Enhanced Import Duty on Bamboo Sticks

The Government of India had recently announced that the import duty on bamboo sticks is to be increased from 10% to 25%. This is to have great impact on Agarbatti industry creating at least 1 lakh new jobs according to KVIC (Khadi and Village Industries Commission).

Background

• The decision of enhancing the import duty was taken by the Ministry of Finance to discourage heavy import and help local industries grow. 
• This has great importance as the import of bamboo sticks from Vietnam and China caused huge employment losses in India.

Steps taken

• In 2019, the Ministry of Commerce placed import of raw Agarbatti under “Restricted” category. 
• This restriction revived 100s of Agarbatti units in the states of Madhya Pradesh, Maharashtra, Gujarat and Uttar Pradesh. 
• The restriction also resulted in the increase of import of bamboo sticks from Rs 210 crores in 2018-19 to Rs 370 crores in 2019-20.

Bamboo

• India produces 14.6 million tonnes of bamboo every year. 
• Around 70,000 farmers are engaged in bamboo plantation. 
• Thus, enhancing import duty will help to boost bamboo production and also help industries that are dependent on bamboo. 
• The KVIC will also launch bamboo plantation drive to make India self-sufficient and meet growing demands of bamboo in 3 to 4 years.