An Economic Times report states that a high-level meeting in New Delhi this week will try to chart a revival plan for the indigenous industry. While, a proposal to hike import duties on round bamboo sticks or raw agarbatti sticks will be high on agenda.
Bamboo sticks form China and Vietnam has flooded the market through the last few years. Huge reduction in import duty on raw agarbattis under the Indo-Asean free trade agreement is to blame for it.
Assessments indicate that the domestic agarbatti industry is importing round bamboo sticks and raw agarbattis (without perfume) worth.
Nearly 800 crore round bamboo sticks and raw agarbattis (without perfume) is imported in India per year.
In 2011, import duty was brought down from 30% to 10% and then to 5% in 2018. This has paved way for import of raw agarbattis surging from Rs 31 crore in 2009 to over Rs 540 crore in 2018.
While, Indian perfumers had about 2% dependency on raw agarbatti imports in 2009, it has surpassed 80% as on date, as per government data.
The government is weighing a two pronged approach to fight the crisis. Revising the import duty will be an option with an increase in India’s bamboo production.
KVIC has begun planting of saplings in Kanauj, Varanasi and Delhi. It will next set up agarbatti making units near these plantations to cut down on logistics cost.