Indian Handicraft Sector: opportunities, challenges and growth prospects

India’s handicrafts sector, which enjoys the potential to display one’s mind, soul, traditions and modern outlook, has emerged as one of the most important sectors for the Indian economy. The basic nature of the Indian handicrafts industry is not just labour intensive but also decentralised since it is spread across both rural and urban areas. It is also considered as a key employment-generating industries since many artisans are involved in craft work on part-time basis. Currently, the industry provides employment to more than 6 million artisans, comprising large number of women and people from the economically backward parts.

 

Reports suggest that the present day Indian handicraft sector displays the example of strong linkage between the traditional designs and modern techniques. As the demand for Indian handicrafts have risen considerably in the past few years, the status of this sector has also upgraded.

 

The handicraft sector assumes significance due to various reasons such as low capital investment, high ratio of value addition, robust potential for export and also foreign exchange earnings.

 

 

Opportunities available in Indian handicraft sector

 

Reports suggest that every Indian state comes with their own style of handicrafts that displays distinctiveness. There are ample growth opportunities present in the Indian handicraft sector such as:

 

- Strong international presence/ interest.

 

- Huge trained and skilled manpower base.

 

- Rising export market for quality products across Europe, Latin America and US.

 

- Social interventions and structures.

 

- Traditional knowledge base.

 

- Rising flow of tourists in India. 

 

- Growing disposable income along with the desire to own multi-faceted artefacts.

 

With the onset of globalisation in 1991, India has undergone many changes in different spheres. The worth of Indian handicrafts in the international market was realised when exports successfully crossed Rs 1220 crore in 1990-91 from Rs 10 crore in the mid fifties. It is believed that the forces of globalisation have positively impacted the growth prospects of the Indian handicraft sector.

 

The handicrafts sector has made considerable contribution to the Indian economy via export and its importance can be judged with the increase in employment potential.

 

 

 

Challenges in handicraft sector

 

Although, many domestic companies are positively responding to the global conditions, but the international-domestic combination also comes with considerable multiplicity. Despite the strong growth momentum, the sector also faces various challenges:

 

 

 

a) Originality faces threat: In any market, emphasis is laid on the consumption pattern. When the demand for any product is high, it should be made available even if the social costs are high. This is leading to the development of contemporary artefacts that address the demands of the people. In many respects, contemporary artisans maintain the traditionalism and also simultaneously meet the demands of the international consumers or local tourist market.

 

The real problem comes up when originality is threatened in the very process of innovation.

 

 

 

b) Changing patron-client network: It is believed that in the present market system, the craft industry has seen many vulnerabilities. With the development of the modern market economy, the old patron-client business network is fast declining. The artisans are dependent on middle men and trader entrepreneurs to sell their products.

 

 

 

c) Changing occupation: Reports suggest that majority of the artisans in India is illiterate as they usually do not have formal education. This is forcing many artisans to shift to other professions rather than just sticking to their hereditary occupation.

 

 

 

d) Hand made vs Machine made: Since mass production and rising mechanisation are becoming the norms of the day, handmade products are fast disappearing.

 

 

 

Government intervention to step up growth

 

Despite the adaption of the liberalisation of policies, the handicrafts sector witnesses intervention from government to strengthen productivity. In the Indian constitution, handicraft has been defined as state subject and it is stated that the responsibility of development and promotion of crafts lies with state governments. The central government via developmental schemes plays the role of supplementing their efforts. To strengthen holistic growth of the sector, quite a few generic schemes have been implemented.

 

 

 

a) Marketing Support and Service Scheme: Aims to create awareness about the Indian craft products among the people via marketing events, providing services in the form of entrepreneurship and providing financial assistance to state handicrafts corporations for setting up new shops.

 

 

 

b) Baba Saheb Ambedkar Hastshilp Vikas Yojana: Government hopes to develop the handicrafts sector via the participation of craftspersons. It is implemented through social, marketing and financial interventions.

 

 

 

c) Design and Technology Upgradation Scheme: It hopes to supply modern tools, upgrade the skills of artisans, revival of rare crafts by offering training along with outsourcing.

 

 

 

d) Export Promotion Scheme: It works for the promotion of export of handicrafts with special emphasis on hand-knotted carpets and floor covering. The main components of this scheme are product development, marketing and also welfare measures.

 

 

 

e) Research and Development Scheme: It aims to get feedback on economic, social, aesthetic and promotional aspects of various craft goods.

 

 

 

f) Training and Extension Scheme: It works in the direction of capacity building.

 

 

 

g) Bima Yojana for Handicrafts Artisans: The Yojana provides life insurance protection to the artisans, either male or female who are in the age group of 18-60 years. It is being implemented in association with the Life Insurance Corporation of India ltd (LIC).

 

 

 

h) Special Handicrafts Training Projects: Under this programme, steps are taken to upgrade the skills of existing and also new craftpersons, enhance employment opportunities in the handicrafts sector.

 

 

Apart from the above mentioned schemes, Centre has been taking special steps for strengthening the crafts by popularising the products.

 

Recently, the Export Promotion Council for Handicrafts (EPCH) inked an agreement with Kazakhstan-based Almaty Chamber of Commerce and Industry to raise the Indian handicrafts exports in the Commonwealth of Independent States (CIS) region.

 

 

 

Handicraft clusters in India

 

India houses about 7200 clusters in the traditional handloom, handicrafts and modern small and medium enterprise (SME) industry sectors. Reports suggest that out of these clusters, 2500 estimated are unmapped rural industry clusters.

 

According to the Policy and Status Paper on Cluster Development in India, Foundation for MSME Clusters, the induction of new and modern technology is the need of the hour for the development of the sector.

 

Moreover, most of the Indian clusters, mainly in the handicrafts sector, are small and do not have more than hundred workers. The handicraft exports may reach $3.2 billion in the current fiscal. During 2011-12, the exports touched USD 2.75 billion.

 

As the global slowdown has impacted the demand for handicrafts in global markets, the textile ministry has decided to exert pressure on the policy makers and also corporate India for the fast adoption of steps to enhance the productivity of handicrafts sector. As 40% of the handicraft sector is consumed domestically and 60% is exported, Indian government is hopeful of 18% growth rate in the 12th Five Year Plan.

 

 

 

Conclusion

 

The future course of action for Indian handicraft sector depends various reasons such as economic crisis, labour crunch, lack of government policies. The handicrafts sector wants Centre to comprise the sector under the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS).

 

As India has seen 10% jump in handicraft exports to touch 497 million in August this year, market insiders are of the opinion that exports will pick up pace in India.