Bengaluru: The prices of diethyl phthalate (DEP), a chemical derivative of crude oil primarily imported from Iran, have witnessed a sharp increase from Rs 100 per kg in January to Rs 180 per kg currently. DEP serves as a crucial solvent and fixative in perfumes and agarbattis, ensuring that fragrance oils dissolve properly and retain their aroma for extended periods. Manufacturers have reported that this price surge has directly affected both the perfume and incense stick industries.
Rising Costs Across the Board
Apart from DEP, the cost of bamboo sticks, charcoal powder, plastic caps, and joss powder has also risen significantly. Industry representatives have noted that lamination and packaging expenses have nearly doubled, compelling many companies to explore alternatives such as TEC, benzoyl compounds, and paper-based packaging solutions. Overall production costs in the sector have escalated by 20% to 30%, prompting some manufacturers to increase retail prices by 10% to 15%, while others have reduced the quantity of product in perfume bottles.
Speaking at the 12th International Agarbatti and Perfume Expo 2026, organized by Incense Media, industry players attributed the raw material price hikes—averaging 20% to 30%—to the ongoing Iran-US conflict. Praveen Goyal, head of operations at Incense Media, stated: "With around 1,000 agarbatti and perfume industries located in the state, the industry is under pressure as raw material costs, including fragrances, wood powder, charcoal, and packaging materials, have risen by 20% to 30% in the last three to four months, forcing some manufacturers to increase prices by 10% to 15%. The prices of raw materials have gone up because of the Iran-US conflict affecting the industry."
Impact on Premium Products
Yash H Buddhdev, director of JP Perfumery Works, elaborated: "Good-quality odourless wood powder imported mainly from Vietnam, used in premium incense sticks, has become expensive due to higher duties, container shortages, and global disruptions. Prices of binder materials, fixatives, and several chemicals have increased by 20% to 40% in recent months. Despite that, we have limited our hike to 5% to 10% as we do not want customers to bear the entire burden. We expect costs to stabilise in the next three to four months."
Exploring Alternatives
Surendra Sipani, head of finance at ITC Ltd, mentioned: "We are exploring alternate solutions, different chemicals like TEC, to see if we can come out stronger with an alternate formulation. As for the war, we do not know how long it will continue. If we all work together towards alternate solutions—not just in fragrance but also in laminate, which has doubled in price, and shift towards paper packaging—we can find a way through."
Dipen K Haria, managing partner of Balaji Agarbatti Company from Prakshnagar, commented: "From bamboo sticks to powder, perfume, packaging, plastic caps, and shrink wraps—logistics plays a major role in every single element of this industry, nothing has been left out. The only way to come out of this is without affecting the quality of the product. Rather than reducing quantity, we must hold the line on quality at every point. Price increases are inevitable, but the challenge is that many people will not adhere to them. The real answer lies in reducing costs smartly, educating the customer on value, and maintaining healthy competition."
New Trend: Coffee Fragrance
Dipen Haria also noted emerging consumer trends: "Gen Z in particular tends to experiment more, often spending time at the start of the month and trying multiple products and fragrances. Because of this evolving demand, the industry is also innovating with new offerings such as coffee-based fragrances in incense and sprays, along with fruity notes like orange and pineapple."
Hardil H from JP Perfumery added: "Consumers today are experimenting with fragrances based on their mood and personality. While some prefer floral and sweet notes for peace and calmness, others choose woody or earthy fragrances depending on the aura they connect with. Younger consumers are exploring multiple products and fragrance families, including fruity notes."
The industry remains optimistic about finding sustainable solutions through innovation and collaboration, despite the challenges posed by geopolitical tensions and rising input costs.
