Modi Goverment to hit China with Incense Sticks, plans cut its Rs 546 crore import its "boycott Chinese product' call

In another move to hit China and intensify 'Wallet War', India has launched a unique scheme to cut import of Aggarbati (Incense Sticks) from China and generate nearly 1 lakh domestic self-employment with little or no investment by the artisans.

If KVIC is to be believed it would hit nearly Rs 546 crore Chinese Industry, which is providing raw material to Indian manufacturers. If all goes well India would not only become self-reliant in Agarbati sector but would also export it to various counties--doubly hit the Chinese industry.

The unique PPP model prepared by the Government is aimed at largescale production, reducing production cost and generating employment at large scale particularly in village areas. As per the Modi government’s plan of action,  KVIC, Agarbatti machine manufacturer and major Agarbatti production houses, would train the men force. While the KVIC would finance machines to artisans at easy instalment with 25 % capital subsidy, Agarbatti production houses would enter into an agreement with the artisans to purchase their entire production. They would pay the artisans on a weekly basis and would take care of packaging, marketing and selling of the produce, said a senior officer of the MSME.

It is really sorry that despite being a cottage industry, India is heavily dependent upon the import of Agarbati. If senior officers of KVIC (Khadi and Village Industries Commission) are to be believed, Agarbatti import has increased from Rs 31 crore in 2009 to Rs 546 crore in 2019. The dependence of Agarbatti raw material has increased from 2 % to 80% during the same period, the KVIC claimed.

The government has claimed that the unique employment generation program was proposed by KVIC to make India Aatmanirbhar in Agarbatti production. The program named as “Khadi Agarbatti Aatmanirbhar Mission” aims at creating employment for unemployed and migrant workers in different parts of the country while increasing domestic Agarbatti production substantially.

KVIC would soon launch a pilot project and late on it would be implemented in a full-fledged manner aimed at generating nearly one lakh jobs in the coming one years.

The scheme designed by KVIC is on PPP mode. It is unique in a sense that with hardly any investment, it would create sustainable employment and help private Agarbatti manufacturers to scale up Agarbatti production without any capital investment by them.

Under the scheme, KVIC will provide Automatic Agarbatti making machines and powder mixing machines to the artisans through the successful private Agarbatti manufacturers who will sign the agreement as business partners. KVIC has decided to procure only locally made machines by Indian manufacturers which also aims at encouraging local production. 

While KVIC will provide 25% subsidy on the cost of the machines and will recover the remaining 75% of the cost from the artisans in easy instalments every month. The business partner will provide the raw material to the artisans for making Agarbatti and will pay them wages on job work basis.

Cost of artisans’ training will be shared between KVIC and the private business partner wherein KVIC will bear 75% of the cost while 25% will be paid by the business partner.

Each automatic Agarbatti making machine makes approximately 80 kg Agarbatti per day which will provide direct employment to 4 persons. One powder mixing machine, to be given on a set on 5 Agarbatti making machines, will provide employment to 2 persons.

The current job work rate for Agarbatti making is Rs 15 per kg. At this rate, 4 artisans working on one Automatic Agarbatti machine will earn a minimum Rs 1200 per day by making 80 kg of Agarbatti. Hence every artisan will earn at least Rs 300 per day. Similarly, on the powder mixing machine, each artisan will get a fixed amount of Rs 250 per day.

As per the scheme, the wages to the artisans will be provided by the business partners on a weekly basis directly in their accounts through DBT only. Supply of raw material to the artisans, logistics, quality control and marketing of the final product will be the sole responsibility of the business partner. After recovery of the 75% cost, the ownership of the machines will automatically be transferred to the artisans.

A two-party agreement to this effect will be signed between KVIC and the Private Agarbatti manufacturer for the successful running of the project on PPP Mode.

The scheme has been designed in the wake of the two major decisions – import restriction on Raw Agarbatti and an increase in import duty on Bamboo sticks - taken by the Ministry of Commerce and Ministry of Finance respectively on the initiative of UNION MSME Minister Nitin Gadkari.

KVIC Chairman Vinai Kumar Saxena said the two decisions of the Central Government created a huge employment opportunity in the Agarbatti industry. “In order to encash the huge employment generation opportunity, the KVIC designed a program namely “Khadi Agarbatti Aatmanirbhar Mission” and submitted to the Ministry of MSME for approval,” Saxena said.

The program aims at handholding artisans and supporting the local Agarbatti industry. The current consumption of Agarbatti in the country is approximately 1490 MT per day; however, India’s per day production of Agarbatti is just 760 MT. There is a huge gap between the demand and the supply and hence, immense scope for job creation.

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