With cigar lighters, mostly illegally imported from China, continuing to smother the match industry despite a ban on them, the match manufacturing units of Kovilpatti are staring at uncertain future.
The match manufacturing industry, having 700 units in Kovilpatti, Sattur in Virudhunagar district and in Tenkasi district, produce nine crore matchboxes everyday and feed two lakh workers, mostly women, directly and another 1 lakh workers indirectly. Apart from these three places, Vellore and Krishnagiri districts also house a few match manufacturing units.
When the Chinese goods started flooding the Indian market, the cigar lighters were also imported to be sold in the domestic market.
“After the body of the cigar lighters were imported from China, the fuel is filled in India to be sold in the Indian market after paying the taxes payable to the Union Government. In other words, the manufacturer will have to pay ₹9.80 per lighter as tax to the government and consequently, each lighter will cost more than ₹25 when it reaches the consumer. To avoid this, the body of the Chinese-made cigar lighters is being smuggled into India via Nepal with the connivance of the officials and hence no tax is being paid to the government. After the fuel is filled in these empty cigar lighters, the ready-to-use lighters are sent to the markets across the country to be sold illegally at ₹10 per lighter to virtually kill the domestic matches industry,” M. Paramasivam, president of National Small Match Manufacturers Association, Kovilpatti, told The Hindu on Tuesday.
Following repeated representations from the owners of matches manufacturing units of Kovilpatti, Sattur and also in Tenkasi district, the Union Government imposed ban on the cigar lighters costing ₹20 and below to save the domestic industry.
“However, the Chinese-made cigar lighters, costing ₹8 or ₹10, continue to flood the Indian market after being smuggled into India via Nepal. Even though the Central government is fully aware of the people smuggling this banned product into India, no action is taken against the smugglers as they are from Gujarat, India’s power capital. These smugglers cause a loss of over ₹12,000 crore annually to the government exchequer by tax evasion,” says Mr. Paramasivam.
He says that the pressure exerted by the manufacturers through repeated petitions forced the officials to crack whip against the smugglers on a couple of occasions in which over ₹100 crore-worth illegally imported Chinese cigar lighters were seized.
“But this action did not continue for reasons best known to the officials,” says Selvamohan, another match manufacturing unit owner from Kovilpatti.
Condemning the unhindered availability of illegally smuggled cigar lighters in Indian markets, the matches manufacturing units here have started a strike from April 13.
“Even as we are paying all taxes payable to the governments, the illegally imported cigar lighters cause huge loss to the country. And, domestic matches manufacturers, paying the taxes promptly, cannot pay the amount for the raw materials we purchase due to stagnation of matches bundles caused by illegally smuggled cigar lighters. Hence, we, in a bid to attract the Central Government’s attention, have commenced the strike. Even though we’ve decided to reopen our units on April 22, it may get extended if the Centre does not take any favourable decision on our appeal,” says Mr. Paramasivam.
