The Tobacco Trap: EU’s Green Rules Threaten India’s Top Export

India’s tobacco export industry, a major contributor to the global tobacco market, now faces a significant challenge. Stringent European Union (EU) sustainability standards, set to take effect by 2030, threaten to disrupt the thriving export sector. Despite achieving remarkable growth—rising to become the world’s largest tobacco exporter in 2024—the industry may falter due to its inability to meet the evolving requirements. These regulations, focused on sustainability, transparency, and climate neutrality, pose serious risks to both the industry and the millions of Indian farmers whose livelihoods depend on tobacco cultivation.

EU Sustainability Standards: A Challenge for Indian Tobacco

The EU’s sustainability frameworks, including the European Green Deal, European Sustainability Reporting Standards (ESRS), and the Carbon Border Adjustment Mechanism (CBAM), require industries to align with carbon neutrality and climate action goals. Tobacco imports will be subject to stricter environmental, reporting, and governance requirements, with initial compliance phases starting in 2026 and full implementation by 2030. These standards demand major investments in technology, training, and infrastructure, areas where Indian tobacco farmers currently lag.

An estimated 50-60% of India’s farm exports, including tobacco, are expected to be impacted by these regulations. Without adequate preparation, Indian tobacco risks losing its competitive edge in European markets, potentially leading to a significant drop in exports.

Knowledge Gaps Among Farmers

One of the most pressing issues is the lack of awareness among Indian tobacco farmers. Many remain uninformed about the impending changes. Farmers in Andhra Pradesh, one of the key tobacco-growing regions, expressed concerns about the absence of training and information. A farmer from East Godavari district stated, “We are not aware of European norms or their implications. We rely on the Tobacco Board and the Central Tobacco Research Institute (CTRI) for guidance, but no such measures have been communicated to us.”

This knowledge gap underscores the urgent need for awareness campaigns, capacity-building programs, and the provision of resources to help farmers transition to sustainable practices.

The Tobacco Board’s Efforts

The Tobacco Board has initiated measures to promote sustainable tobacco cultivation, focusing on:

1. Reducing Pesticides and Fertilizers: Farmers are encouraged to adopt organic farming methods and use natural alternatives like green manure and lentil-based soil enrichment techniques.
2. Alternative Curing Methods: Experiments are underway to replace traditional wood-based curing with solar energy, LPG, and other sustainable options.
3. Soil Health Improvements: The Board promotes practices such as the Pachi Rota method, which enhances soil organic content and minimizes chemical dependency.
4. Pesticide Residue Testing: Collaboration with international laboratories ensures that tobacco meets global safety standards.

While these efforts are commendable, they remain insufficient to meet the comprehensive requirements of the EU sustainability frameworks.

Industry-Wide Collaboration

The public-private partnership model in Indian tobacco cultivation places significant responsibility on companies that purchase crops from farmers. According to CTRI Director Maganti Seshu Madhav, these companies are pivotal in implementing environmental, social, and governance (ESG) practices. Regular third-party audits are conducted to ensure compliance with established protocols throughout the crop cycle.

However, challenges persist. While some importing companies have begun demanding sustainable practices, the majority of Indian tobacco farmers are not yet equipped to meet these conditions. The Tobacco Board and companies must work collaboratively to provide farmers with the resources and training necessary to align with global standards.

Risks of Non-Compliance

Failing to meet EU sustainability standards could have far-reaching consequences:

1. Economic Impact: The livelihoods of millions of farmers and workers in the tobacco industry are at stake, particularly in states like Andhra Pradesh and Karnataka, which rely heavily on tobacco cultivation.
2. Health Concerns: An oversupply of tobacco in domestic markets could exacerbate tobacco-related health issues, countering public health initiatives.

To mitigate the impact of EU standards, the following steps are crucial:

1. Training and Awareness: Comprehensive campaigns should educate farmers about sustainability requirements and the benefits of adopting eco-friendly practices.
2. Financial Assistance: Access to credit and subsidies will enable farmers to invest in sustainable farming techniques and infrastructure.
3. Research and Development: Institutions like CTRI must lead efforts to develop innovative solutions, such as more efficient curing methods and high-yield organic tobacco varieties.

The EU’s stringent sustainability standards represent a significant challenge for India’s tobacco export industry. However, with proactive measures, collaboration, and government support, India can navigate these changes without jeopardizing its position as a global leader in tobacco exports. Striking a balance between environmental goals and economic stability is not just an opportunity but a necessity. Only then can India’s tobacco industry secure its future while contributing to a more sustainable global economy.