Key facts
| Figure | What it measures |
|---|---|
| ~85% | of India’s organised fireworks trade is made around Sivakasi4 |
| ~₹7,000 cr | yearly fireworks turnover, by a 2026 state estimate4 |
| 1,070+ | licensed fireworks units in the cluster4 |
| ~800 + ~320 | units licensed by PESO (larger) and by the district (smaller)5 |
| ~3 lakh | people employed directly; about five lakh families depend on the trade4 |
| ~80% | of sales come from the Diwali market; Vishu and Ganesh Chaturthi about 10% each4 |
| ₹6,000 → ₹7,000 cr | Diwali cracker sales, 2024 to 2025, by the traders’ federation6 |
| 18% | GST on fireworks (HSN 3604), cut from 28% in 20174 |
| 5% | GST on safety matches since 22 September 2025, down from 12%7 |
| 30% | cut in particulate emissions a certified green cracker must show8 |
| 134 | workers killed in cracker-unit accidents since 2022, by National Green Tribunal data5 |
| ~4.5 crore | calendars printed a year by about 100 calendar units9 |
How it began
One chemistry, three trades
Sivakasi gets little rain and its soil is poor, but that dry weather suits anything that has to stay dry. Matches came first, in 1923, made by hand in homes and small sheds. Fireworks use much of the same chemistry, so from the 1930s many match units added a fireworks section. Every box needed a printed label, and when the town started printing its own, a third trade was born.
In the mid-1960s the match units ran short of red phosphorus. A steady local supply from 1971 brought the industry back, and the three trades have leaned on each other ever since: the same families, the same paper and board, the same dealers.
A new formula, set by the courts
Delhi’s winter smog put fireworks before the Supreme Court. From 2018 only green crackers, with at least 30% less particulate emission, could be made, and barium nitrate was barred. Units stayed shut for long spells while government scientists at CSIR-NEERI worked out the new formulas and trained makers to use them.
Each green product is now registered with NEERI and carries a QR code. In September 2025 the court let certified makers produce green crackers even in Delhi-NCR, and in October 2025 it allowed their sale there on set days. That year the traders put Diwali sales at about ₹7,000 crore, up from ₹6,000 crore.
A year’s work, sold in six weeks
Today more than 1,070 licensed units employ about three lakh people directly. About 80% of what they make is sold for Diwali, and Vishu and Ganesh Chaturthi take about a tenth each. This year Diwali orders were slightly up, but October rain stopped many factories for nearly a week at the busiest time.
The same season carries a heavy cost. In April 2026 an explosion near Kattanarpatti killed 25 workers, and the National Green Tribunal is pressing the district to act against units that break the safety rules. Safe spacing, trained hands and honest licensing are the price of staying in this trade.
How the business works here
A cracker unit is a cluster of small sheds spread across open land, each holding only a little material, so that a fire in one does not reach the next. Mixing chemicals, filling, rolling paper tubes, fixing fuses, drying in the sun and packing each happen in their own place. Most work is done by hand and paid by the piece, and women are a large share of the workforce.5
Two licences decide what a unit may make. Larger units are licensed by PESO, the national explosives regulator, under the Explosives Rules, 2008; smaller ones by the district. A green cracker also needs product-wise registration with CSIR-NEERI, and its box carries the NEERI logo and a QR code that a buyer can check.4
The year runs backwards from Diwali. Units make and stock goods for most of the year, dealers from other states book orders from midsummer, and money comes in mostly in the last weeks. Matches run all year and sell mainly to Africa and inside India. Printing runs on its own calendar: diaries and calendars are printed from mid-year for January.4
Under pressure now
Safety. In April 2026 an explosion at a unit near Kattanarpatti killed 25 workers. National Green Tribunal data counts at least 134 deaths in cracker units since 2022, most in PESO-licensed units, and the Tribunal has asked the district to shut units that break the rules. Officials link many accidents to units that are sublet to others, overloaded or run with untrained hands in the peak season.5
The courts and the air. Since 2018 only reduced-emission green crackers may be made, and barium nitrate is barred. On 26 September 2025 the Supreme Court let certified makers produce green crackers in Delhi-NCR, and in October 2025 it allowed their sale there for set days around Diwali. Each such order moves orders in Sivakasi within weeks.10
Weather and the calendar. Crackers dry in the sun, so rain stops work. In October 2026 rain halted many factories for nearly a week, hurting about 20% of production at the busiest time. Because so much is sold in one season, a late or cancelled order leaves a year’s work as unsold stock.4
Print in a digital age. About 100 calendar units still print around 4.5 crore daily and monthly calendars a year, and output rose about 5% for 2026 on early orders before the Assembly elections. But paper costs and the GST on paper keep margins thin, and the industry has asked for one uniform GST rate on paper.9
A costing note
A season business has to cost the whole year. Wages, power, rent, licence fees and interest run for eleven months; most of the cash comes in six weeks. Cost each product on the full year’s overheads spread over a normal year’s output, not just the busy months, and plan the working-capital gap month by month: stock built from March is paid for long before a dealer pays in October.4
Stock can lose its value overnight. When a court or a regulator bars a chemical or a type of cracker, goods made to the old formula may no longer be sellable. Value closing stock at the lower of cost and what it will really fetch, and write down what cannot be sold, rather than carrying it at cost into a bank’s stock statement.
Watch the GST gap on each product. Crackers sell at 18%, the same as most chemicals and paper, so credit usually balances. Matches now sell at 5% while many inputs carry 18%, so credit can pile up; the refund of that excess under the inverted-duty rule must be claimed. School notebooks are nil-rated, and a nil-rated sale earns no input credit at all, so for a notebook printer the GST on paper becomes part of the cost.7