Ease of Doing Business for MSMEs: Khadi and Village Industries Commission (KVIC) Chairman Vinai Kumar Saxena has written to Commerce and Industries Minister Piyush Goyal seeking to lift the export restriction on bamboo charcoal for “optimum utilization of raw bamboo and higher profitability in the bamboo industry,” MSME Ministry said on Sunday. “One of the biggest challenges that the Indian bamboo industry faces today is the extremely high input cost owing to inadequate utilization of bamboo. However, export of bamboo charcoal would ensure complete utilization of the bamboo waste and thus make the bamboo business more profitable,” the ministry said. Bamboo charcoal is made by burning bamboo at a specified temperature in a low oxygen environment.

Bamboo is largely used in making Agarbattis wherein, up to 16 per cent, which is the upper layers of the bamboo, is used for manufacturing while the remaining 84 per cent of bamboo goes into waste. However, the waste generated in Agarbatti and bamboo craft industries is not utilised commercially, the ministry said. Consequently, the bamboo input cost for round Bamboo sticks ends up in the range of Rs 25,000 to Rs 40,000 per metric ton (MT) as against the average Bamboo cost of Rs 4,000 to Rs 5,000 per MT.  

In comparison, the bamboo price in China is Rs 8,000 to Rs 10,000 per MT but their input cost is Rs 12,000 to Rs 15,000 per MT owing to 100 per cent waste utilization, it added. Saxena said the bamboo waste can be best utilized by making bamboo charcoal which has a high demand overseas even as it has very limited use in India. However, the Indian bamboo industry is not able to tap the opportunity due to its export prohibition, Saxena said.

Subscribe to Financial Express SME newsletter now: Your weekly dose of news, views, and updates from the world of micro, small, and medium enterprises 

Importantly, the government had amended the export policy for bamboo products under the HS code 141100 back in 2017, wherein exports of all the bamboo products were kept in the Open General License (OGL) category and were free to exports, the ministry added. However, exports of bamboo charcoal, bamboo pulp and unprocessed shoots were put under the prohibited category. 

Saxena said lifting the restrictions would not only enable the industry to exploit huge global demand but also enhance the profitability of existing MSME KVIC units by proper utilisation of bamboo waste and thus contribute to the PM’s vision of Waste to Wealth. 

According to the MSME Ministry, the world’s import demand of bamboo charcoal has been around $1.5 to 2 billion and has been growing at 6 per cent in recent years. Bamboo charcoal for Barbeque sells for about Rs 21,000 to Rs 25,000 per ton in the international market. it is also used for soil nutrition and as a raw material for manufacturing activated charcoal. “Rising import demand is witnessed in countries like USA, Japan, Korea, Belgium, Germany, Italy, France and UK at negligible import duty,” the ministry added.