent tax levels might help in maintaining the current market dynamics, possibly preventing any major shifts in consumption patterns due to price fluctuations.

While the government's consideration is still in the preliminary stages, it represents a crucial development for the tobacco industry in India. Stakeholders, including ITC, will likely be closely monitoring these potential changes in the tax structure and their implications on the sector's future landscape.

ITC Ltd. has received regulatory approval for its strategic acquisition in the paper sector. The Competition Commission of India (CCI) has approved the company's proposed acquisition of the pulp and paper business of Aditya Birla Real Estate Ltd. (ABREL) for Rs 3,498.00 crore.

Regulatory Approval Received

In a regulatory filing dated December 17, 2025, ITC announced that the CCI has granted approval for the acquisition through a letter dated December 16, 2025. The approval covers the acquisition of Century Pulp and Paper (CPP) as a going concern on a slump sale basis.

About Century Pulp and Paper

Century Pulp and Paper represents a significant addition to ITC's paper portfolio. The company details include:

Strategic Business Impact

The acquisition aligns with ITC's expansion strategy in the paperboards and packaging segment. The company's paperboards and packaging division has demonstrated strong performance, generating a free cash flow of Rs 4,000.00 crore during FY20-24.

Transaction Timeline

The deal progression shows systematic regulatory compliance. ABREL's board had approved the business transfer agreement in March 2025 for the divestment. Both companies had earlier expressed confidence that the transaction would not raise competition concerns due to the highly competitive nature of the paper industry.

Market Implications

For ITC, this acquisition strengthens its position in the pulp and paper sector, complementing its existing paperboards and packaging operations. For ABREL, the divestment represents a value-unlocking exercise, allowing focus on core real estate business activities.

With CCI approval now secured, ITC can proceed with completing this strategic acquisition that enhances its manufacturing capacity and market presence in the paper industry.