Following the reported decision of the Cabinet, in a constructive spirit and to avoid any ongoing controversy, ITC has decided to voluntarily withdraw from all sponsorships of sporting activities irrespective of the legal position on the subject.

Although ITC has long-term arrangements in respect of sponsorships of various sports, it has already initiated action to exit from such arrangements and hopes to complete the same latest by 1st April 2001. ITC also proposes to progressively scale down its cigarette advertising.

ITC believes that this action on its part will create the right climate for a constructive dialogue that will help develop appropriate content, rules and regulations to make the intended legislation equitable and implementable.

Equally, ITC hopes that the proposed legislation will not, in any way, place the Indian cigarette industry at a disadvantage in relation to its international counterparts who currently enjoy free access to communicate on television channels uplinked from outside India and seen in India by a very wide cross-section of the population. For instance, Marlboro's sponsorship of the Formula 1 car racing on uplinked television channels is reputed to enjoy the maximum viewership among the younger sections of the Indian population. In order to ensure a level playing field, the proposed legislation will have to address the issue of international cigarette companies currently being able to advertise their brands in foreign magazines which are widely sold in India. This aspect assumes even more importance in the context of the growing menace of contraband cigarettes.

Cigarettes, though constituting only 16% of the tobacco consumption in the country, contribute over 90% of Government revenues from tobacco. Cigarettes, together with cigarette tobaccos, also account for almost 100% of the foreign exchange earnings from the tobacco sector. It will not be in the interest of the Exchequer and the consumers if unworkable restrictions on smoking in public places compel downgrading of tobacco consumption from high excise duty paying cigarettes to other forms like chewing tobacco, out of fear of harassment by the enforcing agencies.

ITC will continue to dialogue with the Government to support the creation of a meaningful and practical regulatory framework which can balance the interests of the tobacco farmers, the consumers, the Exchequer, the Indian economy and societal health concerns.