India’s handicraft exports size has shrunk in FY 2022-23 with a Y-o-Y decline of 20%. This de-growth is attributed to both international and domestic factors. IBT examines various reasons behind the dip in demand for handmade items and shrinking export size, and possible interventions to revive the sector’s fortunes.
Photo Source: Pexels
New Delhi, April 13: Indian handicrafts are the embodiment of the country’s culture and traditions. The expertise of Indian craftsmen spans a wide range of items – antiques, art, baskets, paper mache, ceramics, clock making, embroidery, block printing, decorative painting, glass work, fabric, furniture, gifts, home décor, jewellery, leather crafts, metal crafts, paper crafts, pottery, puppets, stone and wood works, and each carries a legacy of its own.
The handicrafts sector plays a significant & important role in the country’s economy. It provides employment to a vast segment of the craftsperson in rural and semi-urban areas and generates substantial foreign exchange for the country while preserving its cultural heritage. Moreover, handicrafts have great potential, as they hold the key for sustaining not only the existing set of millions of artisans spread over the length and breadth of the country but also for the increasingly large number of new entrants in the crafts activity.
However, India’s handicraft exports are currently facing some serious challenges, having witnessed a significant decline in FY 2022-23. According to a data release by the Export Promotion Council of Handicrafts (EPCH), the demand for handmade items is dipping and so is the export size. Total handicraft exports, including artmetal wares, woodwares, embroidered goods, zari goods, agarbatties and miscellaneous items, have registered a negative growth during the previous fiscal.
Speaking exclusively with India Business & Trade (IBT), Rajkumar Malhotra, Chairman, EPCH, explained that one of the main causes of the decline in exports is the war in Ukraine, followed by global recession, which has weakened consumer sentiments. The apex body’s chairman also said that with recession posing a continued threat, consumers are spending less on non-essential and luxury items.
“There is uncertainty with Russia-Ukraine war, as to when it will be over and what impact it may leave. So, the buyers are storing items only to a limited extent. If we have to speak of the consumption trend, handicrafts are the last priority, since these are gift items. These aren’t consumer items. So, this has also impacted handicraft sector,” he explained. The other hindrance, according to the EPCH chairman, is the visa application, due to which exporters are unable to take their products to international markets. “In some countries, it take 1 to 1.5 years to get a visa, whereas in Germany, the waiting period could go up to several months. Every manufacturer has his own reasons.”
India’s exports of handcrafted/handmade items
Source: Export Promotion Council of Handicrafts
Handcrafted furniture of some of popular hubs like Jodhpur is no longer part of the handicraft sector. In 2022, the central government changed the HSN code of furniture and shifted the items from EPCH to Capexil. Although, its effect is not visible yet, it has lowered overall handicraft exports numbers. India’s exports of wooden furniture are valued at approximately Rs. 5,000-6,000 crores. Wooden furniture, previously categorised under handicraft, has fine work of ingraving and wood carving by artisans.
During COVID-19 pandemic, online sale of handicrafts grew manifolds. When people were spending more time indoors, there was the urge to buy handicraft items as decorative items for personal consumption. As per data of 2021-22, the export size stood at US$ 4,459.76 million. Although there was a robust demand of artisans products, shortage of containers caused delay in shipment of the products.
Source: Export Promotion Council of Handicrafts; Figures in US$ million
“Once the product did reach their destination, it created a massive pile on in the warehouse. Many handicraft products did not reach the market on time such as the festive season. This also led to drop in demand of handcrafted products. So, till the time old products have been sold off, new items will not be bought in. Though the container issue has been resolved, its after-affects continue to dampen the export spirits,” he said.
While demand of handicraft products has declined in the US and UK, certain items such as metal-based handicrafts and furniture have increased in Middle Eastern countries. In particular, demand for artisan furniture and metalware is higher. The industry is enthused, however, with the announcement of Moradabad and Varanasi as Towns of Export Excellence, which is expected to boost their handicraft clusters, making them eligible for enhanced financial provisions for marketing, capacity building and infrastructure under various government schemes.
Ease in recession will once again lead to pent up demand of hand-made products, since developed nations are ready to open the doors for Indian handiworks. However, the current situation merits engagement and timely interventions by policy as well as industry. Some of the recommendations put forth by the EPCH chairman are:
Besides this, e-commerce is being visualised as a major potential catalyst for India’s exports, with an expected size of US$ 200-300 billion by 2030. Additionally, FTP 2023 increased the value limit for exports through courier service from Rs. 5 lakh to Rs. 10 lakh per consignment. Sustained efforts towards getting handicraft exporters on e-commerce platforms, and ensuring they are able to leverage their benefits optimally, will provide much needed growth avenues for the sector going forward.
E-Commerce as announced in FTP 2023 will give a further boost for export marketing of handicrafts.
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