India’s steadfastness in maintaining its ban on e-cigarettes, including heat-not-burn tobacco products, has reportedly dealt a significant blow to Philip Morris International’s (NYSE:PM) expansion plans after years of lobbying efforts.
Philip Morris aimed to launch its heated tobacco device, IQOS, in the Indian market. From 2021 to 2025, the tobacco giant engaged with senior Indian officials and a parliamentary panel, promoting the scientific rationale for products like IQOS and seeking an exemption from the ban, according to a Reuters report.
The company’s executives also held discussions with several state government officials at Davos in January, exploring the potential for long-term value creation in the tobacco sector with products like IQOS.
Despite being the seventh-largest cigarette market in the world, India has upheld its 2019 ban on e-cigarettes.
Philip Morris CEO Jacek Olczak told the publication that it is "illogical" that smoking alternatives like heated tobacco and vaping face market resistance while conventional cigarettes are readily sold.
Philip Morris and the Union Health Ministry in India did not immediately respond to Benzinga‘s requests for comment.
Smoke-Free Products Powers Expansion
This development comes at a time when Philip Morris has been witnessing strong momentum in smoke-free products. IQOS, Philip Morris' top smoking alternative since 2014, now has over 35 million users worldwide. During the fourth-quarter earnings call, Olczak said that the company’s smoke-free products now account for over half of its sales from 27 markets, including South Korea, Poland, Italy, Romania, and the U.S.
India falls within the company’s SSEA, CIS & MEA (South & Southeast Asia, Commonwealth of Independent States & Middle East & Africa) segment, which made up roughly 30 % of the company's total revenue in fiscal 2025. Philip Morris' cigarette and HTU (Heated Tobacco Units) shipment volume for fiscal 2025 rose 1.7% to 379.6 billion units, largely fueled by a 39.2% increase in India.
Analyst Andrei Andon-Ionita from Jefferies told Reuters that launching IQOS in India could have offered Philip Morris a significant market share and a fresh growth avenue as other key markets reach maturity.
Price Action: Over the past year, Philip Morris stock climbed 23.46%, as per data from Benzinga Pro.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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