Artisan Connect

GROWTH PROSPECTS OF THRUST AREAS OF INDIAN

Date : 2011-05-02 11:04:08

DescriptionGROWTH PROSPECTS OF THRUST AREAS OF INDIAN EXPORT Course: - MBA – IB Batch: - 2009 – 2011 Section: - C Submitted by: Mohit Bansal A1802009221 Sandeep Saxena A1802009254 Swati Sharma A1802009282 1 S.no. 1 2 3 4 5 7 8 9 CONTENTS Overview Production Centres Domestic Industry Trends in Export Major Export Destinations Provisions in India’s Foreign Trade Policy Problems / Challenges faced by the exporter Quality Standards Need of the Moment : IPRs & Branding for Indian Handicrafts Page no. 3 15 24 26 28 37 41 42 44 10 SWOT Analysis of the Indian handicrafts industry 11 12 13 Bibliography Handbook Of Procedures: Tables 46 47 48 2 OVERVIEW 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 decentralized, being spread all over the country in rural and urban areas. Numerous artisans are engaged in crafts work on part-time basis. The industry provides employment to over six million artisans (including those in carpet trade), which include a large number of women and people belonging to the weaker sections of the society.In addition to the high potential for employment, the sector is economically important from the point of low capital investment, high ratio of value addition, and high potential for export and foreign exchange earnings for the country. The export earnings from Indian handicrafts industry for the period 1998-99 amounted to US$ 1.2 billion. 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. India, a country with 26 states and 18 languages and more than 1500 dialects offers an enormous range of handicrafts from each of the states. Major centres in Uttar Pradesh are Moradabad also known as the "Peetalnagari" (City of Brass), Saharanpur for its wooden articles, Ferozabad for Glass. The North Western state of Rajasthan has to offer the famous Jaipuri quilts, Bagru and Sanganer printed textiles and wooden and wrought iron furniture from Jodhpur. The coastal state of Gujarat comes with embroidered articles from Kutch. Narsapur in Andhra Pradesh is famous for its Lace and Lace goods. But this is only a small part of the total product range. India offers much more. Handicrafts are classified into two categories: 1. Articles of everyday use 2. Decorative items The craftsmen use different media to express their originality. The diversity of the handicrafts is expressed on textiles, metals – precious and semiprecious, wood, precious and semi-precious stones, ceramic and glass. 3 4 Textile based handicrafts: Hand printed textiles including block and screen printing, batik, kalamkari (hand printing by pen) and bandhani (tie and die) are used in products ranging from bed-covers to sheets, dress material to upholstery and tapestry. The famous embroidered articles of silk and cotton, often embellished with mirrors, shells, beads, and metallic pieces are also found in India. Embroidery is done too on leather, felt and velvet etc. This segment of the industry accounts for almost half a million strong employment in addition to a large number of designers, block makers, weavers and packers involved in the trade. Clay, Metal and Jewellery: Brass, copper, bronze, bell metal are used for a variety of wares and in a variety of finishes. Scintillating ornaments are available in a wide range of patterns, styles and compositions. Made from precious metals, base metals, precious and semi-precious stones; these ornaments have traditional as well as modern styles. 5 Woodwork: Wooden articles in India range from the ornately carved to the absolutely simple. One can find toys, furniture, decorative articles, etc. bearing the art and individuality of the craftsman. India is known particularly for its lacquered wood articles. Stone Craft: The intricately carved stoneware made of marble, alabaster or soapstone, etc., inlaid with semiprecious stones carry on the heritage of Indian stone crafts. 6 Glass and Ceramic: Glass and ceramic products are a fast upcoming segment in the handicrafts from India. The age-old production process of mouth-blowing the glass instills a nostalgic feeling. The varied shapes of ceramic and glass in a number of colours, would appeal to Western aesthetics while retaining the Indian touch. Craft concentration Areas: A wide range of handicrafts are produced all over Indian artmetalware / EPNS ware, wood carvings and other wooden artwares, imitation jewellery, 7 handprinted textiles, shawls as artwares, embroidered goods, lace and lace goods, toys, dolls, crafts made of leather, lacquerware, marble crafts etc Selected crafts pockets for achieving export goal: Although each crafts pockets has its particular problems, a few selected craft pockets are identified based on their past performance for immediate remedial attention to stimulate a quantum in exports of handicrafts in the coming years. Moradabad(UP) Saharanpur (UP) Jodhpur (Raj.) Narsapur (A.P.) For Artmetalwares and imitation jewellery For Wooden handicrafts handicrafts & Wrought iron For Wooden, Wrought Iron and Sea Shell handicrafts For Lace and Lace goods 8 In the changing world scenario, craft products exported to various countries form a part of lifestyle products in international market. The impact is due to the changing consumer taste and trends. In view of this it is high time that the Indian handicraft industry went into the details of changing designs, patterns, product development, requisite change in production facilities for a variety of materials, production techniques, related expertise to achieve a leadership position in the fast growing competitiveness with other countries. The 6 million craft persons who are the backbone of Indian Handicraft Industry as provided with inherent skill, technique, traditional craftsmanship but that is quite sufficient for primary platform. However, in changing world market these craft persons need an institutional support, at their places i.e. craft pockets for value addition and for the edge with other competitors like China, Korea, Thailand etc. 9 HANDICRAFTS PRODUCTS AND MARKET SEGMENTS In this section, textile products, ceramics and pottery, and mosaic products will be analyzed in terms of major products sold and segmentation of markets based on feedback from surveying major producers of these three product categories. Market segments in the handicraft industry tend to vary with individual products. The surveys of Jordanian handicraft producers revealed that in general there are two main target markets for the producers which are the tourists market and the second market is the local market that includes individual buyers and corporate and government buyers. 1) Textile Products The most sold embroidery product is small gift items (coasters, tea cozy sets, soft toys, make-up bags, etc) which are predominantly sold to tourists through duty free shops, gift shops at hotels, producers own showrooms, and retailer’s outlets at tourist’s sites. Other embroidery items that are popular with tourists are cushion covers, runners, shawls and Table cloths amongst others. Examples of the retail price range for small gift items sold by a successful private business is 22$ - 25$ for a tea cozy set. Therefore, gift items that are under 30 USD$ are the most sold embroidery product and tourists is the largest buyer segment. Besides tourists, embroidery products are also sold to local buyers as corporate or governmental gifts (embroidered wooden boxes), to hotels (tablecloths and wall hangings) and to individual local buyers. Export markets for embroidery products make up 20% of production and sales are concentrated in the Gulf region and Saudi Arabia. As for weaving products, the main products are rugs, runners, wall hangings and pillows. The largest buyers in descending order are governmental gifts, local buyers, tourists and corporate gifts. 2) Ceramics and Pottery Products There are two main buyer segments for ceramics and pottery products, which are tourists and local buyers. The largest buyer segment is the tourist market, and the most sold ceramics and pottery products for tourists are 10 small gift items and ornaments. Products are sold through retail outlets at tourists sites. Ceramics that are targeted at the local market are ceramic art ware and the most sold products in descending order are (salad bowls, nut bowls, amphorae, plates and pencil holders). In addition ceramics and pottery are sold as corporate and government gift items. These products are sold either through the producers own showrooms or through retailers. Around 70% of ceramics are sold locally and 30% is exported. Export markets for ceramic and pottery products are concentrated in the Gulf region and Saudi Arabia. 3) Mosaic Products According to the retailers, there is a high demand for mosaic products, which is not being met by local production. In fact, it was mentioned by one of the large retailers that 80-90% of mosaic sold in Jordan is made in Syria. The reason for low production in mosaic is because it is very labor intensive and Jordan lacks the labor pool that will ensure sustainability of the business for local producers. The most sold mosaic products is small gift items for tourists (retail price from 2-45 JDs), floor tiles (500 JDs per square meter), wall to wall artwork 500 JDs per square meter), pictures (45-1000 JDs) and furniture (350-1500 JDs). The largest buyer segments in descending order are tourists, local buyers, hotels, export orders, corporate and government gift items. Most mosaics are sold in the local market and around 30% is sold to international markets including the U.S., France, the U.K. and the Gulf region. 11 EXPORT OF HANDICRAFT The exports of Handicrafts have shown an increase of Rs. 535.82 crores, from Rs. 8183.12 to Rs. 8718.94 crores, an increase of 6.55% in rupees term. In dollar terms, the exports have shown the increase of US $ 32.35 millions i.e. the exports increased by 1.80 % over the similar period in 20082009. . During the period, the exports of Art Metalware, Wood wares, Hand printed Textiles & Scarves, Embroidered & Crocheted goods, Shawls as artwares, Zari & Zari goods, Imitation Jewellery and Misc. Handicrafts showed a increasing trend of 4.88%, 15.17%, 5.06%, 6.12%, 10.64%, 5.61%, 18.03% and 4.74% in rupees terms respectively and 0.21%, 10.01%, 0.38%, 1.39%, 5.73%, 0.91%, 12.76% and 0.07% in us$ term respectively. Overall an increase in the rupee term was 6.55% and in the US $ term was 1.80%. Membership of Council Membership of the Council rose from 35 in year 1985-86 to 6207 in 2009-10. Indian handicrafts and gifts fair One of the few fairs in world where entry is only open for the overseas buyers. India Expo Center & Mart:- It is a mega structure that is truly international and provide both the buyers and sellers with an excellent opportunity for transacting business. The facilities are spread in a total covered area of 2,35,000 sq. mtrs., one can experience a first class business ambiance with conference halls, business centers, buyers lounge, multicuisine restaurants, bank outlets, 4 gigantic exhibition halls, extensive parking facilities, logistic centers, warehouse facilities etc. at this state-ofthe-art venue. Common Facility Center (CFC):- In order to upgrade the photo and picture framing techniques, the Council with the Assistance of O/o DC(Handicrafts) and Department of Commerce, Ministry of Commerce & Industry has set up the CFC at Saharanpur namely “ National Center for Picture and Photo Framing Technology (NCPPFT)”. In addition to this another CFC has als o been set up at Jodhpur for seasoning of woods. The machines for the CFCs have been imported from Italy, Germany and Taiwan and are installed at the Centers and also the consultancy is being provided by the reputed international designers at these centers. National Center for Design & Product Development (NCDPD):- In 12 order to upgrade the dynamic designs and product development and to help the Indian handicrafts exporters and artisans with the development of latest products and designs in consonance with the changing needs of the international trade, National Center for Design and Product Development has been set up by the Council in association with the O/o DC (Handicrafts). Technology Upgradation Center (TUC):- In order to provide complete face lift to the Saharanpur Wood Carving Industry. The Council has set up Technology Upgradation Center at Saharanpur providing the design studio, seasoning plants, carpentry school and training & marketing facilities for exporters. 13 14 PRODUCTION CENTRES The items, which account for a major share of export turnover, include - art metal ware, wood ware, hand-printed textiles, hand-knotted and embroidered textiles, leather goods, stoneware, paintings and sculpture, jewelry and antique & collectibles. With 26 states, 18 languages and more than 1500 dialects, the country offers an enormous range of handicrafts from different states and regions. Major production centers are, in Uttar Pradesh - Moradabad also known as the "Peetalnagari" (City of Brass), Saharanpur for its wooden articles, Ferozabad for Glass. The North-Western state of Rajasthan is known for its Jaipuri quilts, Bagru and Sanganer printed textiles and wooden and wrought iron furniture. The coastal state of Gujarat offers famous embroidered articles from Kutch. Narsapur in Andhra Pradesh is known for its Lace and Lace goods. But all this is only a small portion of total product range. The country offers much more. Art Concentration Areas A comprehensive range of handicrafts and gifts products is made all over India. Although it is quite difficult to limit a particular place for a specific craft, the following places are well known for their unique crafts. Moradabad, Sambhal, Aligarh, Jodhpur, Jaipur, Delhi, Rewari, Thanjavur, Madras, Mandap, Beedar, Kerala, Jagadhari and Jaselmer Saharanpur, Nagina, Hoshiarpor, Srinagar, Amritsar, Jaipur, Jodhpur, Jagdalpur, Bangalore, Mysore, Chennapatna, Madras, Kerala & Behrampur (WB) Jaipur, Farrukhabad, Sagru & Art Metalware Wooden Artwares Hand Textiles Scarves printed Amroha, Jodhpur, and Sanganer Embroidered Goods Marble Craft & Stone Kutch (Gujarat), Jaisalmer, Baroda, Lucknow, Jodhpur, Agra, Amritsar, Kullu, Dharmshala / Chamba & Srinagar Agra, Madras, Baster and Jodhpur Agra, Madras, Baster, and Jodhpur Terracotta 15 Zari & Zari Goods Papier Craft Artistic Goods Machine Leather Rajasthan, Madras and Baster Kashmir and Jaipur lndore, Kolhapur and Shanti Niketan (WB) Delhi, Moradabad, Sambhal, Jaipur and Kohima (Tribal) Imitation Jewelry Coastal Crafts of India All along the vast coastline of India flourish crafts that are as beautiful, as variegated as the changing colours of the sea waves. While some of these handicrafts have been designed fairly recently by creative craftsmen, many of the handicrafts found in unexpected abundance along the coast of India are as ancient as the seas. Again, while some of the handicrafts are created from material provided by the sea (such as conchshells), a many of the handicrafts are not directly related to the sea. The state of West Bengal—the northernmost of the states that fringe the Bay of Bengal—has a heritage of crafts that is based on the resources of the sea and on land locked traditions. In Calcutta and Midnapore, sankharis or conchshell workers practice their hereditary, age-old craft. With an expertise honed to near perfection by long year of experience, they slice glistening conchshells with simple hand tolls and fashion bangles, bracelets and a range of ornaments. Ritualistically, conchshell bangles, bracelets and a range of ornaments. Ritualistically, conchshell bangles, once worn, are to meant to be discarded by Bengali women during the lifetime or their husbands. Along with shell articles is produced mother-of-pearl cutlery such as spoons, forks, knives, small plates, and jewellery. Better known than its shell products is the high quality leather work of Calcutta. Originating in relatively recent times at Santiniketan—a name synonymous with poet laureate Rabindranath Tagore—the handmade leather goods display a variety of pleasing floral, geometric and figurative motifs. Sometimes, the designs are filled with colour. The tooled leather patterns and batik work in leather are strikingly different from the general run of leather crafts. In addition to handbags, bags, suitcases, wallets, and similar items, there are cushion and moorah (small handicrafted stool) covers as well. 16 Brass and bell metal craftsman can also be found working in Calcutta, while around and near Calcutta, a number of crafts have carved a niche for themselves. At Howrah can be seen craftsmen busy making garlands, dolls, images of gods and goddesses, decorative fans and other forms out of sholapith. The raw material is obtained from the porous roots and stems of an aquatic plant. The extracted bark looks very much like ivory in colour and texture, and is ideal for carving into a wide spectrum of products. Hooghly specializes in folk toys, chikan embroidery, cane and bamboo furniture and bric-a-brac, along with jute articles. Midnapore produces handwoven mats, and also preserves one of the oldest crafts in the state—Dhokra metal casting through the cire perdue (lost wax) process. Animals and birds, images of a pantheon of gods and goddesses are created with deceptive ease. Southward from West Bengal, down the eastern coastline, lies the state of Orissa. Known for its golden beaches, Orissa has for centuries been home for craftsmen and artisans skilled in a number of handicrafted folk and art forms. In the temple town of Puri reside craftsmen who appear to breathe life into inanimate objects and transform them into appealing, vibrant creations. There are the stone carvers at Pathurasahi who, working on sandstone or soapstone with classical techniques handed down from generation to generation, chisel an array of exquisitely carved stoneware—statues of gods and goddesses and utility items to suit the needs of modern patrons of their craft. Similarly, the brass icons of Puri still retain pride of place on the shopping lists of discerning buyers in Puri. At Khandapara, and elsewhere in Puri, live woodcarvers long famed for their skill in making wood masks, toys—generally with limbs that are detachable— and other decorative items in a style distinctively their own. Then there are the chitrakars (artists) who specialize in making patachitras—the renowned cloth folk paintings of Orissa which enshrine and reflect the rich socioreligious history of the region. 17 Applique work in rich hues of traditional red, black, white and yellow mixed with a more recently introduced green embellishes beach umbrellas in Puri, sarees, cholis (short, tight blouses), bed linen, handbags… The sholapith craft is also practised vigourously at Puri, with the craftsmen turning out decorative hangings, images of the gods, garlands, flowers and a host of other articles. Then there are craftsmen who make papier mache masks which are in great demand both because of their visual appeal and the quality of workmanship. South of Orissa one enters the state of Andhra Pradesh which has a long, highly refined tradition of coastal crafts. The craft of kalamkari—resist printed, pen style friezes on cloth—was practiced at Masulipatnam, it is recorded, even before the Christian era. Faithfully following time honoured traditions, the kalamkari craftsmen drawn stories from mythology and from the great epics—the Ramayana and the Mahabharata—outline them with gold borders and print them on cloth with local vegetable dyes which yield shades of blue, ochre and a soft rose. In addition to the rare art of kalamkari, Masulipatnam is the centre for the prized work of gold covering. Like kalamkari, the gold covering process is an intricate one. Copper, silver and brass are formed into an alloy. Gold is then beaten and drawn into fine wires and foils and superimposed on the alloy ornaments such as bangles and necklaces. From Andhra Pradesh, one moves down the coast to Tamil Nadu—a state that has a rich tapestry of crafts that are hoary with age and yet remain as arresting as they were recorded to be in centuries gone by—and to the tiny Union Territory of Pondicherry. Amongst other crafts, it is beautifully crafted dolls and toys made from terracotta, papier mache and plaster of paris that make the union territory of Pondicherry almost a byword in the south, for the dolls made in Pondicherry have become famous in surrounding Tamil Nadu, for instance, as Puducheri Bommai (dolls from Pondicherry). 18 Once ruled by Frenchmen, Pondicherry has a surprising number of striking crafts in so small a geographical area. The oldest craft in Pondicherry—that of bronze casting—dates to the 8th century AD. Puja lamps made from five metals and known as kamatchi villakku are prized items of prayer with a large number of families in South India. Then there is handloom cloth in traditional designs, hand-woven carpets, hand-woven woollen pile carpets, handprinted textiles (both kalamkari and batik), cane furniture, handmade paper and handrolled incense sticks from the Sri Aurobindo Society. Chennai, the capital of Tamil Nadu is a multi-craft city—a centre for cane weaving, hand printed textiles, hand embroidered textiles, horn work, jewellery, toys, musical instruments, sea shell products. Mahabalipuram is known for its stone carving, executed by master craftsmen who craft idols and statues with the classical techniques laid down in the age-old silpashastras. The craftsmen at Tambaram and Nachiarkol excel in moulding metalware. Bronze and copper icons are made through the cire perdue (lost wax) process. Ash trays, bowls, utensils and other items are made from copper, bell metal, brass and bronze. At Kanyakumari, women dye palm leaves, weave them into patterns, occasionally adding aluminium foil to enhance the effect, and make shopping bags, folding fans, trays, even suitcases. Some craftsmen at Kanyakumari make dolls and toys. From Kanyakumari, one rounds the tip of India, through the Indian Ocean and into the Arabian Sea which runs along the west coast of India. Lush, green Kerala is the southernmost state on the western coast. Like other coastal states, the history of Kerala’s handicrafts spans a whole phalanx of eventful centuries. And as in most places, its handicrafts are fashioned from material that is locally available and motifs and designs derived from a combination of religion, history, and natural surroundings. So it is that in Kerala, once known for its large herds of elephants, ivory carving is an age old craft. Today, there is a justifiable clamp down on ivory production and an appreciable reduction in the quantity of ivory available for carving. Within this setting, Trivandrum is a major centre for ivory carving. There are ivory rosaries, mythological figures in ivory, figures of Buddha, figures of Christ, book marks, cigarette holders, pen stands and much else – a truly amazing collection of ivory carvings. A much sought after speciality of 19 the ivory carvers of Kerala is 100 or more teeny weeny ivory elephants placed in an incredibly small seed shell which has a diameter of only 0.5 centimeters. Like Cochin, Ernakulam and Trichur, Trivandrum too has a reputation for wood carving. The craftsmen use sweet smelling sandal wood, cedarwood and rosewood to make coffee tables, dishes, birds, animals, figures in local costumes, Kathakali dancers. The sculptural and relief work in wood and the wood inlay work is illustrative of superb craftsmanship. Up north from Kerala lies the state of Karnataka. Here in the coastal area of Karnataka, wood carving is one of the oldest crafts which employs a variety of motifs to create trays, paper-weights, fans, perforated lampshades. Honawar and Kumta, where the craftsmen focus on carving the images of gods and goddesses, are prominent centres of wood carving. Mangalore is noted for its jewellery, particularly its bangles set with pearls and its pendants. Together, Mangalore and Udipi produce meticulously crafted items of brass and copper—lamp shades, furniture, door handles. At Coorg, craftsmen and women paint toys in bright colours. The women of Coorg also produce hand embroidered textiles. Northwards, in the state of Maharashtra, most of the crafts are concentrated in Mumbai.The painted black pottery and the hand painted glazed tiles made at Dharavi acquired popularity within a short time. The cloth dolls, the cushion covers with mirror work, the sisal shopping bags, mats and other items made from sisal and fibre, articles made from cane and bamboo are amongst the crafts practised in Bombay. The traditional craft of Maharashtra—copperware—has its base at Thana where craftsman produce trays, ashtrays, perforated chandeliers… At Miraj are produced musical string instruments—the sarangi, the sitar, tampura, dilruba… Dadra and Nagar Haveli are tiny Union territories, as are Daman and Diu. The chief crafts at Dadra and Nagar Haveli are the production of leather slippers, and the weaving of bamboo mats and baskets. Articles made from the greenish gold torpe grass are extraordinarily beautiful. Mat weaving is the dominant craft in Daman, while Diu is known for its tortoise shell and ivory carving. 20 Gujarat, the northernmost state on the west coast of India has an eloquent, rolific tradition of stylized crafts.Mirror work and embroidery in a variety of stitches and with different textured threads and motifs thrives as a highly evolved craft in Bhavnagar and Jamnagar. Silver ornaments, silver flower vases, plates, silver utensils, enameled articles for those who cannot afford silver, ivory work, and bandhini—the tie and dye process of resist printing— are practiced with fervour in Jamnagar. Large, decorative chests on wheels made from teak wood and tin plates and known as pataras are made at Bhavnagar and Mahuva. Now regarded as a collectors item, pataras are now used as bangle boxes, trinket boxes, makeup boxes, paper storage boxes and so on. Mahuva, along with Jamnagar, has a tradition of producting toys and bangles as well. Articles carved out of wood and lacquer work on wood are other crafts practiced at Mahuva. Probander is renowned for its Patola weaves. Red, green, yellow, black and white are the traditional colours used in Patola fabrics. A tie and dye process is used to ensure identical patterns—geometric designs, flowers, birds—on both sides of the woven cloth. Preparing a Patola fabric is a long, painstaking process which is why they are expensive. Patola sarees hand-woven with silk threads and patterned in the weave—generally with birds and animals—can cost several thousand rupees. Besides Porbander, a few craftsmen also live and practice their Patola craft in Patan. But it is Surat with a tradition of multiple crafts that emerges as the choicest craft centre on the Gujarat coast. Surat is perhaps the most important zari manufacturing centre in India. Fine gold and silver threads used in zari work are made in hundreds of workshops, big and small, in Surat, as are other items used in the lustrous zari work—kinari, salma, stars and spangles. The ivory inlaid boxes of Surat are in demand throughout the year. Plates of sandalwood are engraved and gummed onto teakwood boxes. Small strips of ivory are also arranged in patterns and affixed to the teak wood boxes. The number of ivory inlay craftsmen has dwindled over the years and today less than a handful still devote themselves to the craft. Both at Surat and Mahuva, there flourishes a tradition of wood carving, striking for its consummate workmanship. Table lamps, side tables, animals are crafted by communities known as Mewara mistris. 21 Sadeli or marquetry work is yet another speciality at Surat. Long, thin strips of wood, tin or ivory are cut and pasted in patterns on boxes and caskets to create appliquéd goods. Surat also has a rich tradition of silver work. The Gulf of Cambay has, since ancient times, earned fame for its exceptionally beautiful hand crafted articles and ornaments of agate, a semiprecious stone. Besides agate necklaces and other ornaments, there are agate bowls, trays, tiny stands and other items. And so, without a break—geographically or traditionally—the vast coastline of India reveals the remarkable continuity and versatility of dedicated craftsmen in creating an assortment of vivid crafts and folk idioms that appeal to a wide cross section of people. Works of art, the crafts of coastal India reach out to even the most fastidious of buyers and patrons. 22 23 DOMESTIC INDUSTRY The handicraft industry stands at "100 billion worldwide and India has 1.2% of this market. This year the major buyers of Indian handicrafts were US, Canada, the European and the West Asian countries among which the United States rule largest import market for Indian handicrafts. The handicrafts industry in India is spread all over the country employing approximately over 5 million artisans and around 67,000 exporters tapping this market. The handicraft and handloom sector is a major source of rural employment and earns substantial foreign exchange. The Indian handicraft sector this year has shown an annual average growth rate of 8.5%. Handicrafts, over the last few years have transformed their utility from mere shelf decorative to daily useable category. It is thus the primary need of any seller to constantly update, develop & add to his product profile. As one says that variety is the spice of life, the handicraft market has really changed over the years and one cannot imagine even surviving in the market with the same old products. Major items of export include art like metalware, woodware, handprinted textiles and leather, wood and cane wares, embroidered and crocheted goods, shawls as artware, zari goods, laces, and fashion jewelry. Traditional textiles are as popular abroad as they are within the country. The major export items include hand-knotted carpets, art metalware, handprinted textiles. The enchanting metalware industry Metal is part of the Indian traditions and availability of different metals and its vulnerable nature has made it the base for a variety of decorative techniques such as inlay, metal casting, carving, applique, etc. The scope of art metal is immense. Some it's specialty are the 'Urli', bell-metal vessel in Kerala, metal based lamps which are part of the Indian traditions and rituals, metalwork with coloured enameling and intricate engravings in niello in U.P. Delhi too is an important centre for art metalwork, metal engravings in on walking sticks, nutcrackers, cutlery, knives etc in Kashmir. These all are exported as well as sold in the local markets. But the constant drawback of this industry is the change in consumer's demand in favor of stainless steel, plastic, ceramic goods and crockery, also getting loans from banks remains complicated. To address this problem, Grameen Bank and other commercial banks have initiated programmes to improve the difficulties faced by the manufacturers and exporters. Also some individual states have their own remedial measures and is getting some financial help. For now this sector needs attention and Indian government is trying it' best to boost this industry in the global market. Fascinating Woodcraft Sector Woodcraft industry in India is an export oriented industry 24 and major part of its production is being exported from India. The products made of the wood locally available are limited to human and animal figures, fruit bowls, household items, boxes, dragon and other masks, flower vases and few other decorative items. Different types of wood are used in different places, for carvings, depending on the local availability, which includes sesame wood, rose wood, and sandalwood and walnut wood. Besides carvings, woodwork inlaid with ivory or metal, lacquered woodenwares and other artistic wood wares are produced in many states. The woodcraft industry in India is scattered throughout the country with greater concentration in states like UP (Saharanpur), Jammu & Kashmir (Srinagar), Karnataka, Kerala and Tamil Nadu. These products have a great market in the foreign countries and are in great demand over there. The Indian government also has taken active part to boost this industry and Government's propaganda of the woodcraft has found a great market for Indian woodcrafts in the west. Indian Aroma industry These small little sticks have become very popularly in the market. Their fragrance is said to lure the world. The sticks come in variety of fragrances and are made from mixture natural ingredients like extract of rose and other flowers, sandalwood, other fruity fragrance, spicy fragrance etc. Incense is said to purify the atmosphere. It is used in many places of worship, religious functions, festive occasions, weddings etc for various purposes. Despite its wide usage and popularity, a significant part of the Indian incense industry is still cottage-oriented. Most of the sticks are handmade and are mostly carried out by Small Scale Industries. It serves as a mode of employment in the rural sector. If we have to look at incense stick or Agarbatti exports seriously, we have to understand international buyer's needs, what he requires and what not. The size of the incense stick industry in India is about Rs.1000 crores a year but it is a very price sensitive segment and hence competition is tough. Major competitor of India is Japan with ruling more than 50% of the Incense Industry. India has over 3800 production units and is said to generate approximately US " 300 million from domestic and export markets. Quality is the primary importance one needs to follow. Also packaging of this material is another crucial aspect one needs to concentrate on. Further the right kind of marketing approach can win you many promising customers thus flourishing the Indian incense market further at global level. The count of Indian handicraft product remains infinite and the industry have withstood competition from machines over the years. Overall the Indian culture is rich in hand crafted goods but repetition is it's only enemy which cannot quench the need of this so fast changing market. The manufacturers and exporters have to be constantly be on their toes and come out with new innovative ideas that work in the export market. 25 TRENDS IN EXPORTS The Indian Handicrafts exporters have finally something to cheer about. The export figures for handicrafts in August this year have shown a rise of 22 percent to USD 369 million as compared to USD 303 million in August last year. The rise is attributed to Christmas orders from US and European markets. The US and EU together account for 70 per cent of the country's handicraft exports and with Christmas and New Year approaching, Indian Handicrafts exporters will see more profits and export orders for their products in the days to come. Indian handicrafts exporters have already generated half the target of $2,200 million during the first two quarters of this financial year. It marks 13.6 per cent growth when compared to handicraft export revenues of Rs 8,718.94 crore in the year 2009-10. According to the provisional data available the exports of Handicrafts have shown an increase of 21.71% in dollar terms, during April-August 20102011, over the similar period in 2009-2010. The exports of art metal wares, wood wares, hand printed textiles & scarves, embroidered goods, zari & zari goods, imitation jewelry and misc. handicrafts have also shown an increasing trend. The Handicrafts sector was hit hard by global recession; there was 30 percent decline in handicraft export orders for India in the last three years. The sector turned positive in September 2009, registering a growth of over 165 percent. Indian Handicrafts exporters are now hopeful that the positive trend will continue in the coming months also. Moradabad, Saharanpur, Jaipur and Jodhpur are the major handicraft hubs in India, catering to global markets. The sector employs about 1 million people. Handlooms and Handicrafts Sector craved for growth since quite a few years, which has now actually turned prolific. No doubt, India has an edge against its competitors like China, Philippines, Thailand, Taiwan and Korea who generally produce machine-made products. Indian handmade products have a niche market all over the world creating a distinct impact through exclusive designs, workmanship, finesse, colors and raw material etc. The sector shows a not so significant growth in the 2009-10 fiscal but grows substantially in the first half of the 2010-11 fiscal. Keeping in view the trend, the sector is expected to show phenomenal results by the end of 2011. 26 27 Going along the trend shown in the markets we can very well see in the under given representation that the handicrafts sector after touching the Rs.17000 cr. mark in the 2006-07 fiscal started to decline and reached the much lower Rs.8000 cr. mark in 2008-09 fiscal due to the effect of recession. From 2009 latter half, it started to grow and the current scenario indicates to witness the Rs.10000 cr. mark by the end of 2010 (represented in Blue). India is not only benefited from its major markets in US and Europe but is also heading towards newer avenues like in Latin America. After 11 months of retrenchment since October 2008, export from the handicraft sector turned optimistic in September 2009, registering a growth of over 160 per cent compared to September 2008. The US and EU together account for 70 per cent of the country's handicraft exports. The Secretary of Ministry of Textiles Smt. Rita Menon expressed that the importers of USA, Europe and Japan now wants to have various social and environmental compliances to be made by exporters (producers) from India. The exporters now need to have the basic consciousness and so the norms are being implied by the concerned National and International Authorities. Since the measures are taken in view to keep up with the health and hygiene standards, to produce safe and environment friendly products, and to prohibit usage of perilous and noxious materials in their manufacturing. She insisted to comply with the standards so as to meet the needs of the buyers in qualitative ways, not just focusing on the quantity. The other major reason is to make smooth and hindrance-free exports in future. 28 MAJOR EXPORTING DESTINATIONS The Major buyers for Handicrafts (other than carpets) are as under: Art Metal wares: U.S.A., Germany, U.K. 29 Wood Wares: U.S.A., U.K. 30 Hand Printed & Textiles & Scarves: U.S.A., U.K. , Germany & Canada 31 Embroidered & Crocheted Goods: U.S.A., Saudi Arabia, U.K., Germany 32 Shawls as Art wares: Saudi Arabia, U.S.A. Japan & U.K 33 Zari &Zari Goods: USA, UK, Germany, France 34 Imitation Jewelry: USA, UK, Italy, Germany 35 36 PROVISIONS IN FOREIGN TRADE POLICY The FTP has identified certain thrust sectors having prospects for export expansion and potential for employment generation. These thrust sectors include: (i) Agriculture; (ii) Handlooms & Handicrafts; (iii) Gems & Jewellery; and (iv) Leather & Footwear. Accordingly, specific policy initiative for these sectors has been announced. For the handlooms and handicraft sector: • • • • Enhancing to 5 per cent of Free On Board (f.o.b) value of exports duty free import of trimmings and embellishments for handlooms and handicrafts; Exemption of samples from countervailing duty (CVD); Authorizing Handicraft Export Promotion Council to import trimmings, embellishments and samples for small manufacturers; and Establishment of a new Handicraft Special Economic Zone. ANALYSIS OF THE FOREIGN TRADE POLICY 2009- 2014 ANNOUNCED ON 27.08.2009 WITH REFERENCE TO HANDICRAFTS EXPORTS: Foreign Trade Policy 2009-2014 was announced by Hon’ble Minister of Commerce and Industry on 27th August, 2009. The major highlights of the FTP is placed at Annexure I. A special thrust has been given to labour intensive handicrafts sector which is witnessing job losses in wake of the recession. A brief analysis on the provisions made in the new FTP in particular with the handicraft sector are placed below: PROVISIONS SPECIFIC TO HANDICRAFTS SECTOR 1. Three handicrafts clusters provided status of ‘Towns of Export Excellence’(TEE) (New Provision) Jaipur, Srinagar & Anantnag have been announced as Towns of Export Excellence for the handicrafts sector. This would enable up gradation of infrastructure and would provide incentives and focus support. 37 2. All handicrafts exports to be treated as ‘Special Focus Products’ and entitled to 5% duty credit scrip as per S. No. 1B (vi) (g) of the new Foreign Trade Policy. (New Provision covering all items of handicrafts – however, a limited number of items were earlier covered under VKGUY) All handicrafts exports would now be treated as ‘Special Focus Products’ and entitled to higher incentives as per Sl. No. 3.15.2 . Special Focus Products covered under Table 2 & Table 5 of Appendix 37D, shall be granted i.e. duty credit scrip equivalent to 5% of FOB value of exports w.e.f. 27.08.2009. 3. 43 items added to the ‘New Special Focus Products’ list. EPCH had requested for inclusion of all handicraft for focused promotion by way of higher incentives. The O/o DGFT under the New Foreign Trade policy has now included 43 additional items as ‘New Special Focus Products’ including Handicrafts items not elsewhere specified. The efforts have yielded good results. These 43 items appears in Table No. 5 of Appendix 37D of the new Handbook Book of Procedures Vol-I. They shall be entitled to duty credit scrip @ 5% of fob value. The handicraft items not elsewhere specified are now also eligible under “New Special Focus Products’ scheme as per entry No. 43 of Table 5 of Appendix 37D of Handbook of procedures. Earlier only selected items were eligible for the same. This entry will cover all new and innovative handicrafts items. Export Promotion Council for Handicrafts shall now certify that the exported product is a handicrafts product, if any doubt arises. 4. EPCG at zero custom duty for Technological Upgradation. The recommendation of EPCH to reduce the custom duty on EPCG (Export Promotion Capital Goods) from 3% to 0% has been accepted. Now EPCG shall be available at 0% custom duty for handicrafts sector .The export obligation shall be six times of the custom duty saved to be fulfilled in six years. The scheme shall be in operation till 31.03.2011. 5. Status holder to get duty credit scrip. 38 To accelerate exports and encourage technological upgradation, additional Duty Credit Scrips shall be given to 3 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. This facility shall also be available for handicrafts. This facility shall be available upto31.3.2011. All status holders will get duty credit scrips at the rate of 1% of the value of past exports. The duty credit scrips can be used for procurements of capital goods but subject to actual user condition. 6. Support for Green products and products from North East Focus Product Scheme benefit extended for export of ‘Green Products’; and for exports of some products originating from North East. 7. MDA/MAI 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. GENERAL PROVISIONS MADE IN FTP INCLUDING HANDICRAFT 8. 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%. 9. Market Linked Focus Product Scheme (MLFPS) Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusion of products classified under as many as 153 ITC (HS) Codes at 4 digit level. Some major products include; Pharmaceuticals, Synthetic textile fabrics, value added rubber products, value added plastic goods, textile madeups, knitted and crocheted fabrics, glass products, 4certain iron and steel products and certain articles of aluminum among others. Benefits to these products will be provided, if exports are made to 13 identified markets 39 (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand). 10. DEPB To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010. DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a consumable in Standard Input-Output Norms. 11. 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. 12. EDI To further EDI initiatives, Export Promotion Councils/Commodity Boards have been advised to issue RCMC through a web based online system. It is expected that issuance of RCMC would become EDI enabled before the end of 2009 40 CHALLENGES FOR EXPORTER THE incidence of non-tariff barriers in the Western markets is one of the major constraints facing Indian handicraft exports, according to a study undertaken by the Exim Bank. The Exim Bank's latest Occasional Paper on 'Indian handicrafts: A new direction for exports,' states that European nations are sensitive to toxic substances such as cadmium and azodyes, which are prohibited. Though exporters are aware of these barriers, at the supplier level, there could be a tendency to ignore them. Exporters also complain of impediments in the form of procedural delays at customs, disputes in nomenclature and duty drawback calculation. Other Major Problems are: • • • • • • • • • • • • • • • Inspite of having diversified products, some part of Indian market is still untapped and market is price sensitive. Products are high priced in big and metro cities, which are beyond the 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 It is difficult to balance the cultural and commercial value of handicraft products. Inadequate supply chain management and distribution reduces the sector’s commercial viability and economic sustainability. Lack of Technological support and training. Lack of Research and development for key handicraft sectors like, ceramics, paper making etc. 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 material testing and performance measurement. Inappropriate energy supplies to rural and sub-urban areas. Untapped and inaccessible market due to poor transportation infrastructure. There are inadequate training centers to develop skilled craftsmen. 41 QUALITY STANDARD InternationalStandards 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. AHPADA supports the fulfillment of its objectives through the sharing of ideas, know-how, experiences, resources and expertise in the region for the preservation and the development of craftspeople, and in promoting quality craftsmanship. At the same time, AHPADA supports the development of crafts through different training initiatives, the establishment of crafts businesses related to cultural tourism, and the vocational training of youth and handicapped people. The Seal of Excellence was jointly created in 2001 by UNESCO and the ASEAN Handicraft Promotion and Development Association in order to establish standards of quality and to enhance international market awareness of craft products from the participating countries. Since then, the SEAL witnessed a continuous increase of submissions and of recognized products. In the light of this growing interest, UNESCO decided to extend the SEAL to South Asia and Central Asia. The extension has been carried out so far in partnership with craft organizations such as CACSA and the World Crafts Council-Asia DomesticStandards Currently, there are no quality standards applicable to handicrafts. This is not a very healthy situation from the viewpoint of the supplier as well as the buyer. There could be suppliers who take advantage of the situation and supply low quality products, thereby tarnishing 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 : For quality as well as quantity/ proportions in which they may be used. This would involve identifying and nominating authorized suppliers. 42 • Process : Standardization of processes, to the extent possible, for each category. This could be for machinery, place of operation, skill level of the artisans, etc. Production : It is essential to impose a certain degree of mechanization to achieve certain minimum standardization levels. It also ensures adequate supplies and helps keep delivery schedules. Finish : Quality standards for the finish in handicrafts is one of the hardest things to impose because the parameters for evaluating the finish of a product are highly subjective. However, it is also very critical because ultimately, the buyer evaluates the product based on its finish. This can be done only after a prototype for each product is developed, and the finished product is weighed against this prototype and rated accordingly. Packaging : It is essential to stipulate standard packaging material, per the category, to make the products more presentable and hence, more competitive. • • • In view of the variety of handicrafts available, development & imposition of any kind of standards would be a difficult and lengthy exercise. However, if India is to compete in the world market, quality standards will have to be set and maintained. 43 Need of the Moment : IPRs & Branding for Indian Handicrafts Handicrafts sector is extremely significant in Indian context. Whether it is contribution to exports, employment and income generation for a huge number of people, or its role in preserving the rich intangible cultural heritage, handicrafts are a vital component of our rural and national economy. The whole potential hasn’t been exploited so far. The export and tourist market for these products cannot be ignored. But, leave alone being able to make the most of this potential, Handicrafts industry is in dire straits and most of the artisans & craftspersons are not even able to make both ends meet. More so in the recent recession scenario resulting in massive fall in exports and loss of employment for communities involved. Among the many problems, that of fakes or non-genuine “ethnic Indian products” flooding the markets is eating into its potential. There’s a huge array of such machine made fakes, being produced in places other than India but using the ethnic brand value of the original ‘Indian handmade’ products. The biggest threat comes from China. These duplicate products are machine made, with copied Indian designs, more attractive and priced much lower than the original ones. Their quality standard too is higher. The main drawbacks of the traditional Indian handicrafts products being lack of any standardized quality, lack of innovation in terms of products, designs and utilitarian value as per the changing fashion trends, fluctuating customer tastes and acceptable universal norms. Also lack of awareness and training on various critical issues at the craftsperson’s level and their inability to extract premium prices for these products on the USP of being ‘Hand Crafted’ is worsening things. Absence of an organized structure, focused approach and coordinated effort for brand promotion of these products is resulting in lack of motivation on the part of the artisans themselves, as they too see no future in continuing this practice since they cannot sustain their families on their crafts. 44 This situation can be dangerous as this sector is very crucial for India not only in terms of exports or employment but also for conserving the country’s rich crafts traditions. One approach to begin with could be the use of the Intellectual Property mechanism of “Geographical Indications” (GIs) to protect peculiar products from particular regions. GIs are a very appropriate legal tool protecting ‘regional products’ owing their characteristics & uniqueness to their origin. Moreover they offer the much needed “collective benefit” by protecting the community’s rights over their cultural expressions, thus providing the desired “common branding” to such products. GIs will benefit these handicrafts as they’ll prevent misuse & exploitation of the ‘regional brand name’. Whether it’s China or anyone else, they’ll not be able to free ride on the brand equity of the ethnic product. For instance now they won’t be able to use the tag of registered and protected GIs such as “Kutch embroidery” or “Pashmina Shawl” or “Banarasi Silk”. But along with GI registration one may also look at protecting the overall brand “India” in international markets. Alongside the regional GI tag, one can have a ‘Handcrafted in India’ kind of a tag too. This will do two things. One, provide an authenticity label that the product is genuinely handcrafted and from the region mentioned and second, it is actually from India and not China or anywhere else. “Made in Switzerland” brand is an example. Apart from being fair to the producers of original handicrafts, their rightful rights and deserving commercial gains, it will also be fair on the unsuspecting consumers who most often are mislead into buying cheap duplicates. 45 SWOT Analysis of the Indian handicrafts industry Strengths • 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 Threats antiquity • Hand made and hence has Decline in India’s few competitors share • Variety of products which due to: are unique • Exporters willing to handle Better quality products small orders produced by • Increasing emphasis on competitors product development and from Europe, design upgradation South Africa, South Asia, etc. Better terms of trade by competing countries Consistent quality and increasing focus on R&D by Weaknesses competing countries • Inconsistent quality Better packaging • Inadequate market study Stricter international and marketing strategy standards • Lack of adequate infrastructure and communication facilities • Capacity to handle limited orders • Untimely delivery schedule • Unawareness of international standards by Opportunities • • • • • 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 46 many players market in the BIBLIOGRAPHY EPCH, Export Promotion Council for Handicrafts (HEPC).About us, http://www.epch.in/Default.aspx, Accessed on 20th dec 2010. Highlights of the Annual Supplement 2010-11 to the Foreign Trade Policy 2009-14, (updated in 2010) ,http://www.eximpolicy.com/new_eximpolicy_highlight.html Indian handicraft export, http://business.mapsofindia.com/ruraleconomy/handicraft-industries/ http://www.epch.in/Circulars/Circulars/EPCH_Annual_Report_200 9-10.pdf Provisions in Foreign Trade Policy, http://www.epch.in/Circulars/Policies/AnalysisCircular.pdf, Accessed on 17th Jan 2011 47 Handbook Of Procedures: Tables Special Focus Products: 48 49 50 51 52

Name of InstitutionGROWTH PROSPECTS OF THRUST AREAS OF INDIAN

Author(s) NameGiulia Macola

Added/Updated byGiulia Macola



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