India's ITC says to resume cigarette production amid health warning row

NEW DELHI (Reuters) - India's biggest cigarette maker ITC Ltd (ITC.NS) said it would resume production at its factories "consequent upon" a favourable court order, two weeks after it decided to shutter its plants over the government's stringent new packaging rules.

India ordered that from April 1, 85 percent of a cigarette pack's surface had to be covered in health warnings, up from 20 percent, but cigarette firms halted production saying the policy was not clear.

India's $11 billion (£7.7 billion) tobacco industry is up in arms against the new rules and has taken the government to court. Industry estimates show the production halt has already cost $850 million and risks the livelihood of millions of farmers.

In a statement to the Indian stock exchange late on Friday, ITC, part-owned by British American Tobacco (BATS.L), said: "Consequent upon a high court order passed in favour of the company, the company will soon resume manufacture of cigarettes in its factories".

An ITC spokesman declined on Saturday to elaborate on ITC's statement to the stock exchange. Its statement gave no details of its court appeal or any subsequent orders.

The company also did not address whether it would print bigger health warnings on its packs. ITC said earlier this month it was not ready to print bigger, "excessive" health warnings. It also said the government was implementing new rules despite a parliamentary panel report that called for the size of the warnings to be reduced.

But the panel's report is not binding on the government, and health ministry officials have maintained that manufacturers must comply with the new rules.

Smoking kills more than 1 million people a year in India, according to BMJ Global Health. The World Health Organization says tobacco-related diseases cost the country $16 billion annually.

(The story was refiled to drop the extraneous word "it" from the headline)

(Reporting by Aditya Kalra; Editing by Douglas Busvine and Eric Meijer)