Cut in import duty to hit incense units
Guwahati, March 4: The reduction in import duty from 30 per cent to 10 per cent on bamboo sticks for agarbatti (incense stick) will hit the industry in the Northeast, affecting nearly 30,000 women whose average income is between Rs 75 and Rs 105 daily.
Announced in the Union budget on February 28, the relaxation in the import duty will leave the artisans involved in this sector jobless, as there will a rise in the import of bamboo sticks from Vietnam and China.
“The reduction in duty from 30 per cent to 10 per cent will hit artisans of the region as this will enable import of cheap bamboo sticks from Vietnam and China which will render families involved in the industry jobless. This should be withdrawn and the import duty increased to 50 per cent,” Kamesh Salam, director Cane and Bamboo Technology Centre, told The Telegraph.
Sources said about 2 billion sticks are burnt everyday of which states like Tripura and others from the region fulfil 90 per cent demand of the raw sticks.
The Northeast produces 1 million tonnes of agarbatti sticks annually and there is potential for the market to increase through mechanisation of the splint-making process.
The landed price — the total expense of receiving goods at place of retail sale, including retail purchase price, transportation costs, duties, value added taxes, excise tax and other taxes — of sticks at Bangalore is around Rs 33 to Rs 35 per kg from the Northeast and the landed price of sticks from Vietnam was Rs 35 to Rs 36 per kg.
After the budget the expected price will be Rs 29 to Rs 30 per kg.
A feasibility study on establishing agarbatti manufacturing units in the Northeast found that the stick-making units in Tinsukia are facing serious competition from neighbouring countries like Vietnam and China.
The study was done by the National Institute of Agricultural Extension Management, Hyderabad, for Cane and Bamboo Technology Centre, Guwahati.
“Because of cheaper sticks that these countries are able to supply to vendors in Bangalore, the stick-making units in Tinsukia are not getting a good price. According to an estimate, if there would have been no competition from the neighbouring countries the industries in Tinsukia could have even fetched nearly Rs 80 per kg instead of Rs 35 per kg,” the study said.
Currently, the traders in the region buy bamboo sticks from individual rural household producers who are paid according to the number sticks produced. They grade the sticks based on count (number of sticks in a 1kg bundle), pack into gunny bags and truck them to large agarbatti producing companies to mainly Bangalore and Mysore.
The study also revealed that home-based workers producing bamboo sticks receive a little over 2 per cent of the final retail value.
“For these women, incense stick-making is the only income and if the import rates are lowered, their business would be affected as cheaper bamboo sticks would be preferred,” a source said.
The study recommended that agarbatti workers of the Northeast should be covered under the Minimum Wage Legislation. They should be covered by the Provident Fund Act and should get other benefits.
Agarbatti is a booming market in the country and is estimated at Rs 2,000 crore. In India, there are more than 10,000 units operating in the sector, with unregistered units outnumbering the registered ones. These units are spread across rural and semi-urban households, providing employment opportunities to nearly 800,000 household-based women workers.