On August 12, 2026, the Central Arecanut and Cocoa Marketing and Processing Cooperative (Campco) Ltd said Karnataka's notification banning 'gutkha' and 'paan masala' should not cause unintended consequences for arecanut growers or the legitimate arecanut trade. The statement came after the Commissioner of the Department of Food Safety and Drugs Administration, Karnataka Government, issued a press statement on Wednesday.
Notification and enforcement scope
The Department issued a notification dated August 10, prohibiting the sale and distribution of products containing tobacco and nicotine in Karnataka in the interest of public health. The notification will remain in force throughout the State for one year from its date of issuance, according to the Department.
SR Satishchandra, Campco President, said arecanut is an important plantation crop and a major source of livelihood for a large number of farmers in Karnataka and other parts of the country. He asserted that enforcement should focus on prohibited products:
Campco respects the government's public-health objective and the action being taken against tobacco and nicotine-containing products. However, there must be a clear distinction between arecanut as an agricultural commodity and products containing tobacco and nicotine. The enforcement of the notification should remain focused on the prohibited products and should not result in unintended consequences for arecanut growers or the legitimate arecanut trade.
Satishchandra added that arecanut growers should not bear the consequences arising from the use or misuse of their agricultural produce in tobacco- or nicotine-containing products.
Arecanut's dominance in Karnataka
Citing a recent answer in the Lok Sabha, Satishchandra said Karnataka accounted for 71.56 per cent of the country's total arecanut area and 75.47 per cent of the country's total arecanut production from 2021-22 to 2025-26 (second advance estimates).
The economic significance is also visible in Goods and Services Tax (GST) collections. In a recent reply in the Lok Sabha, the Union Finance Ministry provided details of GST collection from the sale of arecanut and arecanut-based products among the States. Karnataka's figures are:
| Fiscal year | GST collection (₹ crore) |
|---|---|
| 2021-22 | 172.62 |
| 2022-23 | 266.82 |
| 2023-24 | 326.57 |
| 2024-25 | 313.16 |
| 2025-26 | 379.34 |
| Q1 2026-27 | 90.02 |
Karnataka recorded the highest State-wise GST collection from the sale of arecanut and arecanut-based products among the States, Satishchandra said. These figures underline the substantial economic significance of arecanut and arecanut-based trade in Karnataka and reinforce the need to ensure that enforcement measures directed against tobacco and nicotine-containing products do not adversely affect the legitimate arecanut trade or the livelihood of arecanut growers.
Growers seek clear guidelines
Mahesh Puchhappady, President of the All-India Arecanut Growers' Association, told businessline that the government should not view prohibited products containing nicotine and tobacco in the same way as the traditionally grown and commercially important arecanut crop. Arecanut growers should not be put into difficulties in the name of action against prohibited products. He added that the government should come out with clear guidelines in this regard.
Implications for the arecanut trade
Satishchandra urged the State government to protect the interests of farmers engaged in the cultivation and legitimate marketing of arecanut while implementing public-health measures. The government and enforcement authorities should ensure that the implementation of the prohibition is confined to products covered by the notification and does not result in any indirect restriction on arecanut as an agricultural commodity or its legitimate cultivation, procurement, processing and trade, he said.
For commodity traders and procurement teams, the key takeaway is the distinction between raw arecanut and tobacco- or nicotine-containing finished products. The August 10 notification targets the latter, and Campco and grower associations are seeking administrative clarity to keep the agricultural commodity's supply chain — from cultivation to processing — running without regulatory friction.
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