The prospects of firecracker sales this festive season hinge on the outcome of an ongoing case in the Supreme Court seeking a nationwide ban on crackers. Due to the uncertainty over the verdict, fireworks units in Sivakasi, which account for over 90% of domestic sales, have seen sluggish order intake from dealers so far.
The fireworks units fear that an unfavourable verdict would lead to a slide in sales when compared to last year. The Supreme Court had, in 2017, banned the sale of firecracker in the National Capital Region (NCR).
A slew of petitions have been filed in the Supreme Court, seeking a nationwide ban on the use, manufacture, licensing, sale, resale or distribution of firecrackers and sparklers of any kind, in a bid to tackle pollution.
Normally, fireworks firms begin receiving orders from dealers for the festive season by July-August. But P.C.A. Asaithambi, president, Tamil Nadu Fireworks and Amorces Manufacturers’ Association (Tanfama), says Deepavali orders haven’t started flowing in yet. “Everyone is awaiting the Supreme Court proceedings in the case seeking a pan-India ban on cracker sales. We are looking for a positive outcome. Orders would start flowing [in] only after we get clarity in the case,” he adds.
Mr. Asaithambi notes that draft rules concerning the setting up of new cracker shops are adding to the uncertainty, and that the Association has objected to these rules. For the second year in a row, the industry is facing huge uncertainty with regard to sales, says K. Mariappan, secretary, Tanfama. “The next hearing in the case is slated for August 14, and all depends on what happens in that case,” he adds.
Due to the shroud of uncertainty over the fireworks industry, dealers across the country have not been picking up their orders, stocks haven’t moved out of Sivakasi, and investment has stalled, he notes.
The draft rules on establishing new cracker shops are impractical, and if they come into effect, most fireworks units would go out of business, he claims.
G. Abiruben, another industry player, says orders have been sluggish due to the ongoing case. “Only when the case gets over or [when] clarity emerges, orders will pick up. If uncertainty continues, we are in for worse sales than last year,” he warns.
‘Production unaffected’
However, A.P. Selvaraj, managing partner, Kaliswari Fireworks, says there has been no impact on production. “We are taking a risk and making crackers. We are hopeful that things would ease out post the court order. We [normally] send huge consignments of crackers to Delhi and the NCR, but the last two years have affected us badly,” he says.
Industry sources say dealers in Punjab and Haryana are in a dilemma whether or not to make purchases. Punjab, Haryana, Uttar Pradesh and Delhi are among the biggest markets for crackers.
“The craze for crackers is also slowly dwindling, and people are more environment-conscious these days,” says another fireworks manufacturer.
The Sivakasi fireworks industry is pegged around ₹5,000 crore to ₹6,000 crore, according to analysts. These are ball park estimates, as there are many unorganised units that sell crackers worth over ₹2,000 crore each year.
There are over 1,100 fireworks manufacturing units in Sivakasi, of which over 250 are registered with Tanfama.
Published - August 13, 2018 12:23 am IST
