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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