Market Survey

garbattis, also known as

incense sticks, are made
from aromatic plants and
essential oils extracted
from plants or animal
sources. When lightened, these release a fragrant smoke which finds
use in the religious activities,
prayers, and therapeutic and aesthetic purposes. Agarbattis 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. These fragrances spread
the ambience and tranquility. The
incense sticks are packaged attractively.
The agarbatti industry depends
heavily on forest products for raw
materialsa natural advantage since
nature has bestowed upon it vast
expense of forests.
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, ITCs 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

BY: G.P. GANDHI

INDIAN AGARBATTIS
IN FOREIGN LANDS

Indias exports of agarbattis in 2005-06 shot up steeply by

21.68 per cent. USA continues to be the largest market.
brand through 5 lakh retail outlets
in the country has doubled volumes
from 50 million sticks per month to
100 million sticks now. It continues
to upgrade the manufacture of
agarbattis by villagers and smallscale manufacturers. The company
now sources all its requirements
though tie-ups with Sankranti,
Ananth and Jyanti Domestic Products (all from Bangalore), Cottage
industry of Aurobindu Ashram

(Pondicherry), Prayer Dhoop

Agarbatti (New Delhi), Swastik Industries (Chandigarh), Jayanti Products (Agartala) and Khadi and Village Indusrties Commission (mainly
Coimbatore).
ITC thus helps the small and
medium enterprises manufacturing
agarbattis continuously by improving their quality and productivity. It
has already launched brands like
Spriha and Mangaldeep along with

Market Survey
a wide range of fragrances like rose,
jasmine, bouquet, sandalwood,
mahur, sambrani and nagchampa.
Packaged quite attractively, these
brands appeal to a cross-section of
consumers at various price segments.
These agarbattis are available in fragrance locked packets. Fragrancelocking 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 companys 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
companys commitment.
ITC is also supporting an
Agarbatti Community Participation
Programme run by the Vyakti Vikas
Kendra, a non-profit organisation
funded by the renowned spiritual
guru Sri Sri Ravishankar and located
near Bangalore. Over 100 village
women are gaining from the training that this organisation imparts in
rolling agarbattis. ITC is also beginning to extend similar support to
other NGOs in other states like
Bihar, Tripura and Andhra Pradesh,
which are also setting up agarbatti
units, imparting training to village
women in rolling agarbattis.

Indias exports
Indias exports of agarbattis in
2005-06 shot up steeply by 21.68 per
cent when the same reached a level
of Rs 247.42 crore over Rs 203.33

Indias Exports of Agarbattis to Major Countries

During 2003-04 to 2005-06
(Rs crore)
Item/country

2003-04

2004-05

2005-06

USA
UAE
Malaysia
Brazil
UK
Sri Lanka
Egypt
Mauritius
South Africa
Australia
Spain
Chile
France
Italy
Djibouti
Total (all India)

33.36
13.12
9.78
12.57
8.71
5.68
4.83
4.40
4.84
4.29
4.64
5.89
6.96
9.95
2.06
227.69

25.49
12.90
7.80
11.75
7.26
5.68
5.52
4.54
5.19
4.13
3.92
3.95
5.45
9.66
2.48
203.33

35.57
16.58
10.43
10.04
9.19
8.97
7.37
6.63
6.58
6.35
5.74
5.49
5.26
4.98
4.78
247.42

Per cent growth in

2005-06 over 2004-05
39.54
28.53
33.32
() 14.55
26.58
57.92
33.51
46.04
26.78
53.75
46.43
38.99
() 3.49
() 48.45
92.74
21.68

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

crore in the previous year. USA continues to be the largest market.

There was a phenomenal growth of
39.54 per cent to this market during
the periodwith exports having
touched a figure of Rs 35.57 crore as
against Rs 25.49 crore. The other
major markets witnessing steep
growth comprised Djibouti (92.74 per
cent), Sri Lanka (57.92 per cent),
Australia (53.75 per cent), Spain
(46.43 per cent), Mauritius (46.04
per cent), Chile (38.99 per cent),
Egypt (33.51 per cent), Malaysia
(33.32 per cent), UAE (28.53 per
cent), South Africa (26.78 per cent)
and UK (26.58 per cent).
On the other hand, the markets
showing a negative growth during
the period included Italy (48.45 per
cent), Brazil (14.55 per cent) and
France (3.49 per cent).

Recent developments
ISO-9001:2000 accorded to
vendors of ITC Ltd. A recent news-

paper clipping appearing in The

Hindu Business Line states that
ITCs Mangldeep 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, have
taken their 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
vendors of ITC, manufacturing the
nationally marketed Mangaldeep
brand of agarbattis has received ISO9001:2000 quality certification for
incense sticks within 12 months of
starting full-fledged quality production.
Herbal bio-pesticide and mosquito repellant developed. The

Market Survey
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 used directly without
any mixture in the preparation of
agarbattis, dhoopbattis, lotion, spray
and floor emulsion. The government
has already chalked out a strategy to
commercialise 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.
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 Pondichery.
The companys agarbatti strategic business unit has launched three
new seriesHeritge de Pondecherry,
LAir de Pondcherry and Sveurs de
Pondicherrywith five distinctive
fragrances under each, using sandalwood powder as base. Speaking
on the occasion, V.M. Rajskharan,
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.
ITC participation in a series
of agarbatti programmes. 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 bambooa
critical input for ramping up vol-

Incense sticks spread out to dry

umes in the highly unorganised

agarbattis business. The annual consumer spend in agarbattis is Rs 1000
crore with the organised players
(numbering just 7 or 8) accounting
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.
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 banks overseas
presence to promote agarbattis with
buyers, importers and distributors
abroad. The bank will help locate
business partners for ITCs
agarbattis, identify customers for
ITC products directly or through its
associates and initiate negotiations

Hand-rolled agarbattis, essentially a cottage sector art

perfected by the tiny sector artisans at the village level,
have taken their first major step towards science-backed
quality systems in north-eastern part of India.

with them, while ITC will finalise

the deal and ensure supplies and deliveries. The Export Marketing Service offered by EXIM Bank will
supplement ITCs efforts to expand
export markets.
ITCs 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
will 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.
ITCs 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.


The author was formerly a research
officer at the Indian Institute of Foreign
Trade, New Delhi