As Diwali approaches in India, the demand for crackers increases. The firecrackers business in the country is worth around Rs 7000 crores, but the surprising thing is that despite having such a large industry, India has not been able to establish itself in the global market. Exports of firecrackers from India are less than 1 million dollars per year. India’s share of the global firecrackers export market is only 0.042 percent.
The largest production takes place in Sivakashi
The city of Sivakashi in Tamil Nadu is the largest center of firecracker industry in India. It accounts for about 85-90 percent of the total firecracker production of the country. According to the Tamil Nadu Firecrackers and Amours Manufacturers Association (TANFAMA), the country’s firecrackers market is around Rs. 7,000 crores. In this the manufacturing business at the factory level is around Rs. 2,000 crore, while the rest comes from wholesale, transport and retail trade. More than 80 percent of the industry’s earnings come in the 30 days around Diwali. Apart from this, crackers are in demand on festivals like Vishu in Kerala and Ganesh Chaturthi in Maharashtra.
India is far behind compared to China
China dominates the global fireworks business. According to UN Comtrade data, China exports about 1.1 billion to 1.23 billion dollars worth of fireworks each year. While India’s exports are only around 7.57 lakh dollars. The city of Liuyang in Hunan Province, China is a major center of fireworks production in the world. It accounts for about 60 percent of China’s total output and about 70 percent of global exports. Low cost, availability of raw materials, government support and strong supply network keep China ahead of the competition.
Why is there a problem with exports?
There are many big challenges facing the Indian crackers manufacturers. Firecrackers are classified as dangerous explosives. Due to this, their transportation, packaging, insurance and handling costs at the ports increase significantly. Apart from this, it is also difficult for small traders to comply with various state regulations and international safety standards. The firecracker industry in Tamil Nadu has been placed in the red category, while the industry has long been demanding its inclusion in the low risk category.
Impact due to restrictions on chemicals
Exports have also been affected by bans and controls in India on some chemicals used in the manufacture of crackers. The ban on barium nitrate following the Supreme Court’s 2018 order has made it difficult for Indian manufacturers to produce some of the formulations used in the international market.
What needs to be done to increase exports?
According to experts, India has to focus on modern technology, better quality and international safety certification in the firecrackers industry. A common testing center at Sivakashi, good packaging facilities and easy approvals need to be developed.
Along with this small producers have to tie up with overseas buyers and distributors. If India overcomes these challenges, Shivkashi can rival China’s Liuyang in the global market.
