In India, few products straddle the line between cultural heritage and health hazard as tightly as paan masala. This seemingly innocuous mouth freshener, made from areca nuts, catechu, lime, cardamom, and other aromatic spices, is a mainstay in millions of households. But beneath its colorful packaging lies a complex story of economic significance, global reach, health risks, and ethical dilemmas.
Paan masala, a modern adaptation of the traditional betel quid, has become a ubiquitous product in India. Unlike its predecessor, which relied on fresh betel leaves, paan masala offers the convenience of pre-packaged, ready-to-use blends. The diversity in flavors and formulations has turned it into a cultural touchstone, catering to tastes as varied as India’s regional cuisines.
Yet, its appeal isn’t confined to the borders of India. Countries with significant Indian diaspora, such as the UAE, UK, USA, Canada, and Australia, have also embraced it. Its reputation as a flavorful, often nostalgic product drives its demand in global markets. However, its classification as a “sin good” has made it subject to stringent regulations and health concerns, both domestically and internationally.
How is Paan Masala the economic backbone of India
The paan masala industry is a vital contributor to India’s economy. Valued at billions, it supports a sprawling supply chain that includes farmers, manufacturers, and retailers. By 2032, experts project its market size will reach ₹62,067.7 crores, with steady annual growth driven by product innovation and expanding consumer bases.
Government involvement in this sector is substantial, primarily through taxation. Paan masala products are taxed at a high GST rate of 28%, with additional cess for tobacco-containing variants often exceeding 200%. The excise duties alone contribute significantly to state and national revenues. For instance, sin goods, including paan masala, accounted for over ₹50,000 crores in tax revenues in 2022. While these taxes aim to deter consumption, they also ensure the government maintains a vested interest in the industry’s profitability.
In India, tobacco products, along with other sin goods like aerated drinks and paan masala, fall under the highest GST tax bracket. Tobacco products are taxed at 28%, while raw tobacco leaves incur a lower rate of 5%. Additionally, these goods attract a cess under the GST framework, which is used to compensate states for revenue losses post-GST implementation.
The cess rates vary depending on the type of product. Unbranded raw tobacco is subject to a 65% cess, whereas scented zarda faces a higher rate of 160%. Paan masala containing gutkha is among the most heavily taxed items, attracting a cess of 204%. For cigarettes, the structure is a combination of 5% GST and an additional cess of up to ₹4,170 per 1,000 sticks.
A unique component of this taxation regime is the National Calamity Contingency Duty (NCCD). Revenue collected through this duty supports the National Calamity Contingency Fund (NCCF), a corpus established to assist states in disaster relief efforts. NCCD applies to various items, including cigarettes, paan masala, beedis, and even some non-tobacco goods like cellular phones. With a core corpus of ₹500 crores, the NCCF reflects a broader policy framework where sin goods contribute to both public health mitigation and emergency funding.
Who consumes Paan Masala?
Consumption patterns reveal that paan masala transcends socio-economic boundaries, though certain demographics dominate its user base. Around 70% of consumers are men aged 18–45, with an increasing trend among women and teenagers due to aggressive marketing. Regionally, Uttar Pradesh emerges as the largest consumer, reflecting its deep cultural ties to paan-related products. Other states like Bihar, Maharashtra, Madhya Pradesh, and Delhi follow closely, with rural and urban consumption often shaped by local traditions and lifestyles.
Interestingly, while paan masala is a quintessential Indian product, its global footprint continues to grow. Markets in the Middle East, North America, and Southeast Asia sustain steady demand, bolstered by expatriate communities and clever marketing strategies that position it as a sophisticated alternative to traditional betel quid.
The hidden costs: Health and ethics
While its economic contributions are significant, the health implications of paan masala consumption are severe. Areca nut, its primary ingredient, is classified as a Group 1 carcinogen by the International Agency for Research on Cancer (IARC). Chronic use has been directly linked to oral cancers, dental decay, and systemic health issues.
India bears the grim title of having half of the world’s oral cancer cases, many attributed to products like paan masala. Studies suggest regular users have a three to five times higher risk of developing oral cancer. Furthermore, the addiction potential, especially in tobacco-based variants, creates a cyclical dependency among consumers, exacerbating health crises.
Are there any regulation and advertising policies in place
India’s regulatory landscape for paan masala is fraught with complexities. On the one hand, government agencies like the Food Safety and Standards Authority of India (FSSAI) enforce strict safety and advertising regulations. On the other, the industry’s lobbying power and economic contributions often create enforcement gaps.
Advertising laws prohibit direct promotion of tobacco-containing products. In response, manufacturers employ surrogate advertising to maintain brand recall. For instance, brands like Pan Bahar advertise cardamom or “flavor enhancers” to skirt legal restrictions, while subtly associating these campaigns with their paan masala products.
The involvement of Bollywood celebrities in these campaigns has sparked significant controversy. Stars like Shah Rukh Khan and Akshay Kumar have faced public backlash for endorsing paan masala brands, with Kumar even issuing an apology after promoting a product linked to serious health risks. These endorsements highlight ethical dilemmas in celebrity marketing, where commercial gains often overshadow public health concerns.
The paan masala industry is no stranger to controversy. From health-related lawsuits to allegations of bribery and regulatory evasion, its reputation has been repeatedly tarnished. In 2019, a high-profile case in Maharashtra uncovered widespread bribery among health officials and paan masala manufacturers, leading to arrests and increased scrutiny.
Additionally, tax evasion is a recurring issue. Some manufacturers underreport sales to minimize excise duties, depriving the government of potential revenues. Meanwhile, the misuse of surrogate advertising has drawn criticism for undermining the spirit of India’s tobacco control laws.
Recent developments in the industry
Recent years have seen notable shifts in the industry. For instance, Rajasthan imposed a 15% increase in excise duties on paan masala in 2023, reflecting a growing trend of state-level initiatives to curb its consumption. Simultaneously, public health campaigns by NGOs like the Cancer Patients Aid Association (CPAA) have intensified, calling for stricter regulations and consumer awareness.
Another significant development is the shift in advertising strategies. Following widespread criticism, several brands have reduced celebrity endorsements, pivoting instead to influencer-driven campaigns on digital platforms.
What we think about the issue
The paan masala industry stands at a pivotal moment. On one side, it remains a culturally entrenched product that drives economic growth and global expansion. On the other, it faces mounting pressure from health advocates, regulatory bodies, and shifting consumer perceptions.
Moving forward, the industry must embrace greater transparency, ethical marketing, and safer product formulations. Governments, too, have a role to play—not only in enforcing regulations but also in investing the revenues from sin goods taxes into public health initiatives.
Ultimately, the future of paan masala hinges on striking a delicate balance. Can it evolve into a responsible industry without losing its cultural essence? Or will it succumb to its darker associations with health risks and ethical controversies? The answers lie in the collective efforts of stakeholders to reconcile tradition with modern accountability.
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