Andhra Pradesh Chief Minister N. Chandrababu Naidu has welcomed the Union Government’s decision to reduce excise duty to zero on unbranded raw tobacco products. He called it a significant step that will benefit tobacco farmers and small traders in Andhra Pradesh. On February 4, 2026, Mr. Naidu said the decision followed a gazette notification issued by the Union Ministry of Finance. This notification clarified the excise duty on unprocessed tobacco (HS Code 2401). According to the notification, excise duty on unbranded, unpacked raw tobacco sold at retail is now zero. Mr. Naidu stated that the Andhra Pradesh government has formally supported this move. The Chief Minister explained the notification brings clarity, uniformity, and transparency to tobacco taxes. Previously, there was confusion distinguishing bulk unbranded tobacco from packaged retail products. This caused legal and operational issues hurting farmers and traders. Differing tax interpretations led to losses. Now, raw tobacco sold by farmers in bulk without branding or retail packaging will pay no excise duty starting February 1, 2026. But tobacco products packed in small retail packets or with company brand names will still have an 18% excise duty. Mr. Naidu said this policy will help the raw tobacco supply chain and protect government revenue from commercial branded sales. Clear rules are expected to reduce disputes during audits and billing and prevent misuse of tax benefits. The Chief Minister stressed the decision will ensure better prices for farmers, support small traders, and boost exports. Andhra Pradesh has urged the Union Government and the Central Board of Indirect Taxes and Customs (CBIC) to enforce the notification strictly and uniformly across India.