India's Once-Struggling Agarbatti Industry Is On Its Way To Becoming Aatmanirbhar

In August 2019, the agarbatti, or incense stick, industry woke up to a shock.

The Government of India announced that agarbattis cannot be imported freely any further. The new restrictions were part of a series of measures taken to reduce Indian dependence on imported goods following supply-chain disruptions.

Industry experts say there was a 30 per cent surge in demand for incense sticks during the pandemic. Today, the agarbatti industry has a market of Rs 10,000 crore to Rs 12,000 crore a year in India.

The sales were not limited to agarbattis alone; there was a growing demand for air care, home care, and personal care products during the two waves of the Covid-19 pandemic.

“We were a bit shocked when the government announced that agarbattis cannot be imported any further. India was known for manufacturing incense sticks,” M R Suresh, the chief operating officer of Cycle Pure Agarbathies, told Swarajya.

The problem was that nearly century-old regulations had stifled the industry and entrepreneurs were struggling with manufacturing using domestically available materials.

Thankfully, only two years before the import restrictions were put in place, the government had fixed a 90-year-old law that severely affected agarbatti manufacturing in India. The Indian Forest Act, 1927, was amended to specify that the bamboo species was technically grass and not tree.

“While loads of teak furniture were being transported without transit permits, bamboo sticks were being taxed and heavily regulated. This was laughable. Why do bamboo sticks need licences? Policy makers were to blame for this. At the end of the day, bamboo was always treated as a form of grass,” Suresh added.

“We (the agarbatti industry) lost the iccha-shakti (will) to manufacture incense sticks. To move five kilos of bamboo, I’ve had to wait for three days at the Forest Department’s office. There was a lot of running around involved,” he said.

“The issue is identical when it comes to procuring jigat as well. If these trees are endangered, then why didn’t previous governments make any effort to cultivate the trees?” Suresh said, recalling the age-old licence raj-era policies that troubled the industry earlier.

Jigat powder is prepared from the natural red bark of the Machilus Macrantha/Litsea Glutinosa tree and is used to prepare the basic binding material to make incense sticks.

Even with the restrictions gone, it has not been easy for the industry to source Indian raw materials.

Agarbatti manufacturers first began importing many of these raw materials from Southeast Asian countries, where bamboo and jigat is available at much lower prices as compared to India’s North East.

But to procure transit permits to get these materials from the North East to a southern state like Karnataka, they had to pass through almost 16 checkpoints. Thereafter, the local Forest Department had to be intimated. This was all happening when the bandit Veerappan was smuggling away the most valuable trees from Indian forests.

In private, many manufacturers tell us that in order to procure bamboo sticks from the North East, they have to spend nearly Rs 17 per kilogram on transportation alone. If they have to import the same from Vietnam, they end up spending less than Rs 3 per kilo.

Additionally, there were logistical problems that were frequent back in the day. But infrastructure in the North East has improved dramatically over the last few years.

All India Agarbathi Manufacturers' Association (AIAMA) and its representatives have met many political leaders at a state and central level.

“Our former president, Sarath Babu P S, Cycle’s Arjun Ranga, and many other representatives of the industry met Union ministers and requested them not to impose import restrictions on bamboo yet.”

“We are also trying our best to become aatmanirbhar (self-reliant), but it certainly takes time to get there. Even today, India requires 6,000 tonnes of bamboo sticks per month. We are only producing 120 tonnes, of which Cycle consumes 100 tonnes. Machinability with the imported bamboo is very high, but it is low when it comes to the Indian bamboo,” Suresh tells us.

Government’s Proactive Policies

Everyone rushed to the North East because of the abundance of bamboo available in the region. Ornamental bamboo cannot be used to manufacture sticks. The right species of bamboo is required, especially one that can endure machinability. It needs to take the stress and strain of the machine. It also needs to be easily rollable.

Manufacturers took a good couple of years to identify a conducive species (bambusa tulda) of bamboo in India. Once they did, they had a plan to counter the possible depletion of said species. Saplings are being planted across many regions of the country today. They tell us that the Indian government were proactive in helping the industry.

Factories that manufacture these sticks need to be close to the forests. Even today, in many parts of the North East, bamboo is transported from forests using the water current in a river or a stream that may flow downhill.

But 6,000 tonnes of bamboo cannot be transported using such makeshift methods. It needs to be transferred by road or ship, which, in turn, requires good infrastructure.

Once it is transported, electricity is needed for the factories that are set up, where bamboo is converted into sticks that are usable for the manufacture of agarbattis. There’s a huge electricity deficit in these forested regions as barely any lines flow through there.

The Ministry of Development of North Eastern Region (DoNER) has been cooperative in this regard, industry seniors tell Swarajya. A lot of progress has been achieved in the region in the last few years.

Today, the agarbatti industry is busy scouting for quality seeds and exploring a suitable agroforestry model to grow bamboo independently. An entire supply chain is being created, one step at a time. Any changes will only reflect in a few years from now, they say.

“Many Western countries today use incense sticks as room fresheners. Agarbattis are in demand globally, and our products are not limited for sales in India alone. It has become an indulgence, a habit that people have cultivated as part of their lifestyle,” Sarath Babu P S, a second-generation agarbatti entrepreneur and former president of AIAMA, tells Swarajya.

When it comes to retaining hand-rolling as a skill set, he says that the younger generation of entrepreneurs in India prefer machine manufacturing of incense sticks.

So, the talent is now restricted to certain pockets of Bengaluru, Ahmedabad, Nagpur, and Mysuru. But hand-rolled agarbattis today have premium value as compared to the machine-made ones, he adds.

“Many workers today have flexible timing when it comes to working in our factories. Women finish their household chores, come and work in our factories, and go back home by evening. This made for their secondary income, many times their primary source of income,” Sarath Babu told Swarajya.

Similar views were shared by the current president, Arjun Ranga.

But, even as the government and industry are working to iron out all the issues involved, a familiar foe has surfaced.

“Now we face a trial by NGOs and other international institutions which claim that incense sticks cause ‘home air pollution’ and may be injurious to health. But agarbattis have been manufactured and used for generations now, and no one has ever complained about its usage. Why put us through scrutiny now?” one industry veteran asks.