Indian Handicrafts Industry

Kumar Rajgeet

What are Handicrafts?

Handicrafts are mostly defined as “Items made by hand, often with the use of simple tools, and are generally artistic and/or traditional in nature. They are also objects of utility and objects of

decoration.”

Classification

Kitchenware, garden ware, toys, office-ware, furniture and furnishings, accessories, decorative items, tableware, bathroom accessories, gift & souvenir articles, house ware, wall décor, floor

covering and carpet, interiors & architonic.

Indian Handicraft

• India is one of the important suppliers of handicrafts to the world market.

• The Indian handicrafts industry is highly labour intensive cottage based industry and is decentralized.

• It is spread all over the country in rural and urban areas.

• It has high potential for employment.

• The export earnings from Indian handicrafts industry for the period of 2013-14 amounted to US$12.3.

• Although exports of handicrafts appear to be sizeable, India’s share in world imports is miniscule.

• It is a sector that is still not completely explored from the point of view of hidden potential areas.

Major Centres

• Moradabad also known as the "Peetalnagari" (City of Brass)

• Saharanpur-wooden articles.

• Ferozabad-glass.

• Rajasthan offers the famous Jaipuri quilts, Bagru and Sanganerprinted textiles and wooden and wrought iron furniture from Jodhpur.

• Gujarat comes with embroidered articles from Kutch.

• Narsapur in Andhra Pradesh is famous for its Lace and Lace goods.

*This is only a small part of the total product range.

COUNTRY-WISE EXPORTS OF HANDICRAFTSArt Metalwares U.S.A., Germany, U.K. & Italy

Wood Wares U.S.A., U.K., Germany & France

Hand Printed & Textiles & Scarves U.S.A., U.K. , Germany & Canada

Embroidered & Crochetted Goods U.S.A., Saudi Arabia, U.K., Germany

Shawls as Artwares Saudi Arabia, U.S.A. Japan & U.K

Zari & Zari goods U.K. U.S.A., Japan & Saudi Arabia

Imitation Jewellery U.S.A., U.K., Saudi Arabia & Germany

Miscellaneous Handicrafts U.S.A., Germany, U.K. & France

Value Adding Chain in Handicrafts• Identification of market opportunities

• Prototype design and development / adaption and refinement

• Test marketing

• Upgrading equipping facilities

• Securing inputs

• Entrepreneurial hiring, training, managing

• Production, quality control and packaging

• Costing and pricing

• Physical distribution

• Export market development

SWOT Analysis of Indian Handicraft IndustryStrengths Weaknesses

• Abundant and cheap labour hence can compete on price

• Low capital investment and high ratio of value addition

• Aesthetic and functional qualities

• Wrapped in mist of antiquity

• Hand made and hence has few competitors

• Variety of products which are unique

• Exporters willing to handle small orders

• Increasing emphasis on product development and design upgradation

• Inconsistent quality

• Inadequate market study and marketing strategy

• Lack of adequate infrastructure and communication facilities

• Capacity to handle limited orders

• Untimely delivery schedule

• Unawareness of international standards by many players in the market

Opportunities Threats

• Rising appreciation for handicrafts by consumers in the developed countries

• Widespread novelty seeking

• Large discretionary income at disposal of consumer from developed countries

• Growth in search made by retail chains in major importing countries for suitable products and reliable suppliers. Opportune for agencies to promote marketing activities

• Use of e-commerce in direct marketing

Decline in India’s share due to:

• Better quality products produced by competitors from Europe, South Africa, South Asia, etc.

• Better terms of trade by competing countries

• Consistent quality and increasing focus on R&D by competing countries

• Better packaging

• Stricter international standards

Documentation in Trading of Handicrafts

Pre and Post Shipment documents

• Sample Invoice, Proforma, Packing Slip,

• Packing List , Invoice

• Shipping Instructions, Road Challan, Master Case Labels

• Certificate of Origin (GSP, DCC, PHD)

• Letter of Credit Monitoring

• Bill of Exchange/ Sight Draft

• Bank Realisation Certificate

• Sales & Pending Shipment Reports

• DBK & DEPB, Advance Licenses, Focus, Incentive calculation

• Pre & Post Shipment Profitability Analysis

• Different item description in Invoice & Packing Listfor Buyer & Custom

Buyer and Vendor Purchase order processing

• Factory Order for Production department with photo

• Buyer Order Reports based upon Qty & Value

• Buyer Shipment & Payment Status

• Material Receipt & Debit Note generation

• Vendor Bill Reconciliation & Payment Control

• Vendor Order Control Reports

Store Inventory (Trading and Production)

• Material Incoming & Outgoing Registers

• Stock Ledger & Valuation

• Stock Allocation for Buyer Order & Indent Planning

Government Assistance

EPCH• The Export Promotion Council for Handicrafts (EPCH) is the apex body

of the Government of India and works under the administrative control of the Ministry of Textiles.

• EPCH was established under Companies Act in the year 1986-87 and is a non-profit organisation.

• Its objective is to promote, support, protect, maintain and increase the export of handicrafts.

• It is an apex body of handicrafts exporters for promotion of exports of Handicrafts from the country.

EPCH initiatives• Aggressive international marketing project for the development and

promotion of north eastern crafts

• National centre for photo & picture framing technology at Saharanpur and jodhpur

• Technology upgradation centre at Saharanpur

• Establishment of international lace trade centre

• Setting up of Moradabad resource centre

Handicrafts Organization

• All India Handicrafts Board

• State and Union Territories

• Central Corporations

• The Central Cottage Industries Corporation Pvt. Ltd.

• The All India Hand loom Fabrics Marketing Cooperative Society Ltd.

EXIM Bank

• The Export-Import (EXIM) Bank of India is the principal financial institution in India for coordinating the working of institutions engaged in financing export and import trade.

• It was established on January 1, 1982 for the purpose of financing, facilitating and promoting foreign trade of India.

• The authorised capital of the EXIM Bank is Rs. 200 crore and paid up capital is Rs. 100 crore, wholly subscribed by the Central Government.

The main functions of the EXIM Bank are as follows:

• (i) Financing of exports and imports of goods and services, not only of India but also of the third world countries;

• (ii) Financing of exports and imports of machinery and equipment on lease basis;

• (iii) Financing of joint ventures in foreign countries;

• (iv) Providing loans to Indian parties to enable them to contribute to the share capital of joint ventures in foreign countries;

• (v) to undertake limited merchant banking functions such as underwriting of stocks, shares, bonds or debentures of Indian companies engaged in export or import; and

• (vi) To provide technical, administrative and financial assistance to parties in connection with export and import.

• The India Expo Center & Mart is aimed at enabling Indian exporters of handicrafts products located in different parts of the country to display their merchandise.

• It provides a convenient place for the overseas buyers to come and source.

• The Infrastructure of eight exhibition halls with support facilities of international standards at India Expo Center & Mart enables holding of world class exhibition

India Expo Center & Mart

• The location of Greater Noida Expressway is most appropriate. It is easily accessible from the Delhi airport.

• It is anticipated that the India Expo Center will develop into a wholesale markets for hand crafted life style products.

• The India Expo Center & Mart has now become the venue of Indian Handicrafts & Gifts Fair held twice in the year in spring and autumn.

• More than 8500 buyers from all leading markets of the world visit the Indian Handicrafts & Gifts Fair every time.

Conclusion

• The handicrafts industry has tremendous potential for growth in world market as also in India. India has excellent craftsmanship inherited over the generations.

• It has uniqueness of diverse culture, diverse raw material base.

• Many languishing regions have not been concentrated upon by exporting community and require the support of the Government.

• There are many opportunities for expansion in the future.

Thank You