In Sivakasi, fireworks companies are eyeing a market dominated by China for Rs 6,000 crores
China has a turnover of Rs 26,000 crore annually, which gives it an edge in the global export market, according to a report.
It is now targeting the global market which is dominated by Chinese players, as Sivakasi, the city in Tamil Nadu, is synonymous with the green firecracker industry.
As a result of its rapid adoption of environmentally friendly standards, Sivakasi’s fireworks industry has grown to an estimated Rs 6,000 crore in size.
Chinese exporters hold an edge with a turnover of Rs 26,000 crore, according to an Indo-Asian News Service report. The city’s industrial players want to gain ground in the global export market. According to the news agency, S Maheswaran, owner of Sivakasi’s top firecracker company Standard Fireworks, “the American and European markets are looking at us like the industry used to look at China 20 years ago.”
The swift acceptance of green standards is one of the factors contributing to the expansion of Sivakasi’s firecracker sector. Green crackers, which produce fewer pollutants than conventional crackers, are the main product of the city’s firecracker factories.
The Council of Scientific and Industrial Research (CSIR), which recently opened a lab at Sivakasi called the National Environmental Engineering Research Institute (NEERI), has given the city’s firecracker units a much-needed boost. In the past, cracker samples were sent to the CSIR-NEERI lab in Nagpur for analysis to make sure they complied with environmental requirements. Firecracker manufacturers can now save time and money thanks to the lab’s establishment in Sivakasi.
Notably, the CSIR-NEERI lab offers an additive that must be used with the firecrackers. By using this method, it is guaranteed that the crackers pollute the air at least 30% less than regular ones. According to P Ganeshan, President of the Tamil Nadu Fireworks and Amorces Manufacturing Association (TANFAMA), the industry’s quick transition to green crackers has sparked a surge in enthusiasm among the players to pursue the international market.
The article stated that the industry is also demanding help from the Center to address the problem with the global export supply chain. The large-volume exports from China are anticipated to receive preference from the shipping lines over the smaller shipments from Sivakasi.
Businessmen suspect a Chinese conspiracy
Chinese interference in Sivakasi’s hardship and the battle was suspected by V Raja Chandrasekaran, President of the Federation of Tamil Nadu Fireworks Traders. The WTO agreement for a free economy took place in 2013 and 2014, allowing Chinese products to be imported into India despite protests from Sivakasi opposing their entry into the Indian market.
“The first person to declare that Chinese crackers would not be permitted at that time was the then-CM of Tamil Nadu, J Jayalalithaa. The cracker business is an indigenous industry, and Narendra Modi has pledged to save it, according to remarks he made when campaigning in Ramnad. We were relieved that Chinese products will no longer be permitted after that “he said
Chinese market espionage in India
Chinese goods are not allowed to be sold in India, according to the Confederation of All India Traders (CAIT), which represents millions of small traders. Several states, including Tamil Nadu, have enacted similar bans on the usage or sale of Chinese-made crackers in domestic markets. However, there are numerous ways in which they continue to smuggle themselves into the market around Diwali.
It was reported that imports climbed from US$2 billion in 2001 to US$70 billion in 2020 in a CAIT poll taken in 2021. Additionally, the Indian Commerce and Industry Ministry reported that between April and July 2021, Chinese imports surged by more than 66% to US$27.66 billion, despite CAIT’s announcement of a ban on Chinese items for two consecutive years, 2020 and 2021.
The list of uncertainties and challenges keeps the business on edge even as Sivakasi, the center of the cracker manufacturing industry, prepares for Diwali. The Supreme Court authorized the National Environmental Engineering Research Institute’s (NEERI) proposal for green crackers as Sivakasi and its factories concentrate on development. The main challenge to Indian manufacturers of crackers is competition from the Chinese market.
The cracker industry has had several setbacks during the past eight years, primarily as a result of the restrictions placed on specific chemicals used in the production of crackers. The selling and exploding of fireworks were prohibited in areas like Delhi-NCR and those others where the air quality index was above 200, which caused losses for the makers as well.
Even though Sivakasi’a cracker producers work hard to supply NEERI-approved and PESO-certified green crackers, the traders claim that the market is flooded with counterfeit Chinese crackers. The NEERI-recommended mixture is not utilized in Chinese crackers, and the materials used are also far less expensive, hence the product is also two to three times less expensive than crackers made in India.
It is quite challenging for us since cheaper, illegal Chinese crackers enter the Indian market, according to Senthil, the proprietor of Rathinam Crackers, a dealer and distributor from Sivakasi. Since they don’t adhere to the NEERI formula and can’t be categorized as green crackers, these items are less expensive, but because they are available in various northern states, they are eating into our market.