Presented by:Birkaran SinghRamita PaprejaShweta ChadhaJyotika Singh 1

Overview Production Centers Domestic Industry Trends in Export Major Export Destinations Major Competitors in the global market Provisions in India’s Foreign Trade Policy Quality Standards Any other relevant Information

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Definition according to Govt. of India: Handicraft can be defined, which is made by hand; should

have some artistic value; they may or may not have functional utility.

The Importance of Handicrafts: Cultural & economic India’s rich cultural diversity and heritage provides a

unique and huge resource for developing craft products.

The Indian Handicraft Industry is showing continuous growth rate of 20% every year.

Handicrafts industry is one of the important segment of decentralized sector in India.

Major parts of industry operates in rural and semi urban areas throughout the country and has potential Indian and International market with around 67000 exporters to tap the market.

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According to the national census of handicrafts, undertaken by the National Council for Applied Economic Research the value of handicrafts produced last year were of Rs.26,213 Crore.

This Industry provides huge employment opportunities to artisans that include women and people belonging to backward and weaker society. This is one of the major source of income there.

The Handicraft Industry is a $100 billion industry worldwide.

India’s contribution in world market is 1.2%

The total exports of handicraft items: - USD 1830 million

Industry’s share in India's exports:- 1.51 %

Source: indian handicraft facts, http://www.india-crafts.com/business-reports/indian-handicraft-industry/key-facts.htm

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In spite of having diversified products, some part of Indian market are still untapped and market is price sensitive.

Products are high priced in big and metro cities, which are beyond, reach of people belonging middle and lower middle class.

Craft producers have to compete on price, quality and delivery for different segments.

There is poor promotion for craft products in national market.

There is lack of awareness about new traditions and among craftsmen and there is need of technological support and training.

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Handicrafts industry comprises diversified products portfolio and there is large variety available in market. Handicrafts products can be distinguished into following:

Metal ware, Wood ware, Hand printed textiles, Embroidered and crocheted goods, Shawls, Carpets, Bamboo products, Zari goods, Imitation jewellery, Paintings, Earthenware, Jute products, Marble Sculpture, Bronze Sculpture, Leather Products and other miscellaneous handicrafts.

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7Source: map of india

Handicraft industry in India is spread throughout the country with greater concentration in rural and suburban areas of country.

Metal ware and Bronze sculpture: Major Manufacturing units are located in Moradabad, Sambhal,

Aligarh, Jodhpur, Jaipur, Delhi, Thanjavur, Jagadhari etc.

Wooden artware and sculpture:Major Manufacturing units are located in Sharanpur, Nagina,

Hoshiarpur, Srinagar, Amritsar, Jaipur, Jodhpur, Bangalore, Mysore, Behrampur etc.

Embroidered item:Manufacturing Units are located in Kutch, Jaisalmer, Baroda, Lucknow,

Jodhpur, Agra, Amritsar, Kullu and Srinagar.8

Marble and soft stones crafts:Agra, Madras, Bastar and Jodhpur are famous for these craft

products.

Paper Crafts:These manufacturing units are located in places of Kashmir and

Jaipur. Terracotta units are located in state of Madhya Pradesh, Rajasthan, and Bastar.

Hand printed textiles and scarves:Amroha, Jodhpur, Jaipur, Farrukhabad, Bagru and Sanganer

consist of manufacturing units. Zari and zari products are manufactured at units located at Surat, Agra, Varanasi and Amritsar.

Imitation Jewelery:Parts of Delhi, Moradabad, Sambhal, Jaipur and Kohima consist of

manufacturing units for these jewelry products.

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Its role in Rural Indian Economy is very important.

The Ministry of Rural Development and the Ministry of Rural Economy are the governing authorities, which drafts and implements policies for the handicraft industries in rural India economy.

With liberal trade and export policy, the export of the Indian handicrafts industry is on an all time high.

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The main products that are manufactured here are: Art metal wares Wood wares Hand printed & textiles & scarves Embroidered & crocheted goods Shawls as art wares Zari and zari goods Imitation jewelry Miscellaneous handicrafts

Source: map of india, http://business.mapsofindia.com/rural-economy/handicraft-industries/

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Source: export promotion council of handicrafts12

Handicraft Industry has evolved as one of the major contributors for Export and foreign earnings:-

Exports of handicrafts including hand knitted carpets during 2009-10 were USD 1830 million

Export items- Art Metal wares, Wood wares, Hand printed textiles, Embroidered and Crocheted goods, Shawls as art wares, Zari goods, Imitation jewelry, Carpets, Leather products, Jute products, Paintings, Bamboo products, Earthen ware, Marble Sculpture, Bronze Sculpture etc.

India's major export markets are USA, Germany, UK, France and Japan, Saudi Arabia, Canada, and Italy etc.

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Rs. In croresInc./Dec. in % over 2008-09

US $ in millionsInc./Dec. in % over 2008-09S. NO COUNTRY 2008-09 2009-10 2008-09 2009-10

1. Australia 108.01 117.30 (+) 8.60 23.73 24.62 (+)3.75

2 Canada 234.25 248.13 (+) 5.93 51.47 52.09 (+) 1.21

3 France 361.54 386.60 (+) 6.93 79.43 81.15 (+) 2.17

4 Germany 744.48 782.57 (+) 5.12 163.57 164.27 (+) 0.43

5 Italy 270.23 294.58(+) 9.01

59.37 61.84 (+) 4.16

6 Japan 187.33 201.65 (+) 7.64 41.16 42.33 (+) 2.84

7 nether land 231.77 248.70 (+) 7.30 50.92 52.21 (+) 2.53

8 UAE 478.40 517.99 (+) 8.28 105.11 108.73 (+) 3.44

9 Switzerland 111.79 121.26 (+) 8.47 24.56 25.46 (+) 3.66

10 U.S 2255.75 2489.19 (+) 10.35 495.6 522.52 (+) 5.86

11 U.K 863.11 928.06 (+) 7.53 189.63 194.81 (+) 2.73

12 LAC 132.53 144.56 (+) 9.08 29.12 30.34 (+) 5.63

13Other countries

2203.93 2238.35(+) 1.56 484.21

469.86 (+) 2.96

total 8183.12 8718.94 (+) 6.55 1797.88 1830.23 (+) 1.80

14source – Export Promotion Council for Handicrafts

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ITEMS

` IN CR.

INCREASE/DECREASEIN % OVER2008-09

US$ IN MILLIONS

INCREASE/DECREASEIN % OVER2008-09

2008-09 2009-10 2008-09 2009-10

(April-March) (April- March)

      45.5155 47.6386  

ARTMETAL WARES 1790.27 1877.64 (+) 4.88 393.33 394.14 (+) 0.21

WOODWARES 622.78 717.24 (+) 15.17 136.83 150.56 (+) 10.01

HANDPRINTED TEXTILES & SCARAVES 1116.86 1173.38 (+) 5.06 245.38 246.31 (+) 0.38

EMBROIDERED & CROCHETTED GOODS 2936.98 3116.85 (+) 06.12 645.27 654.27 (+) 1.39

SHAWLS AS ARTWARES 119.07 131.74 (+) 10.64 26.16 27.66 (+) 5.73

ZARI & ZARI GOODS 175.13 184.96 (+) 05.61 38.48 38.83 (+) 0.91

IMMITATION JEWELLERY 208.28 245.83 (+) 18.03 45.76 51.6 (+) 12.76

MISC. HANDICRAFTS 1213.75 1271.3 (+) 04.74 266.67 266.86 (+) 0.07

TOTAL 8183.12 8718.94 (+) 6.55 1797.88 1830.23 (+) 1.80

SOURCE:epch,http://www.epch.in/moreDetails.htm

The global handicrafts industry accounts for a market share of 100 billion. This industry plays a dominant role in the economic development of the rural mass of every country and earns substantial foreign exchange.

1.ChinaChina holds a dominant position as an exporter in the global home accessory market. China produced an estimated 70% of all home accessory products sold in the United States (2005)Because of China’s enormous production capacity and low labor costs, producers from other countries can rarely compete on price and volume. State-of-the-art equipment and rising productivity allow Chinese producers to deliver large product quantities quickly, on time, and at low prices.

2. Vietnam : in particular is emerging as an alternative to China. pricing is comparable, labor is skilled and hardworking, quality and delivery are good, and producers have low minimum order requirements.Its home accessories industry is enjoying government support and benefiting from investments in infrastructure and transportation. In 2004, Vietnam exported $300 million in handicrafts to the United States, an amount which grew to $1.5 billion within five years.

3. Other emerging Asian producers—Indonesia, Thailand, Cambodia, and Philippinesach offer compelling products and skill sets, but overall are less competitive than China, India, and Vietnam.Buyers affirm that while these countries have much to offer, prices tend to be comparatively high and many items can be made more cheaply in either China or Vietnam

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4. Several African producers—Ghana, South Africa, Mozambique, Malawi, Kenya, and Tanzania—offer a number of successful handicraft products on the world market. In the opinion of market experts, South Africa and Ghana have the highest export capacity and most competitive designs and quality. Their success is based on consistent delivery and the ability to sustain sales based on established relationships.

5. In Latin America, Peru, Mexico, Colombia, Honduras, Guatemala, Bolivia, and El Salvador arethe main exporters of handicrafts. Market experts identify Mexico, Peru, Columbia, Honduras, andGuatemala as countries with particularly strong export capacity based on the number of exporters able to handle large order volumes in their own facilities or through subcontracting to smaller producers.Mexico and Peru are considered the leaders in product quality and richness of design. Guatemala also has excellent designs, but prices tend to be less competitive. Buyers single out Peru as beingespecially responsive to market demands, citing the availability of skilled agents and exporters,artisans experienced in exporting to the United States, relatively stable and competitive prices, theability to deliver products on time, good quality control, a willingness to make changes according tobuyer requests, thorough packing and labeling, good communication skills, and the capacity toproduce items in large quantities. In 2005, Peru’s handicraft exports were estimated at $40 millionto markets including the United States (39 %) and Ecuador (11 %)

Source: global market assessment for handicrafts,, USAID, www.microlinks.org/.../Global_Market_Assessment_for_Handicrafts.pdf?..

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All handicrafts exports at present entitled to 5% duty credit scrip on exports under Focus Product Scheme shall be entitled to additional benefit of 2% of bonus over and above the existing benefit of 5% .

Drawback rate reduced from 15% to 11%. Four handicrafts clusters provided status

of ‘Towns of Export Excellence’(TEE)- Jaipur, Srinagar Barmer & Anantnag.

EPCG at zero custom duty for Technological Upgradation.

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Status holder to get duty credit scrip.To accelerate exports and encourage technological Up gradation, additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports. The duty credit scrips can be used for procurement of capital goods with Actual User condition.

Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided. Special funds have been earmarked for the handicrafts sector.

Focus Market Scheme - 26 new markets have been added under Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia-Oceania . The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%.

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Focus Product Scheme benefit extended for export of ‘Green Products’; and for exports of some products originating from North East.

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C HANDICRAFTS ITEMS UNDER FPS

Carpets & other textiles floor coverings, knotted, whether/or not made up (hand knotted category only)Carpets & other textile floor coverings, woven not tufted/flocked, w/n made up, including "kelem" "schumacks", "karamanie" & similar hand-woven rugs (hand-woven category only)Carpets and other textile floor coverings, tufted, w/n made up (hand-tufted category only)i. DURRIES OF COTTON covered by ITC HS Code 57050021,

ii. DURRIES OF MAN-MADE FIBRES covered by ITC HS Code 57050022, 

iii. DURRIES OF WOOL covered by ITC HS Code 57050023, 

iv. OTHR TXTL FLR CVRNGS, W/N MADE UP covered by ITC HS Code 57050029, 

v. CARPETS OF BLENDED JUTE covered by ITC HS Code 57050031, 

vi. CARPETS OF COIR JUTE covered by ITC HS Code 57050032, 

vii. OTHR CARPETS OF JUTE covered by ITC HS Code 57050039, 

viii. CARPETING, RUGS, MATS & MATTINGS covered by ITC HS Code 57050049 & 57050090.

Glassware for table kitchen, toilet, office indoor decoration Handicraft of cast ironOther handicraft of iron and steelHandicrafts / art ware of galvanized iron with brassArt ware / handicraft of brassArt ware / handicraft of copper

SOURCE: EPCH, http://www.epch.in/mda.htm,FOREIGN TRADE POLICY 2009-14.mht

Market Linked Focus Product Scheme (MLFPS) – Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusion of products classified under handicrafts such as Benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand).

Import of Samples - To facilitate duty free import of samples

by exporters, number of samples/pieces has been increased from the existing 15 to 50. Customs clearance of such samples shall be based on declarations given by the importers with regard to the limit of value and quantity of samples.

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New Handicraft SEZs shall be established which would procure products from the cottage sector and do the finishing for exports

Duty free import entitlement of trimmings and embellishments shall be 5% of the FOB value of exports during the previous financial year. The entitlement is broad banded, and shall extend also to merchant exporters tied up with supporting manufacturers

The Handicraft Export Promotion Council shall be authorized to import trimmings, embellishments and consumables on behalf of those exporters for whom directly importing may not be viable Specific funds would be earmarked under MAI & MDA Schemes for promoting Handicraft exports

CVD is exempted on duty free import of trimmings, embellishments and consumables.

Source: Foreign trade policy, http://business.gov.in/trade/foreign_trade.php

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International Standards

Asean Handicraft Promotion and Development Association (AHPADA) has a mission to preserve and improve the status of craftspeople within and outside the Asia/Pacific region.

Supports the fulfillment of its objectives through the sharing of ideas, know-how, experiences, resources and expertise in various regions.

Supports the development of crafts through different training initiatives .

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Domestic Standards

Currently, there are no quality standards applicable to handicrafts in India.

There could be suppliers who take advantage of the situation and supply low quality products, thereby marring the image of the country.

It poses a problem for the buyer as well, as it would necessitate personal inspection of the goods.

To counter this, quality standards need to be imposed in the following areas:

Raw material usage Process Production Finish Packaging

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Exporters face non tariff barriers in Western markets.

They also complain of impediments in the form of procedural delays at customs, disputes in nomenclature and duty drawback calculation.

There is shortage of skilled craftsmen and labor to match the competition.

Lack of ability to produce in large scale and create economies of scale.

Inadequate supply chain management and distribution reduces the sector’s commercial viability and economic sustainability.

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Branding Branding of Indian handicrafts to avert duplication by China of Indian handicrafts to avert duplication by ChinaOctober 16, 2010 (India)

In order to prevent the replication of Indian handicraft products by the Chinese producers in the global market, the Indian handicraft exporters have decided to brand their products.

The Exports Promotion Council for Handicrafts (EPCH) has been given the approval to act on the proposal by the Development Commissioner (Handicrafts) in the Textiles Ministry.

The Chinese handicraft manufacturers replicate the Indian artifacts and export it to India and the international market. 

The Chinese producers also export their craft products which have been designed and prepared using machines to the international market at lower prices, which has proved detrimental for the Indian exporters.

Handicraft exports from India had amounted to US $1.83 billion in 2009-10 and have been trying to achieve a target of $2.2 billion in the current fiscal year.  Fibre2fashion News Desk-India

Handicraft exports may touch Rs 10,000 cr mark

Press Trust of India / New Delhi July 11, 2010, 19:25 IST

Buoyed by a surge in demand from the US and Europe, India's handicraft exports may increase by more than 12 per cent in the current fiscal to touch the Rs 10,000 crore mark, Export Promotion Council for Handicrafts (EPCH) said today."India had exported handicrafts worth Rs 8,719 crore in the last fiscal. With demand from the US and Europe on the rise, it is likely to touch Rs 10,000 crore this fiscal," EPCH Chairman R K Malhotra told PTI.Malhotra said the pace of export growth gained momentum, after a two-year lull, from the later part of the last fiscal and the trend is a continuous one so far in the current fiscal as well.The country's handicraft shipments rose by 15.45 per cent (in rupee terms) in the first three months of the current fiscal over the corresponding period last fiscal.The increase in exports were led by the fashion jewellery and accessories segment, which recorded a significant 32 per cent growth in the first three months over the same period last year, Malhotra said."Although the increase has been by and large in all product categories, yet the increase in exports of fashion jewellery and accessories has been remarkable," he said.The world market for fashion jewellery and accessories is estimated to be around $16 billion, but India's share in this segment is negligible.Malhotra said EPCH has devised a strategy, which includes participation in trade shows and organising buyer-seller meets in upcoming markets among others to shore up India's exports in the world market.

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Indian handicraft festival a grand hit in Argentina

SPECIAL CORRESPONDENT-HINDU- NEW DELHI, November 17, 2009

The Export Promotion Council for Handicrafts on Tuesday said that the 10-day Festival of India organised by it in Argentina to showcase Indian handicrafts has generated business and serious enquiries worth over Rs. 105 crore.EPCH Executive Director, Rakesh Kumar, said looking at the trend at the festival, a complete turn around in handicrafts export from India could be expected by April next.Handicrafts export had been the worst affected by the global economic slow down, The exports had fallen by as much as 14 per cent in 2008-09 after registering an average annual growth of about 17 per cent between 2000-01 and 2007-2008. The festival was organised as part of an exercise to tap newer markets for Indian handicrafts. Traditionally, the main market had been US followed by the European Union, and the middle- east.The US topped the list, accounting for 38 per cent of the exports from India. Germany came second with a share of 14 per cent and United Kingdom the third with 10 per cent. Argentina has been increasingly becoming an important market, with an average growth rate of 12 per cent per annum in recent years. The exports to the Latin American country were US dollars 4.8 million during 2005-06. It increased to US dollars 4.96 million in 2007-08. Last year, it dropped to US dollars 3.13 million following the world-wide economic melt down. About 35 Indian companies had participated in the Festival of India showcasing a range of products including Christmas decoration, costume jewellery and accessories, incense sticks, home decoration and giftware, furniture and fixtures and textiles.

Indian handicraft festival a grand hit in Argentina

SPECIAL CORRESPONDENT-HINDU- NEW DELHI, November 17, 2009

The Export Promotion Council for Handicrafts on Tuesday said that the 10-day Festival of India organised by it in Argentina to showcase Indian handicrafts has generated business and serious enquiries worth over Rs. 105 crore.EPCH Executive Director, Rakesh Kumar, said looking at the trend at the festival, a complete turn around in handicrafts export from India could be expected by April next.Handicrafts export had been the worst affected by the global economic slow down, The exports had fallen by as much as 14 per cent in 2008-09 after registering an average annual growth of about 17 per cent between 2000-01 and 2007-2008. The festival was organised as part of an exercise to tap newer markets for Indian handicrafts. Traditionally, the main market had been US followed by the European Union, and the middle- east.The US topped the list, accounting for 38 per cent of the exports from India. Germany came second with a share of 14 per cent and United Kingdom the third with 10 per cent. Argentina has been increasingly becoming an important market, with an average growth rate of 12 per cent per annum in recent years. The exports to the Latin American country were US dollars 4.8 million during 2005-06. It increased to US dollars 4.96 million in 2007-08. Last year, it dropped to US dollars 3.13 million following the world-wide economic melt down. About 35 Indian companies had participated in the Festival of India showcasing a range of products including Christmas decoration, costume jewellery and accessories, incense sticks, home decoration and giftware, furniture and fixtures and textiles.

India’s export data,(updated in June 2010),http://www.epch.in/hed.htm

Handicraft annual report,(updated in Dec 2010), http://www.epch.in/Circulars/Circulars/EPCH_Annual_Report_2009-10.pdf Trends in Handicrafts Sector, Updated on July 20

2010,http://www.fibre2fashion.com/industry-article/29/2826/trends-in-handicrafts-sector1.asp

Highlights of the Annual Supplement 2010-11 to the Foreign Trade Policy 2009-14, (updated in 2010) ,http://www.exim-policy.com/new_eximpolicy_highlight.html

Indian handicraft export, http://business.mapsofindia.com/rural-economy/handicraft-industries/

handicraft facts, http://www.india-crafts.com/business-reports/indian-handicraft-industry/key-facts.htm

global market assessment for handicrafts,, USAID, www.microlinks.org/.../Global_Market_Assessment_for_Handicrafts.pdf?..

http://business.gov.in/trade/foreign_trade.php

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Thank you

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