ITC to resume cigarette production amid health warning row | Reuters

NEW DELHI India's biggest cigarette maker ITC Ltd will soon resume production at its factories, the company said in a statement, two weeks after it decided to shutter its plants over the government's stringent new packaging rules.

India from April 1 ordered 85 percent of a cigarette pack's surface to be covered in health warnings, up from 20 percent, but cigarette firms halted production saying the policy was not clear.

India's $11 billion tobacco industry is up in arms against the new rules and has taken New Delhi to court. Industry estimates show the production halt has already cost $850 million and risks the livelihood of millions of farmers.

In a statement to the Indian stock exchange late on Friday, ITC, which is part-owned by British American Tobacco, said it will resume manufacturing of cigarettes "consequent upon a high court order passed in favour of the company".

It did not give any details of the court decision. It was not immediately clear whether the company will print bigger health warnings on its packs or not. On Saturday, repeated calls to an ITC spokesman went unanswered. Industry lobby the Tobacco Institute of India declined to comment.

ITC said earlier this month it was not ready to print bigger, "excessive" health warnings. It also said the government was implementing new rules despite a parliamentary panel report that called for reducing the size of warnings. But the panel's report is not binding on the government, and health ministry officials have maintained that manufacturers must comply with the new rules.

Smoking kills more than 1 million people a year in India, according to BMJ Global Health. The World Health Organization says tobacco-related diseases cost the country $16 billion annually.

(Reporting by Aditya Kalra; Editing by Douglas Busvine and Michael Perry)

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Updated Date: Apr 16, 2016 11:30:12 IST

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