Japan Tobacco Inc. (2914.TO) will exit its operations in India, where rules have been amended to prohibit foreign companies from making fresh investments in cigarette manufacturing, a spokesman for the company’s Indian operations said Thursday.

The decision by the world’s third-largest tobacco company by sales volume is based on “…several foreign investment, regulatory, duty and tax-related uncertainties,” Proful Lall told Dow Jones Newswires.

He didn’t say when or how the company would exit its India operations.

Japan Tobacco, which operates in India through a local joint venture company, has only a very small presence in the country, selling the Winston and Gold Coast cigarette brands.

Its requests to raise its stake in JT International India Pvt. Ltd. to 74% from 50% were not cleared by the country’s Foreign Investment Promotion Board before April 2010, when 100% foreign direct investment was allowed in cigarette manufacturing.

But in April 2010, the Indian government banned fresh foreign direct investment in cigarette manufacturing altogether.

The government has been making legislation stricter for the cigarette industry.

Smoking has been banned in public places, and the federal and state governments have been increasing taxes on cigarettes and trying to make it mandatory for cigarette makers to display more graphic health warnings on their packs.

A nationwide effort to make smoking both more expensive and more uncomfortable is forcing smokers to cut back, but it has not reduced the number of smokers. Tobacco purchases nationwide dropped 23 percent between 2007 and 2010, largely because the average price has increased by nearly 50 percent, according to recent figures from the Bureau of Labor Statistics.

That includes a $1.75 state tax hike in Wisconsin since 2008, driving per-pack taxes to $2.52 — the eighth-highest state tax in the nation.

But at the same time, the number of adults who identify themselves as smokers nationwide — about 20 percent of the population — hasn’t changed, according to the Campaign for Tobacco-Free Kids. The number of young smokers also has hovered around 20 percent during the past five years and now sits at 19.5 percent. Overall, Wisconsin’s adult smoking rate of 19 percent ranks 35th lowest in the country — a drop from its rank of 25th lowest nationally in 2007, according to the Campaign for Tobacco-Free Kids.

That leads anti-smoking advocates to conclude that smokers such as Dean McKinley are burning through fewer cigarettes, but not giving up the habit.

McKinley, 52, of Tomahawk said he has cut his habit in half over the past two years, from up to two packs each day about one pack. Two reasons are the cost and a state law that keeps him from smoking during his pipefitter job.

“It helps you cut back,” he said.

But even price hikes and regulations aren’t enough to change some habits.

Stacy Gahlbeck, 49, of Minocqua was smoking with McKinley on Thursday outside the Wausau Center mall. She pays $50 for a carton of Marlboro Light 100s on the Lac du Flambeau reservation, and burns through a pack a day. Gahlbeck said if she did not have access to cheap cigarettes — her brand is at least $70 a carton off the reservation — she would consider kicking the habit.

“I would quit if I had to pay $70 for a carton,” she said.

All that cutting back might be keeping some cash in smokers’ wallets, but it’s not doing much for their health.