Tobacco was introduced into India by Portuguese traders during AD 1600. Its use and production proliferated to such a great extent that today India is the second largest producer of the tobacco in the world. Soon after its introduction, it became a valuable commodity of barter trade in India. Trade expanded and tobacco spread rapidly along the Portuguese trade routes in the East, via Africa to India, Malaysia, Japan and China. During this period, the habit of smoking spread across several South Asian countries.

Initially, the British traders imported American tobacco into India to finance the purchase of Indian commodities. When the American colonies declared independence in 1776, the British East India Company began growing tobacco in India as a cash crop. The British East India Company and its successor, the British Raj, used tobacco as an important cash crop, both for domestic consumption and foreign trade.