The government said that increase in customs duty is taken to encourage the use of domestic bamboo for Atma Nirbhar Bharat.

Agarbatti makers will now have to pay 2.5 times customs duty to import bamboos used in manufacturing agarbatti. In a major move towards making India a self-reliant nation, the Narendra Modi-led government today raised customs duty on bamboo imports from 10 per cent to 25 per cent with immediate effect. The government said that the step is taken to encourage the use of domestic bamboo for Atma Nirbhar Bharat, according to a tweet by the Central Board of Indirect Taxes. The 25 per cent customs duty rate will now apply uniformly on all kinds of bamboo imports, including those by traders. 

The government also underlined that the uniform rate will help in avoiding misuse and rates related disputes. Indicating the benefits of farmers from this move, the tweet said that MSME agarbatti manufacturers will become more competitive now as earlier only the large agarbatti manufacturers were able to import bamboo at a lower rate.

India’s centuries-old agarbatti industry, with over three thousand manufacturers and employing lakhs of informal workers, lost its pace amid coronavirus-led lockdown. Now, the steep rise in the raw material cost may further increase the industry’s pain, at least for some time. 

While many countries are gradually moving towards protectionist policies to become self-sustainable, IMF Chief Economist Gita Gopinath said the perks of globalisation cannot be ignored. She added that firms rely on global production to get the cheapest inputs and if that is not available to them, they can’t bring back workers onto their factories, which will worsen the crisis led by coronavirus. 

Meanwhile, India’s agarbattis are exported to about 160 countries and employ around 4 lakh people.  In the year 2018 – 2019, annual sales of agarbattis were to the tune of around Rs 750 crores.