The draft ordinance included the strict prohibition on production, import, distribution, sale and use of electronic cigarettes along with imprisonment and penalty for violators.
Sitharaman said Union Cabinet has given its approval to ban e-cigarettes.
Addressing the press briefing, Nirmala Sitharaman announced that e-cigarettes production, manufacturing, sale, import-export, and advertising among other things will be banned in India. Calling E-cigarettes as "style statement" she said that people are getting into the habit of e-cigarettes as it seems cool.
India's ban came a day after NY prohibited flavored e-cigarette products and a week and the Trump administration said it was considering a nationwide ban amid a vaping crisis. "And they come in over 150 flavours", Sitharaman said at the conference. The first offence will be punishable with a jail term up to 1 year or a fine up to Rs. 1 lakh or both.
Around 120 million Indians smoke cigarettes or other tobacco products but the proportion of users has fallen since 2010. Repeat offenders will be penalised with a jail term up to 3 years and fine up to Rs. 5 lakhs.
"I feel it's absolutely absurd", Aronjoy, 22, a student and occasional vaper, told AFP in a shop selling e-cigarettes.
In 2018, Altria - the USA maker of brands such as Marlboro and Chesterfield - splashed out nearly $13 billion on a stake in one of the biggest e-cigarette makers, Juul.
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Eighteen states and two Union territories have already prohibited the use and sale of e-cigarettes, e-hookah and vaping, but in the absence of a central law, the enforcement has been weak so far.
India's health ministry, which proposed the ban, had said it was needed to ensure e-cigarettes don't become an "epidemic" among children and young adults. This is the reason it is also called vaping.
"The major difference between conventional and e-cigarettes is that the latter do not contain tobacco".
Following the announcement, shares of cigarette companies have soared.
The move comes just a week after US President Donald Trump proposed a ban on flavoured e-cigarettes.
The ordinance will likely be replaced with a bill in the next session of Parliament. Currently, there are over 460 e-cigarette brands with varied configurations of nicotine delivery and over 7,700 flavours available in the market.