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How to Start Agarbatti Manufacturing in India

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Overview: Agarbatti Manufacturing

In the next five years, India's agarbatti manufacturing industry is predicted to develop at an exponential rate, reaching Rs 12,000 crore. Agarbatti is manufactured from the 'Agar' tree, which is an evergreen tree. India is the world's greatest producer of agarbattis, thanks to its tropical environment and abundance of agar trees. The agarbattis have been around since the Vedic era. As mentioned in the Atharvaveda and Rigveda, agarbatti was used for its fragrant and therapeutic properties. The use of agarbatti for medicinal purposes has been a part of Ayurveda since the beginning. Agarbatti is a staple in practically every Indian family. The burning of agarbattis has been a tradition in India's religious and social rituals since ancient times.

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In India, agarbattis are used in almost every aspect of life. People from practically every segment utilize agarbattis because of their deep religious significance, which says volumes about the agarbatti's relevance despite its diversity. It has become a part of our lives, whether in a temple or mosque or even through yoga and meditation. The use and demand for agarbattis are not limited to India; it has spread to other regions of the globe. Because of the spread of Buddhism, Asian countries such as China and Japan have been a center for agarbattis demand. This aroma is used by Europeans in the form of perfumed oil. Sunni and Shia Muslims all around the world appreciate the healing virtues of Agar woods.

Market Size of Agarbatti in India

The agarbatti manufacturing industry employs up to 20 lakh people and has become our country's most vibrant industry. In India, agarbatti and dhoop are made by hand, which serves to create a huge number of job possibilities in rural areas. The rising number of temples, pujas, and ceremonies, rising disposable incomes, and growing tourism are some of the key causes for the significant growth of the agarbatti-making sector in India. The world's expanding love affair with Indian culture, as well as the growing impact of Ayurveda, Yoga, and Khadi, among other things, has resulted in increased agarbatti exports in recent years.

Read Our Blog: Agarbatti Making Business License

Following are the benefits of using agarbattis

  • It is burned to purify or cleanse the air since they are natural air fresheners and deflect negative energy, as well as a powerful organic bug repellant.
  • Its aroma is utilized in perfumes all throughout the world, and it comes in a variety of aromas, including sandalwood, rose, mogra, and kevda.
  • The aroma of agarbatti relaxes the mind and provides a variety of medicinal properties.
  • Its scent serves to lift people's moods and aids in drifting off to sleep.
  • The agarbatti production industry in India is only expected to expand, allowing rural and urban populations to gain self-sufficiency and empowerment.

Raw Materials for Agarbatti Manufacturing Business

The raw material for agarbatti production is readily available in Indian markets at a low cost. Agarbatti is made from bamboo, which is widely available in Indian marketplaces and can also be made using stick-making equipment. Aromatic spices, bamboo sticks, and packing supplies are required for the agarbattis to be made.

The agarbatti-making machines are the backbone of the Agarbatti manufacturing firm, so they must be chosen based on the business's production and money. The usage of dryer equipment and powder mixer machines has advanced the agarbatti manufacturing process. Manual agarbatti machines are available on the market at a very low cost because they do not use any energy and instead rely on pedals, making this a more ecologically friendly and cost-effective enterprise.

The fully automatic high-speed automatic agarbatti machine requires little manpower. A drying machine is particularly useful in a humid production environment and is also beneficial during the rainy season. A powder mixture machine is useful for obtaining the precise amount of dry or wet powder mixture required by the business.

Following are the steps required in the manufacturing process of agarbattis

  • Preparation of the right mixture in the correct proportion.
  • Loading the mixture in the machine with a Bamboo stick.
  • Collect the final product, i.e., Agarbatti.
  • Keeping the agarbatti for dry-up.
  • Adding the essential fragrance.
  • Packaging of agarbatti.

Agarbatti Manufacturing Business of India and the world- An Aroma of Profit

The agarbatti manufacturing industry is a high-profit, export-oriented industry that contributes to India's trade deficit stabilization. Regardless of the economic or political context, agarbattis has remained in high demand in international markets. According to figures from the Indian government's ministry of commerce, India exported agarbattis valued at $498.02 million between FY2012 and FY2016, which is a significant amount. Furthermore, annual exports increased by 11.57 percent in the same year, from $89.64 million to $100.02 million.

India now exports agarbatti to over 160 nations, including the United States, the United Kingdom, Malaysia, Nigeria, and others. With an import value of $11.3 million in FY2016, the United States became the leading importer of agarbattis from India, followed by the United Arab Emirates and Nigeria. The Indian agarbatti exporters have always been able to locate a new market, which has helped them stay afloat in the industry. Some businesses have begun to use machines in order to compete with the increased competition from Chinese marketplaces and to meet domestic and worldwide demand. To boost exports and reduce imports, the government made two major decisions: it changed the import policy for agarbatti from free to restricted trade, and it raised the import duty on 'round bamboo sticks' from 10% to 25%, creating a massive opportunity for India's booming agarbatti manufacturing industry.

Role of Government in Boosting Agarbatti Manufacturing Business in India

The agarbatti sector received a boost in 2009 when it was recognized as a handicraft item. As a result, the agarbatti manufacturing industry became eligible for duty drawbacks, and the Merchandise Exports from India Scheme granted 5% incentives (MEIS). The government has expanded its support to artisans involved in the agarbatti manufacturing business as part of the Make in India initiative, and the MSME Ministry has approved the "Khadi Agarbatti Atmanirbhar Mission" to create jobs for migrant workers and unemployed people in various parts of the world. Its goal is to help local artists and the agarbatti sector thrive.

The government is looking at all elements of increasing the agarbatti manufacturing sector, including providing machines for making agarbattis and assuring an adequate supply of inputs and raw materials, which have been in high demand in the last year. Considering current agarbatti consumption of around 1,490 MT per day and India's expanding agarbatti production of 760 MT per day, the government of India's Self-Reliant India program has expanded to more than Rs. 55 crore. The government will spend Rs. 2.20 crore to help roughly 1,500 craftsmen by building two centers of excellence at IITs/NITs and a Fragrance and Flavor Development Centre in Kannauj. The government will invest Rs.50 crore in 10 new SFURTI (Scheme of Fund for Regeneration of Traditional Industries) clusters to assist an extra 5,000 craftspeople. These programs' pillars are constantly aimed at assisting craftsmen with training, raw materials, marketing, and financial help.

Khadi Agarbatti Aatmanirbhar Mission

KVIC will provide a 25% discount on the cost of machinery as part of the khadi agarbatti aatmanirbhar program, and the craftsmen will pay the remaining cost in convenient monthly installments. The raw materials for creating agarbattis will be given by the business partners. The KVIC and the private company partner will split the cost of artisan's training, with the commission covering up to 75% of the cost and the business partners covering the balance. By producing 80kg of agarbatti each day, each automatic agarbatti production machine will directly employ at least four people, and one powder mixing machine will employ two people.

By announcing on September 4, 2020, the Modi government has expanded this program, increasing the number of automatic agarbatti-making machines from 400 to 200 and providing an additional 500 pedal-operated machines to "Self Help Groups" through 20 pilot projects, as well as providing them with proper marketing and raw materials. It also seeks to prioritize ‘migrant workers' and craftsmen who are developing hand-rolled agarbatti as part of the scheme, which will benefit 1500 artisans right away.

To boost the agarbatti manufacturing industry in India, the government plans to assist artisans by focusing on the overall aspects of the product, such as fragrance and packaging innovation, and proper marketing linkages under the SFURTI Scheme and strengthening machine manufacturing capabilities to achieve self-sufficiency in the country. These projects aim to provide artists and businesses a head start in developing an indigenously capable market, which will eventually lead to more exports and job prospects.

Meeting the Objectives of PM Narendra Modi

To support Prime Minister Narendra Modi's ideas and goals, the KVIC or Khadi Board increased its subsidy from 30% to 40%. As a result, the Board is able to provide more jobs to the rural and semi-urban population, as well as enhance their living conditions. KVIC has resolved to solely buy machines from Indian manufacturers that are built locally. In order to stimulate the indigenous market during the festival season, the government has promised a refund increase of up to 40%.

Despite the country's economic recession, the domestic consumption of agarbatti manufacture has increased in COVID-19 times due to certain weird and unique factors, such as people are more prone to pray more in hard times, and thus they would need more agarbattis to placate gods. The visionary Prime Minister of India has recognized the necessity of boosting the Agarbatti Manufacturing Business in India, and as a result, attempts have recently been made to promote this industry through various programs and plans. There is a great potential for employment development due to the massive gaps between demand and supply of agarbatti.

Empowering Rural Indian women through Agarbatti Manufacturing Business in India

The agarbatti industry is mostly dependent on rural India. Many agarbatti manufacturing businesses in India can connect with rural families and use this underutilized resource to provide rural empowerment and livelihood, as women account for nearly 80% of the workforce in India, and they play a significant role in agarbatti rolling and packaging activities, and they are led by working in factories or at home, making it easier for them to manufacture and dispatch them for sale.

Because of the easy availability of raw ingredients and a simple manufacturing procedure, agarbatti manufacturing is a labor-intensive sector because they are handcrafted primarily by women workers. Thus, by employing rural women in the agarbatti manufacturing business, we can achieve a two-fold success in the governments' Make in India' and ‘self-reliant' India initiatives by empowering local women and improving their standard of living, as well as expanding the indigenous sector, which will eventually lead India to achieve the milestones.

Conclusion

Despite the fact that agarbatti manufacturing is considered a small cottage industry, India has managed to dominate the market in terms of exports and domestic production, despite stiff competition from China and Vietnam; India is doing a good job of dominating the market with its premium quality agarbattis. Agarbatti manufactured in India is often regarded as the greatest in the world, with a global client base. The initial investment required to establish an agarbatti manufacturing firm is modest, making it easier for small business owners to get started. Because it is a highly profitable business, it can be started by anyone, even at home.

The agarbatti manufacturing industry has the potential to help India's government implement its rural industrialization agenda to a large extent. The Indian government is playing a critical role in boosting the agarbatti manufacturing industry in India by lowering entry barriers, making imported cheap raw materials available, and lowering import duties, all of which have resulted in a 15.5 percent increase in market share and vast job opportunities in this highly labor-intensive industry.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.

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Author
Surbhit Sharma
I have worked for many internet blog pages and news portals. currently, I am working as a content writer for Corpseed Pvt. Ltd. I like to write blogs and articles in the field of different services.