The health ministry has accepted the recommendation of an internal panel to ban the sale of single cigarettes, Health Minister JP Nadda said in a statement in the upper house on Tuesday.
The World Health Organization (WHO) Framework Convention on Tobacco Control states that countries "shall endeavour" to prohibit such sales as it makes them more affordable for minors.
India is a party to the convention.
Shares in ITC Ltd , India's largest cigarette maker, closed 5.2 per cent lower in a broader Mumbai market that fell 0.8 percent.
A spokesman for ITC did not immediately respond to request for comment.
The health ministry has circulated a draft note for inter- ministerial consultation on the panel recommendation, said the government statement.
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