The process of granting temporary licences for firecracker shops ahead of Diwali has begun across Tamil Nadu, even as reduced production and rising raw material costs have pushed up the cost of firecrackers by up to 15 per cent, manufacturers and traders said.
More than 1,100 licensed firecracker factories are operating in the Sivakasi region. Due to restrictions, including the ban on barium nitrate and linked crackers, only around 60 per cent of the varieties are currently being produced.
Despite lower production over the past two years, Diwali firecracker sales reached around Rs. 6,000 crore, aided by higher prices. Virudhunagar district is the only district in Tamil Nadu where licences are issued for permanent firecracker shops operating throughout the year.
The process of issuing temporary licences for Diwali firecracker shops across Tamil Nadu has now commenced. Traders from other districts and large companies have been placing orders in Sivakasi for gift-box varieties to distribute to employees and customers.
Manufacturers and retailers said production remained low in May, June, July and August, creating difficulties in supplying existing orders. With manufacturing costs rising by up to 15 per cent and transportation expenses also increasing, retail prices could rise by 20 to 25 per cent.
They also warned that despite the price rise, popular fancy crackers could face shortages as Diwali approaches.
