Exchange Control (Tobacco Finance) (Amendment) Order, 2026 (No. 2)

The Exchange Control (Tobacco Finance) Order, 2004 gets the same treatment as the cotton order gazetted alongside it. Tobacco buyers may access both offshore and onshore funds to purchase tobacco, and the order declares that they may use their own savings of any kind, or borrow or raise funds locally, to finance the production and buyback of green leaf tobacco.

The change with the clearest financial effect is on surrender. A tobacco buyer who accesses funding for tobacco purchases is deemed an exporter, and the foreign currency surrender requirement advised by the Reserve Bank from time to time applies to the net rather than the gross export proceeds realised from selling exported tobacco. Surrendering on net proceeds is a materially smaller obligation than surrendering on gross.

"Contract tobacco" is simplified to mean tobacco whose production has been financed by a contractor, and the definitions of "interbank market" and "Memorandum of Deposit Scheme" fall away. Where a contractor has financed an A1 or A2 grower, the amount advanced may be set off against the price of the tobacco the grower sells to that contractor.

The heading and wording of section 7 are cleaned up to remove the assumption that financing comes from offshore, and two subsections of section 5 are repealed. The order does not state a commencement date beyond its gazetting on 6 February 2026.