Term paper presentation on

Trend analysis and problems & solutions of

export of Indian handicraft industry

INTRODUCTION

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.”

Handicrafts are made from raw materials and can be produced in unlimited numbers. Such

products can be utilitarian, aesthetic, artistic, creative, culturally attached, decorative, functional,

traditional, religiously and socially symbolic and significant.

INDIAN HANDICRAFT INDUSTRY:

The Handicraft Industry is one of the important productive sectors. Various attempts

have been made to define this broad and diversified industry. Crafts are unique expressions that

represent a culture, tradition and the heritage of a country. India is well known for its exotic crafts

legacy and tradition. It is the land of art and crafts, a country of rich culture, history and traditions.

1. Industry is playing a major role in the development of Indian

economy.

2. As per the latest updates, there are more than 23 million

craftspeople in India today engaged in the growth of Indian

handicrafts industry.

3. Second largest employment sector in India, just after Agriculture

63% of exports turnover. The industry is spread allover the country

mainly in rural and urban areas.

4. Most of the manufacturing units are located in rural and small

towns, and there is huge market potential in all Indian cities and

abroad.

Export Promotion Council for Handicrafts

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, Government of India. EPCH has the distinction of being considered a 'model council', a self-sustaining body that self-finances all promotional activities.

Export Promotion Council for Handicrafts (EPCH) was established under Companies Act in the year 1986-87 and is a non-profit organization, with an object 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 country and projected India's image abroad as a reliable supplier of high quality of handicrafts goods & services and ensured various measures keeping in view of observance of international standards and specification. The Council has created necessary infrastructure as well as marketing and information facilities, which are availed both by the members exporters.

Basically 9 handicraft items are mostly exported from India that are metal ware,

wood ware, hand-printed textiles, hand-knotted and embroidered textiles,

leather goods, stoneware, carpets and floor coverings.

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

year. Handicrafts industry is one of the important segments of decentralize

sector in India.

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.17970.12 Crore.

India’s contribution in world market is 1.2%.

The total exports of crafts items: - Rs. 23504.42 Cr.

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

Need of study

Handicraft of India reflects its culture and the rich ancient

heritage. But this decentralized industry though contributes a

large part to Indian exports but this industry has quite a number

of problems which is still hidden from the eyes of industrial

development agencies. Therefore this study is needed to unblind

the various problems and solutions to this industry.

Objective

To know the reason responsible for export performance .

To study the performance of handicraft export from India.

to study the handicraft export form Agra & future prospects.

States and its items

Region/ZONAL state Items

east West Bengal, Orissa, Bihar and Jharkhand Terracotta crafts, clay crafts, jute crafts,

leather crafts, conch shell crafts and

kantha-stitch` craft marvelous glassworks, carpet

weaving crafts, lacquer crafts and stone crafts.

Appliqué work, `Patachitra, wood carvings and

metal crafts.

west Gujarat and Rajasthan gota,pichwai, Nathdwara,Saurashtra

Pottery crafts, woodwork, brass and metal work,

crochet embroidery, bamboo craft, fiber craft,

batik prints and metal embossing.

north Jammu and Kashmir, Himachal Pradesh, Punjab,

Haryana, Uttaranchal and Uttar Pradesh

carpets -weaving, metal crafts, furniture making

and wood carvingphulkar crafts, shawls of

Chamba, Textiles, woodcarvings, carpet making

and pottery.

south Karnataka

Tamil Nadu

Andhra Pradesh

. Kerala

woodcarving, ivory carving, `kasuti embroidery

Pottery and `Cheennapatna` toys. Papie mache,

stone craft,, woodcraft,bidri crafts, embroidery

crafts known as `banjara needle craft`,

wood crafts, bamboo crafts and ivory crafts.

Major Crafts and its Markets

Major Crafts Major Markets

1.Hand Knotted Woollen Carpets Germany, USA, Switzerland, U.K, Italy, Canada, Holland etc.

2.Art Metal Wares Germany, USA, U.K, France, Saudi Arabia, Canada, Italy etc

3.Hand Printed Textiles and Scarves Germany, USA, U.K, Canada, Japan etc.

4.Embroidered And Crocheted Goods USA, U.K, Japan, France, Saudi Arabia etc.

5.Wood Wares Saudi Arabia, Germany, USA, Japan, France etc.

Major Markets for Indian Handicraft

U.K, 11%

OTHER, 22%

AUSTRALIA, 2%

CANADA, 3%

FRANCE, 5%

GERMANY, 11%

ITALY, 4%

JAPAN, 4%

NETHERLAND 3%, 3%

SAUDI AREBIA 2%, 2%

SWITZERLAND 15, 1%

U.S.A, 32%

% share U.K

OTHER

AUSTRALIA

CANADA

FRANCE

GERMANY

ITALY

JAPAN

NETHERLAND 3%

SAUDI AREBIA 2%

SWITZERLAND 15

Export Performance of 5 years

0

5000

10000

15000

20000

25000

2008-09 2009-10 2010-11 2011-12 2012-13

Export (handicraft) from india

Export (handicrapt) in india

YEARS Export (handicraft)

2008-09 8718.94

2009-10 10533.96

2010-11 12975.25

2011-12 17970.12

2012-13 23504.42

Comparison of Total Export and Handicraft

Industry

0

50000

100000

150000

200000

250000

300000

350000

2008-09 2009-10 2010-11 2011-12 2012-13

Export (allindia)

Export(handicrapt)

YEAR EXPORT FROM INDIA

(TOTAL)

EXPORT

(HANDICRAFT)

2008-09 178751.4 8718.94

2009-10 251135.9 10533.96

2010-11 304623.5 12975.25

2011-12 300274.1 17970.12

2012-13 230171.03 23504.42

Comparison of growth rate

0

50000

100000

150000

200000

250000

300000

350000

2008-09 2009-10 2010-11 2011-12 2012-13

Export (all india)

Export (handicrapt)

growth

YEAR Export (all India) Export (handicraft) Growth

2008-09 178751.4 8718.94 4.88%

2009-10 251135.9 10533.96 4.20%

2010-11 304623.5 12975.25 4.26%

2011-12 300274.1 17970.12 5.98%

2012-13 230171.03 23504.42 10.21%

Trend analysis of Indian export last 5 years

YEARS EXPORT IN CRORES

(HANDICREFT)

X=5298.y+2007

2008-09 8718.94

8183.12

2009-10 10533.96

13481.12

2010-11 12975.25

18779.12

2011-12 17970.12

24077.12

2012-13 23504.42

29375.12

(x=5298.y+2007) R2=0.55

The coefficient of determination (R2) 55% was found in the above

model, which means that 55% variation in the dependent variable was

explained by the independent variable.

The figure shows that from 2006 to 2008 the exports show the

decreasing trend.

The decreasing trend is the cause of the global meltdown, now from

2013 onwards it again shows the upward trend which is favorable for

our economy.

In the above figure the growth shows a fluctuation nature, in 2007-08

the growth rate of exports are 4.88%, now it is 17.25% in 2013-14.

Between this long spell of time sometimes it shows more fluctuation

and some time it go smooth.

Problems

Credit availability

Problem with raw material supply

Shortage of skilled labour

Design and marketing

Delivery problems

Overdependence on established market

Solutions

Handicraft micro loans

Raw material houses

Training

Handicraft institutions

Professional marketing personnel

Government initiatives

As Indian Handicraft Industry contributes very important role in Indian

economy. Hence For the proper functioning and operation of industry

govt. Has made some policies and regulation. In India, the Ministry Of

Textile is responsible for the formulation of policy, planning,

development, export promotion and regulation of the Handicraft

Industry. Some policies & rules are as follows:

There are no restrictions regarding location for establishing

manufacturing units.

All producers of handicrafts are exempt from obtaining Industrial

License to manufacture.

The diligence undertakings, however, are required to file an

Industrial Entrepreneur Memoranda (IEM) in Part 'A' with the

Secretariat of Industrial Assistance (SIA), and obtain an

Research methology

DATA COLLCTIONS:This research paper is descriptive and investigative, based on secondary data only. The necessary secondary data has been composed from different old research papers, eBooks, internet, some of the governmental data etc.

Presentation Tools:Pie chartTables

Diagrams

Statistical tools:

Regression

Time series

Correlation

FINDINGS

In small units (i.e. turnover less then 10cr.) 14% units go for outsourcing.

Handicraft Industry of Jodhpur is one of the biggest industries of India dealing in

export With a yearly export of more than 1000 Cr.

This industry is not investing in machinery even after knowing that the main concept

behind success in this industry is bulk supply and this is the point where other

countries exceeds.

most of the exporters are not going for marketing and even if any firm is going then

also they are sending only their relatives there instead of any professional.

Suggestions

For the sustainable growth of the handicraft industry advertisement both at national and

international level should be undertaken publicity, exhibition, printing of brochures and

participation in fairs will help in boosting this traditional industry.

Government should set up well organized handicraft marketing system so that both

producers and consumers would reap more and more benefits. In the absence of well

organized market both consumers and producers are exploited.

Government should exempt or at least the sales tax on handicrafts which will result in the

price of handicraft products and thereby increase the sales.

Foreign master designers may be invented to design centers to render guidance to the

craftsman.

Uniformity in price is also an important tool for the growth of this industry. The customers

feel that they were exploited and get harassed when they purchase the same handicraft

product from two shops at different prices.

Conclusion

Handicraft Industry of India is one of the major exporters. Although looking at the

trend of export figures we Can see a distinct growth in this industry button the other

hand looking at the potential of the Market this growth is not satisfactory,. The total

export of handicraft from India that is around 10000 Cr. shares is only 10%. The

main observations of our study are some issues like –

1. Labor problem

2. Unwillingness towards investment in machinery,

3. Inability to participate in foreign trade fairs

Although there are a number of factors that hinders the growth but these are some

of the most important factors, If Handicraft Industry will go for mechanization or at

least start participation in foreign trade fairs it will raise exports figures much higher

Future Prospect

The dynamism of handicrafts industry in India is unparalleled - be it the traditional

Indian arts and crafts or a customized version of an overseas art form. Unlike in the

past when the industry was battling to carve a niche in the market, there is a great

demand for Indian handicrafts today that is being nurtured by different government

and non-governmental organizations. The sector is economically important from the

point of view of low capital investment, high ratio of value addition, and high

potential for export and foreign exchange earnings for the country. The industrial

revolution and the increasing productivity had slowed down the growth and the

quality of arts and crafts, but for some decades now, the scenario has changed and

machine-made products no longer attract the people. Presently handicrafts are

being considered as vocational media and it is also opted for style statement and

the leisure pursuit. Today, the crafts and craftspeople have a vital role to play in

modern India – not just as part of its cultural and tradition, but as part of its

economic future.

References

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(1998)

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