Stocks companies snuff fell sharply on Tuesday after the government said today that it has accepted the recommendations of an expert panel has proposed banning the sale of cigarettes.

The panel also suggested raising the minimum for those who can buy the products of snuff and has proposed a large fine for violation of the provisions of cigarettes and other products of snuff Act, 2003 age.

Health Minister JP Nadda said in a written reply to the Rajya Sabha "the Ministry has accepted the recommendations and a draft note for the Cabinet has been circulated for consultation."

The recommendations will now be submitted to the Cabinet and require a nod Parliament before application.

Nearly 70 percent of all sales are of cigarettes - many can not afford to buy a pack of 10 cigarettes by an average of 190 rupees

Analysts say sales are going to take a hit of 10 to 20 percent if these proposals become law. The cigarette industry contributes Rs 25,000 cr tax revenues, but expect health problems to override the loss of that.

Indians smoked more than 100 billion cigarettes in 2012, according to Euromonitor International.

All tobacco companies negotiate with deep cuts after the news. ITC, the largest cigarette manufacturer in India, fell nearly 7 percent to a low of Rs 348.65 days. ITC is also the most influential in the blue chip index Nifty action, so that the selloff led to further losses in the broader markets.

Godfrey Phillips, which produces red and white cigarette brand, plummeted to 11.5 percent to an intraday low of Rs 2880. Among other actions, Gold Snuff negotiated a 9 percent lower, while shares VST Industries fell 2 percent.