ITC says to keep cigarette factories shut over health warning rules

NEW DELHI (Reuters) - India's top cigarette maker ITC Ltd, part-owned by British American Tobacco, said it was not ready to print bigger health warnings on its packs as mandated by the government and will keep its factories shut until clarity emerges on the new rules.

ITC's comments highlight the latest tussle between India's $10 billion cigarette industry and the government after new rules kicked in on Friday mandating health warnings should cover 85 percent of a pack's surface, up from 20 percent now.

A parliamentary panel last year forced the government to delay the new rules, saying it was assessing how the industry would be impacted. But the health ministry later said the warnings must be adopted on April 1.

The panel of lawmakers last month called for reducing the size of warnings to 50 percent to protect the interests of the industry and tobacco farmers.

ITC said the health ministry's push to go ahead with its rule was "contrary to its earlier decision to await the (parliamentary) committee's findings".

"The industry was led to believe that the government would renotify new health warnings after considering the committee's recommendations," ITC said in its statement.

Health ministry officials could not be reached for a comment on Saturday. A senior official had told Reuters on Friday the government was committed to implementing new rules.

A leading industry body had said on Friday that cigarette makers, including ITC and its rival Godfrey Phillips India Ltd, which is a partner of U.S.-based Philip Morris International, suspended production as the new policy created confusion.

Smoking kills about 1 million people in India each year, BMJ Global Health estimates. The World Health Organization has called the debate on reducing the warnings size in India "worrisome".

(Reporting by Aditya Kalra; Editing by Rafael Nam and Louise Heavens)