Background of the study

                           The history of global tobacco trade is integrally linked with the history of India. It was to discover a sea route to this fabled land, reputed for its spices, silk and gems, that Christopher

Columbus set sail in 1492. His wayward journey took him instead to America. This .discovery. of the .New World. was accompanied by the discovery of tobacco by Portuguese sailors. This plant, treasured by the American .Indians. for its presumed medicinal and obvious stimulant properties, was eagerly embraced by the Portuguese who then moved it to the .Old World. of Europe. Even though their quest for easy access to Indian spices was delayed by some years, the Europeans did not fail to recognize the commercial value of this new botanical acquisition. When the Portuguese eventually did land on India’s shores, they brought in tobacco. They introduced it initially in the royal courts where it soon found favour. It became a valuable commodity of barter trade, being used by the Portuguese for purchasing Indian textiles. The taste for tobacco, first acquired by the Indian royals, soon spread to the commoners and, in the seventeenth century, tobacco began to take firm roots in India. Thus, tobacco travelled to  the .real. Indians from their curiously named American cousins, through the medium of European mariners and merchants who sailed the seas and spanned the continents in search of new markets and colonies. It was with the establishment of British colonial rule, however, that the commercial dimensions of India.s tobacco production and consumption grew to be greatly magnified. Initially, the British traders imported American tobacco into India to finance the purchase of Indian commodities. When the American colonies declared independence in 1776, the British East India Company began growing tobacco in India as a cash crop. Attempts were made, under the colonial rule, both to increase the land under tobacco cultivation and to enhance the quality of the leaves produced. The British East India Company and its successor, the British Raj, used tobacco as an important cash crop, both for domestic consumption and foreign trade. The manufacturing industry was, however, not established till much later, as the British believed in exporting the leaf to Britain and re-importing cigarettes to India, with considerable value addition in the process. As domestic consumption of cigarettes rose, the Imperial Tobacco Company commenced production within India, retaining control and repatriating the profits. In the late nineteenth century, the beedi industry began to grow in India. The oldest beedi manufacturing firm was established around 1887 and by 1930 the beedi industry had spread across the country. The price differential from cigarettes favoured the use of beedis by the working classes and this domestic product soon supplanted cigarettes as the major form of tobacco consumption.