Despite ban on Chinese fireworks and clampdown on unlicensed manufacturing and sale of crackers, domestic firecracker industry was facing a loss of about Rs 1,000 crore this Diwali, a survey said.

"Government initiatives of crack down on unlicensed fireworks manufacturers and retailers, together with ban on firecrackers imported from China has not yielded desired results for the firecracker industry," survey by apex industry body ASSOCHAM said.

The survey included fireworks manufacturers, wholesalers and retailers in Sivakasi and 10 metros.

"There are huge stocks of Chinese firecrackers lying with wholesalers and retailers who are hoarding and selling them illegally in markets across India especially in cities of Ahmedabad, Delhi-NCR, Jaipur, Lucknow and Mumbai,harming local firecracker industry," it said.

"Demand for firecrackers has waned significantly by about 35-40 per cent and the domestic industry was facing a loss of about Rs 1,000 crore largely due to illegal import of Chinese firecrackers and also as price of firecrackers have grown by about 10-15 per cent especially that of aerial repeaters and cakes," Secretary General ASSOCHAM D S Rawat said while releasing the findings.

He said that growing awareness through campaigns about adverse impact of firecrackers on health and environment in general have also impacted the industry.

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) had interacted with about 150 fireworks manufacturers in Sivakasi district of Tamil Nadu which is also known as the hub of firecracker industry in India.

Rawat said that majority of them said demand for firecrackers has declined due to poor response from dealers in northern India, illegal influx of Chinese fireworks and increase in input cost due to rupee depreciation which has increased costs of imported raw materials like aluminum powder, barium nitrate and others.

Acute labour shortage to the tune of about 20 per cent was another significant issue being faced by the firecracker industry in Sivakasi which has led to a decline in production.