With the ban on gutkha coming into force only in April next year, the Rs. 2,000 crore-strong gutkha industry here is likely to use the six-month breather to either switch to making 'saada' pan masala or relocating to Nepal.
As many as 21 gutkha-makers from the city, the hub of the trade in the country, are set to move to the Himalayan nation because they are unwilling to abandon their brands, insiders say. "More than the domestic market, they are eyeing the markets of Bangladesh, Pakistan and the Arab countries where the gutkha consumption is significant," the insiders add. "It has taken them years to build their brands and they don't want these to fade from public memory," they explain.
Four lakh people are associated with the trade directly and another five lakh indirectly. Also, 45,000 merchants of perfumes and related products in Kannauj, Rampur, Moradabad and the southern states are entirely dependent on this trade as are six lakh betel nut growers. "Kanpur produces 12 top brands and 170 small brands of gutkha, employing about a lakh people directly," says a manufacturer who is unwilling to be named.
"If we had to wrap up the business overnight, as many had to do in some other states, the industry would have bled in UP," he adds. SK Paliwal, patron of Indian Industries Association (IIA), praises chief minister Akhilesh Yadav for his decision to give six months to the industry to mull its alternatives.
"He has saved the industry and the employees," he says. Not everybody is moving out though. Those keen on staying on will fall back on the combo-packs of 'saada' pan masala and tobacco. "The government can fix certain parameters to chuck out harmful substances. Such a measure will hike the cost of pan masala and ensure good quality. The high price will make people consume less and address health concerns," says another insider. Rajeev Kaya, director of Tiranga pan masala, says the raw material is likely to become costlier by 10% to 15%.
However, Anil Gupta, former president of the Indian Industries Association, says, "I am against gutka and the ban is a good step on the whole. But, as an entrepreneur one would say that it is the wrong thing to do. First, you allow it and let it flourish. Then, one fine day you take the decision to close down the industry. It's a big setback for entrepreneurs. There should be an exit plan for them as most of them have taken loans."