Desperation On The Streets: Small Retailers Plead For Relief From Crippling Tax Increases On Daily-Use Goods

Fearing the loss of their already meagre incomes, FRAI members protested outside the Finance Ministry, warning that steep tax hike will crush demand and devastate their families

Thousands of small retailers, hawkers and pavement sellers from across Delhi poured on the streets today in fear and anguish, protesting the sharp increase in taxes on legal tobacco products. With no alternative source of income to fall back on, retailers said the sudden price shock threatens the survival of their small businesses and the well-being of their families. They held demonstrations across the capital and sat in dharna outside the Ministry of Finance, pleading for an immediate rollback of the excessive tax hikes and a re-notification of sensible tax rates rooted in Indian reality that can protect demand and save livelihood.

The protest was led by the Federation of Retailers Association of India (FRAI), which represents nearly 80 lakh micro, small and medium retailers nationwide with a membership of 54 Retail Associations from Northern, Southern, Eastern and Western parts of the country.

As per a recent Ministry of Finance notification of the Chewing Tobacco, Jarda Scented Tobacco and Gutkha Packing Machines (Capacity Determination and Collection of Duty) Rules, 2026 that has imposed an excise duty of ₹2,050-8,500 per 1,000 sticks, depending on cigarette length, effective 1 February. Retailers have voiced deep anguish to the notified excise duty hikes following the withdrawal of the compensation cess, warning that sudden price increases will render legal products unaffordable for consumers, kill demand and push small sellers already struggling to survive towards the brink of collapse.

Speaking at the event, Vinay Kumar, Secretary, Federation of Retailers Association of India (FRAI), said, “Today we have come out because our lives are in danger. Sudden and big tax increases will make daily goods too costly for poor people and break the small shops that feed our families. We earn very little already. If these prices go up, customers will not be able to afford these products. We will lose customers, lose income and our children will go hungry. Illegal sellers will grow, but honest hard-working people like us will be finished.”

“We are folding our hands and asking the government to stop and think again. Please roll-back these tax rates. Come closer and take a look at the lives of small pavement earners. We want to work honestly and survive. Taxes should not take away our bread and dignity”, added Vinay Kumar.

FRAI representatives and members feel that steep tax hikes in items of regular consumption disproportionately affect informal retailers who operate on thin margins and depend on high daily volumes. They have warned that rising prices are already driving customers away from neighbourhood shops and pushing demand towards illicit and unregulated products. They have also stressed that affordability of legal products is critical to keeping small retailers compliant and sustaining India’s grassroots retail economy.

FRAI clarified that while retailers are not opposed to taxation or public health objectives, they are seeking a calibrated, sensible taxation policy rooted in Indian reality, that avoids sudden price shocks and protects millions of self-employed sellers.

The association urged policymakers to engage with retailer representatives and consider the downstream economic and social impact of abrupt tax increases on informal retail and daily earners.