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Export Prospects of
Agarbattis
from India

“A
garbattis” also known
as “Incense Sticks” are
made from aromatic
plants and essential oils extracted
from plants or animal sources. When
lightened, they release fragrant smoke
which is used in religious activities,
prayers, therapeutic and aesthetic purposes. These have been used since times
immemorial as an integral part of Hindu deity worship In India.

There are about 10,000 agarbatti manufacturing units in the country including tiny,
small and medium, besides another 200 well-established ones having over 50
branded agarbattis. Nearly 12 lakh people are directly or indirectly employed by the
industry.

India is exporting a wide range of agarbattis or incense sticks that have natural,
exotic fragrances extracted from jasmine, sandalwood (chandan) and rose. The
incense sticks are packed in attractive packaging.

The agarbatti industry depends heavily on forest products for raw materials—a
natural advantage since nature has bestowed upon it vast expense of forests.
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Capexcil (formerly known as Basic Chemicals, Pharmaceuticals and Cosmetics

Export Promotion Council) functioning under the aegis of Ministry of Commerce and
industry, Government of India over the years has been playing an important role in
promoting exports of agarbattis from the country.

Besides, ITC’s incense sticks

business launched as part of its
strategic initiative to create multiple
drivers of growth in fast moving
consumer goods sector (FMCG),
leverages the core strengths of the
company in marketing and
distribution, brand building, supply
chain management and paperboard
and packaging to offer Indian
consumers high quality agarbattis.

The company marketing agarbattis

under the “Mangaldeep” brand
through 5 lakh retail outlets in the
country has doubled volumes from 50
million sticks per month to 100 million
sticks now. The company continues to upgrade the manufacture of agarbattis by
villagers and small scale manufacturers. The company now sources all its
requirements though tie-ups with Sankranti, Ananth and Jayanti Domestic Products
(all from Bangalore), Cottage industry of Aurobindo Ashram, Pondicherry, Prayer
Dhoop Agarbatti (New Delhi), Swastik Industries (Chandigarh), Jayanti Products
(Agartala) and Khadi and Village Industries Commission (KVIC) mainly Coimbatore.

ITC thus helps the small and medium enterprises manufacturing agarbattis,
continuously by improving their quality and productivity.

The company has already launched brands like “Spriha’ and “Mangaldeep’ along
with wide range of a range of fragrances like rose, jasmine, bouquet, sandalwood,
mahur, sambrani and nagchampa.
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Packaged quite attractively, these brands appeal to a cross section of consumers at

various price segments. These agarbattis are available in ‘fragrance locked packets’,
Fragrance-locking’ is a unique concept of packaging which helps to retain the
fragrance for a longer period.

Through its participation in the business, ITC aims to enhance the competitiveness of
the small and medium-scale sectors through its complementary R&D based product
development and distribution.

In pursuance of its abiding social commitment, the company continues to partner with
small and medium enterprises to help them raise their quality and process standards.
Six agarbatti manufacturing units have received ISO 9001-2000 certification aided by
the company’s process and technical inputs. The business continues its collaboration
with various NGOs in Bihar, Karnataka, Pondicherry and Tamil Nadu to provide
vocational opportunities to rural youth and economically disadvantaged women in
keeping with the company’s commitment.

ITC is also supporting an “Agarbatti Community Participation Programme” run by the

Vyakti Vikas Kendra, a non-profit organization funded by the renowned spiritual guru
Sri Ravishankar and located near Bangalore. Over 100 village women are gaining
from the training that this organization imparts in rolling agarbattis. ITC is also
beginning to extend similar support to other NGOs in other states like Bihar, Tripura
and Andhra Pradesh, who are also setting up agarbatti units, imparting training to
village women in rolling agarbattis.

India’s exports of Agarbattis to major countries

India’s exports of agarbattis in 2005-06, as may be seen from the table, shot up
steeply by 21.68 per cent when the same reached a level of Rs. 247.42 crore over
Rs. 203.33 crore in the previous year. Country-wise export trends reveal that USA
continues to be the largest market. There was a phenomenal growth of 39.54 to this
market during the period----exports having touched a figure of Rs. 35.57 crore as
against Rs. 25.49 crore. The other major markets witnessing steep growth during the
period comprised: Djibouti (92.74%), Sri Lanka (57.92%), Australia (53.75%), Spain
(46.43%), Mauritius (46.04%), Chile (38.99%), Egypt (33.51%), Malaysia (33.32%),
UAE (28.53%), South Africa (26.78%), and UK (26.58%).
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On the other, the markets showing a negative growth during the period include: Italy
(48.45%), Brazil (14.55%), and France (3.49%).

Table 1

INDIA’S EXPORTS OF AGARBATTIS TO MAJOR COUNTRIES DURING THE

PERIOD 2003-04 AND 2005-06
(Rs. crore)
HS Code Item/country 2003-04 2004-05 2005-06 %growth in
2005-06 over
2004-05
33074100 USA 33.36 25.49 35.57 39.54
UAE 13.12 12.90 16.58 28.53
Malaysia 9.78 7.80 10.43 33.32
Brazil 12.57 11.75 10.04 (-)14.55
UK 8.71 7.26 9.19 26.58
Sri Lanka 5.68 5.68 8.97 57.92
Egypt 4.83 5.52 7.37 33.51
Mauritius 4.40 4.54 6.63 46.04
South Africa 4.84 5.19 6.58 26.78
Australia 4.29 4.13 6.35 53.75
Spain 4.64 3.92 5.74 46.43
Chile 5.89 3.95 5.49 38.99
France 6.96 5.45 5.26 (-)3.49
Italy 9.95 9.66 4.98 (-)48.45
Djibouti 2.06 2.48 4.78 92.74
TOTAL (ALL 227.69 203.33 247.42 21.68
INDIA)

Source: Compiled from the data of DGCI&S, “Monthly Statistics of Foreign Trade of
India”, Volume I: Exports & Re-Exports, March 2004, 2005 and 2006 issues, Kolkata.
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Recent Developments

(i) ISO-9001:2000 accorded to the vendors of ITC Ltd. A recent newspaper

clipping stated that ITC “Mangaldeep” brand of agarbattis is being marketed all over
the country through its wide network being operated by the cottage and small scale
units from Tripura, Bangalore, Coimbatore, Pondicherry and New Delhi.

Further, it says that hand-rolled agarbattis, essentially a cottage sector art perfected
by the tiny sector artisans at the village level has taken its first major step towards
science-backed quality systems in north-eastern part of India. The Agartala-based
Jayanti Domestic Products, one of the seven agarbatti venders of ITC, manufacturing
the nationally marketed “Mangaldeep” brand of agarbatti has received ISO-
9001:2000 quality certification for incense sticks within 12 months of starting full-
fledged quality production.

(ii) Herbal bio-pesticide and mosquito repellant developed. The Central Institute
of Medicinal and Aromatic Plants, Lucknow, has developed a herbal formulation for
repelling mosquitoes and providing fragrance at the same time. The formulation can
be directly used without any mixture in the preparation of agarbattis, dhoopbattis,
lotion, spray and floor emulsion. The Government has already chalked out a strategy
to commercialize these products for mass production and consumption. The know-
how for making herbal agarbattis has already been transferred to three entrepreneurs
for large scale production (http://pib.nic.in).

(iii) ITC launches agarbatti range in Europe. ITC Ltd has opened up effective
fragrance trail all the way from Pondicherry to Paris (France) to launch a new range
of handcrafted agarbattis (packets of 20s and 10s) in Europe under the brand name
“Encens de Pondicherry”. The company’s agarbatti strategic business unit has
launched three new series—“Heritage de Pondicherry”, “L’Air de Pondicherry” and
Sveurs de Pondicherry—with five distinctive fragrances under each, using
sandalwood powder as base. Speaking on the occasion, Mr. V.M. Rajsekharan,
CEO of ITC Agarbattis said that the incense sticks were a blend of natural
ingredients and fragrances. ITC agarbattis foray into Europe will cover France,
Spain, Italy, the UK and Germany.
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(iv) ITC participation in a series of Agarbatti programme. ITC Ltd SBU (Strategic
Business Unit) sourcing agarbattis from the cottage sector has started working with
Andhra Pradesh Forest Department on a quality improvement programme for hand-
cut bamboo, a critical input for ramping up volumes in the highly unorganized
agarbatti business. The annual consumer spend in agarbattis is Rs. 1,000 crore with
the organized players (numbering just 7 or 8) account for 25 per cent share.

ITC is also participating in Bamboo Development Programme launched by Tripura

Government and has also launched Vendor Development Programme in Agartala
under which some 10 million sticks are being sourced per month.

(v) ITC signs up with Exim Bank for promotion of agarbattis in the overseas
markets.
ITC has recently signed up with Exim Bank for providing export marketing services to
leverage the Bank’s overseas presence to promote agarbattis with buyers, importers
and distributors abroad. The Bank will: (a) Help locate business partners for ITC’s
agarbattis (ii) ldentify customers for ITC products directly or through its associates
and initiate negotiations with them while ITC will finalise the deal and ensure supplies
and deliveries. The Export Marketing Service offered by Exim Bank will supplement
ITC’s efforts to expand export markets.

ITC Ltd. partnership with Exim Bank will help make quality agarbattis available to
consumers in other parts of the world. In the process, the cottage and small sectors
which make the agarbattis for ITC be greatly benefited. Exim Bank believes that rural
enterprises can make a mark in international markets with proper guidance and
support provided by corporations and institutions.

(vi) ITC Alliance with KVIC. The KVIC-ITC “Mangaldeep” agarbatti project is a good
beginning for developing linkages with the cottage sector under the Rural
Employment Guarantee Programme of the Union Government. The company has
identified Awarampalayam Sarvodya Sang in Coimbatore as the nodal agency to
supply and monitor the agarbatti manufacturing activities of other identified: Directly
Aided Institutions and small REGP units of KVIC which supply to KVIC.

# G.P. Gandhi
Formerly with the Indian Institute of Foreign Trade, New Delhi