Sivakasi Fireworks Industry Faces Production Pressures Amid Rising Costs and Regulatory Delays

The fireworks manufacturing hub of Sivakasi in southern Tamil Nadu faced a challenging operating environment this season, driven by a combination of rising input costs, labour shortages, unseasonal weather, and delayed regulatory clarity. According to industry sources, production has been severely dented across multiple units.

Sivakasi accounts for nearly 90 per cent of India’s total cracker production, representing an annual production value of over ₹2,000 crore. The retail market value for these goods typically reaches three to four times the manufacturing value. However, the cost of manufacturing fireworks increased by 15 to 25 per cent this year, largely due to higher prices for essential raw materials such as aluminium powder and colour-producing salts. Industry sources noted that these rising costs have forced several smaller manufacturing units to shut down over the past year.

Production operations were further disrupted by rainfall in October across key manufacturing centres, including Sivakasi and Sattur. Compounding these operational hurdles is a persistent shortage of workers, particularly migrant labourers. Many workers did not return for the season, having secured alternative employment opportunities in other sectors within their hometowns or elsewhere.

Regulatory timelines also played a critical role in the season's outcome. While the industry welcomed the Supreme Court’s September 30 interim order conditionally permitting the manufacture of next-generation joined green crackers, manufacturers reported that the ruling arrived too late to impact the current year's production significantly. Typically, by the end of September, nearly 90 per cent of seasonal production is completed and dispatched to markets. Subsequently, on October 29, 2026, a Bench comprising Justices MM Sundresh and PB Varale stated that the court was not inclined to impose a complete ban on firecrackers for Deepavali, asking the government to file an affidavit on preventive measures taken.

Amid these structural hurdles, which have persisted over the past five to six years and include regulatory uncertainty alongside input and labour pressures, some manufacturers have observed an increase in online sales. These digital channels are emerging as an additional method to reach customers outside traditional markets, though specific transaction data remains unavailable.

Industry sources characterize the current situation as a critical test for the survival of thousands of manufacturing units and hundreds of thousands of workers, as operational challenges continue to multiply annually.

"The challenges faced by the Sivakasi fireworks industry highlight the vulnerability of traditional manufacturing clusters to regulatory delays, input price volatility, and workforce retention issues. When seasonal production timelines are heavily dependent on late-stage policy clarifications, traditional manufacturing sectors suffer disproportionately. For MSMEs and manufacturing units operating in such clusters, building resilience through supply chain diversification and exploring digital channels like online retail will be vital for long-term sustainability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes