India's Supreme Court on Wednesday said the tobacco industry must adhere to federal rules requiring stringent health warnings on cigarette packs, in a major setback for the $11 billion industry that opposes the new policy.

The court also turned down an industry plea to stay the implementation of the new tobacco-control rules introduced from April 1, which require health warnings to cover 85 percent of a cigarette pack's surface, up from 20 percent earlier.

The tobacco industry "should not violate any rule prevailing as of today," the two-judge bench said during the 45-minute hearing inside a packed courtroom in New Delhi.