Agarbattis (incense sticks): India

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The economics of the sector

As in 2019

John Sarkar, August 29, 2019: The Times of India

First, it were idols. Now, even agarbattis (incense sticks) that are used in worshipping deities are being imported from other countries, including China and Vietnam, data from Khadi and Village Industries Commission (KVIC) has revealed.

The Rs 6,000-crore domestic agarbatti industry in 2018 imported around Rs 800 crore worth of incense sticks, including round bamboo sticks and raw agarbattis (sans perfume), which have led to a decline in the number of agarbatti projects and loss of employment in the sector. “While the average import of round bamboo sticks from 2008 to 2011 was even less than Rs 1 crore, it went up to around Rs 250 crore in 2018 after the reduction in import duty,” said KVIC chairman Vinai Kumar Saxena.

Similarly, import of raw agarbatti (bamboo sticks coated with masala) into India surged from Rs 31crore per annum in 2009 to Rs 546 crore in 2018.

Import of raw agarbatti surged in 2018, especially after import duty was reduced from 30% to 10% in 2011 and gradually brought down to 5% in 2018 due to the Indo-ASEAN Free Trade Agreement (FTA).

To reduce India’s dependence on imports, KVIC said it will help Indian farmers grow a certain variety of bamboo called Bamboosa Tulda — which has an inter-nodal length of 22 inches. The minimum inter-nodal length for agarbatti-making must be at least 12 inches, the organisation said. The organisation aims to plant around 20,000 saplings of the variety every year.

“If local farmers start growing high-quality bamboos on their lands, it would end total dependence on import of raw agarbattis and sticks from abroad, which would not only save precious forex, but also create employment opportunities for the people engaged in it, besides increasing the income of farmers,” said Saxena.

“It is evident from the alarming figures that in 2016-17, we had established 2,831 projects of agarbatti making, with the Rs 10-crore disbursement as margin money and created 22,648 direct employment in this field. Sadly, in 2017-18 and 2018-19, we could establish only 279 and 397 units, respectively — which has created a heavy loss in employment in the agarbatti-making industry.”