Overview of Miscellaneous Products Panel

The Miscellaneous Products Panel comprises of various products namely

  • Safety Matches,
  • Fireworks (Pyrotechnical Articles),
  • Activated Carbon,
  • Coconut Shell Charcol,
  • Urea, etc.

The forefront runner for export under this segment is Safety Matches & fireworks.

Industries at a glance

Henning Branded of Britain invented Safety Matches in 1669, however the origin of Matches is dated back to China.  In India Matches were imported from France & England.  Later in 1921 Matches were manufactured at Kolkata by machines.  In time, Sivakasi in the Southern part of India began manufacturing Matches and is now an industrial town known for its matches, fireworks and printing industries.  With its low rain & dry weather, Sivakasi is the apt location for these industries.  Production goes on about 300 days a year, exports are made to different countries for different festivals.  Due to the busy workmanship in this small town, Sivakasi has earned the nickname of “Mini Japan” conferred by our late Prime Minister Shri Jawaharlal Nehru.

Matchsticks are manufactured in many different ways and come in various sizes, but the handmade Safety Matches are the most popular throughout the world.  The majority of match industries in India are concentrated in the city of Sivakasi.  Earlier the raw materials for the manufacture of matchsticks were being imported, but gradually India has become self-sufficient in the manufacture.  This self-sufficiency has helped the domestic industry to expand by leaps and bounds.

Though matchsticks and matchboxes were a relatively modern invention, Fireworks were said to be available in China as early as 1200 A.D.  The use of Fireworks spread to the Arab countries from China and from there to Europe, so much so that Italy also gained expertise in the manufacture.  In India handmade fireworks had its origin at Bengal.  Fame of some Fireworks items such as Bengal illumination and Bengal Lights, Colour Matches show that Bengal is the origin of India.  The success of handmade Safety Matches turned to the making of Bengal Lights know as Colour Matches.  This eventually led to the making of Sparklers and other items.  Firework products, which have been imported from China, were stopped during 2nd World War by which the fireworks industries got uplifted in Sivakasi.

Down the years, the use of fireworks has become an integral to the culture of many countries, so much so that in countries like India and China, festivals are considered incomplete without the display of light and sounds of the fireworks.  Fireworks are also traditionally associated with the observance of many events in the United States, England, France & Germany.  India has been producing fireworks for years together, and therefore at present can boast of a multi-Million Dollar industry.  The industry comprising of over 100 units manufacturing various grades of fireworks and Matches in the organised sector provides livelihood to Millions of people in India.

By fusing traditional knowledge with modern advances in technology we have the distinct edge over products in other countries.

Safety Matches

The Match industry comes under the purview of Sector, which is concentrated in the drought prone southern districts of Tamilnadu.  It provides employment to lakhs of people – 90% of them are women.  Splints is the one of the main raw materials for manufacturer of matches; Due to shortage of timber, we are forced to import wood logs (Populus nigra) from Belgium & Germany (only) regularly through Tuticorin port for the past 9 years for splints

Issues and challenges for Miscellaneous Products Industry

Safety Matches

India, Pakistan and China are the major players in the match industry. In India the drawback rate has been reduced from 7% to 1.5% in the last 5 years where as in Pakistan present Incentive rates are much higher than our older rate (up to 25%). The price difference of matches between India and Pakistan is almost $2.00 per carton contains 1000 match boxes. If these rates are corrected then the industry can do a turnover of 79 million US dollars from the current level of 50 million US dollars.  So government needs to increase the Duty draw back and RODTEP rates needs to be increased to compete with Pakistan. A Forex rate has to be stable. The 5 % appreciation of our currency has affected our exports drastically.

There is a large potential to increase the volume of trade in Africa and South America, if ASPEN wooden logs are allowed to import into India. The qualities of Aspen sticks are very good when compared to any other wood. But we do not know why it is not allowed to import to India.  If the Aspen logs are allowed to import into our country then cutting of trees in India for Match Industry is eliminated. We face difficulties in importing logs from European countries. But, Methyl bromide is banned in European Union since 2008. The Indian Plant Quarantine Committee instructs to spray Methyl bromide over the logs from the place of origin. Failing which, we have to pay 4 times as fumigation charges. Therefore if an alternative for methyl bromide is suggested, we will be able to import logs without hurdles we require the poplar logs with bark. Without bark, the logs get hardened and unusable. Hence, importing of logs with bark must be allowed.

The Indian Government must increase the export incentive for safety matches (HS code 36050010) in order to compete with Pakistan matches which are lower in cost since they have Poplar logs found locally in Pakistan.

Difficulty in Procuring Poplar logs

The overseas buyers place orders for safety matches with Poplar splints.  We import Poplar logs and manufacture splints out of them. At present, as per Indian Government’s import policy, Poplar logs are allowed to import only from two countries – Belgium & Germany. Neighboring countries (Denmark, Netherland, France, Estonia, Lithuania and Russian Countries) are also having plenty of Poplar logs. But Our Indian Government’s import policy doesn’t allow imports from these countries. Knowing this fact, the merchants in these countries (Belgium & Germany) fix a higher price to Poplar logs. If the Indian Government allows imports from other countries as well, then Poplar logs availability will be surplus. Also the price will be favorable. In Pakistan, Poplar logs are available in surplus in their own country. Thereby, their cost of safety matches is low which attracts overseas buyers.

Safety Matches are not really a hazardous commodity. However, Port authorities and shipping lines treat them as Dangerous Cargo. These items are allowed to be loaded directly without warehousing facility. The existing procedure requires simplification so that processing of documents, stuffing and customs clearance are made easier. Classification of Safety Matches as Hazardous Cargo should be modified and this product should be treated like other cargo for smooth export flow.

Fire works

The Cracker Industry in Virudhunagar District, especially Sivakasi, 800 k.m from Chennai, which account for 80 % of the total fire cracker industry in the Country, which is estimated to the around 1050 crores.  More than 60 villages in this district are involved in the cracker making business for decades.  This industry provides for more than 1 lakh direct employment and 30 thousand in direct jobs.

Price of raw material used for making crackers have increased by 5 folds, cost of sulphur, potassium nitrate including waste paper prices have gone up.

The same old problem still exist regarding export of fireworks, both Singapore and Colombo Port do not accept fireworks from India in Transit.

During 1993 to 1996 from India 110×20’ containers of fireworks were exported to South Africa. In 1997, due to the civil unrest and NOC was refused for Indian fireworks through Colombo Port, the export came to halt. In 1998, the same problem NOC was refused for Indian fireworks through Singapore Port also. If we will get the NOC from these two Governments, it will increase the export to the tune of 2000 containers per year.

There is no facility at Chennai port for storing and shipping of hazardous cargo containers, with export consignment of sparklers, fireworks, etc., It is also very difficult to get permission for shipment of theses cargos through Chennai Port. It is therefore suggested that the Port authorities should be advised to provide exporters of the above items with suitable shipping facility at Chennai Port.

Suggestion And Opportunity For Miscellaneous Products Industry

  1. Bring the GST for matches to 12% from 18%.
  2. Increase the Drawback rate from 1.5% to 7% for matches export.
  3. Increase the FPS rates from 3% to 5%.
  4. Allow the Matches manufacturers to import Poplar and Aspen Wooden logs from any country in the world. (Presently importation is allowed only from Belgium and Germany). This will reduce the cost of production and we can nullify the competition from Pakistan and Indonesia.
  5. Fix a base rate for matches for the GST (The base rate should be Rs 325-/ per bundle contains 600 match boxes). This will reduce the corruption in the system and manufacturers will think about quality instead of quantity. This must be applied to all the products manufactured in India.
  6. Take strict action against the officials who allow the goods to pass  without e way bill or with very low base value.

Make the GST refund system for exports corrupt free.

New Product/Leading Products with Specific Details which Council would like to Export Under Miscellaneous Products Panel

  • Activated Carbon
  • Matches Safety
  • Urea
  • Inorganic Tanning Substances
  • Mineral/Chemical Fertilisers
  • Potassium Sulphate

India is the largest producer of fireworks in the world, next to China. And, Sivakasi contributes 80% of fireworks manufacturing. Exporters used to export fireworks from Sivakasi till the year 2000. Approximately they would have exported 200 to 300 containers per year at that time. From the year 1986 to 2000 the export of fireworks have seen rapid growth.

Then the Colombo port stopped issuing NOC from the year 1996. Exporters then exported through the Singapore port. At the dawn of new millennium, Singapore Port also shut its doors by not issuing the NOC.

Exporters became option less as the nearest port to our town; the Tuticorin port is the smaller port, which can hold only the feeding vessels as we are not able to operate as NOC is restricted at Colombo and Singapore.

Our Government is doing yeomen service to the industry by permitting to use machineries to manufacture fireworks accessories and helping us to make quality products. But in addition if our Government coerces the Governments of Colombo and Singapore to obtain NOC to utilize their ports for trans-shipment, it will boost the industry as we can manufacture 25 containers per day for 150 days per year. If that will be done, the export of Fireworks from India will reach 75 million US $ in 2025.

Since Indians are worldwide, if that permission is given, we can export it seamlessly to African countries, South America, United States of America and European countries. That will be done we can have the following benefits:

Benefits:

  1. Growth of the export market will bring an inflow of foreign exchange.
  2. Sivakasi as a new fireworks export city will pave way for flourishing hotel industry,  transport     industry, international tourism, construction industry, warehousing and all  allied industries.
  3. Employment for 8 lac workers additionally.
  4. Fireworks allied industry will grow and new allied product manufacturers will emerge. Some are: Paper and board Mills,    Chemicals manufacturing    factories like Potassium Nitrate, Barium nitrate, Strontium Nitrate, Aluminum powder, Dextrin, charcoal, Adhesives and Glue, Tube making Industries and Paper cone making industry
  5. Huge investments in automation will help machinery industries to grow.
  1. Indian fireworks industry will become world class and organized.
  2. More revenue for the government as many new companies will pay taxes.
  3. A successful made in India project and Sivakasi will become a model town for export.

To implement this we required the following:

  • Allotment of land for SEZ and fireworks city (fireworks industrial estate) which will have Fireworks showrooms, fireworks raw materials shops (both wholesale and retail), Fireworks exhibition center, allied small scale factories ( non-explosive).
  • Allotment of these lands at subsidized rate.
  • Allotment of 2000 acres of land (for 200 fireworks factories) with Pre approved NOC and single window licensing in and around virdhunagar district.
  • Export incentive of 10% for fireworks for the first three years.
  • Subsidy of 60% for any investment in fireworks and fireworks allied industry (as above)
  • Two year tax holiday for new factories.
  • One year repayment and interest holiday for any investment in fireworks and fireworks allied     industry (as above).
  • Low interest rate for Loans and working capitals at 6% PA for any investment in firework and     fireworks allied industry (as above)
  • Investment Subsidy and Low interest rate for Engineering sector which can produce Machinery needed for automation in fireworks.
  • In later stages Chinese rules and regulations which will help in export shall be implemented as necessary.
  • A cluster for large scale Gun Powder manufacturing and Fuse manufacturing in Chinese method.
  • Allotment of funds for Fireworks Research Institute which will do researches in new Fireworks technology, which will train and certify the   technical   staff   of    the Fireworks factory.
  • Allotment of funds for building up of Fireworks international exhibition hall, Fireworks library and fireworks raw materials testing center.
  • Supply of waste or unwanted gunpowder from the defence sector to the fireworks industry.
  • Ease of exporting from Tuticorin port to handle fireworks DG cargo.

 

Export Performance Review

Miscellaneous Products Panel has a growth of 19.4% from US$ 704.83 Million USD in 2021-22 to US$ 841.38 Million USD in 2022-23

Miscellaneous Products Panel: Top 10 Exporting Markets

USA, Nepal, Sri Lanka, Mozambique, UAE, Nigeria, Germany, China, Netherland, Korea RP.