Indian textile & Handicrafts

industry is the largest

employment generator after
agri: Ajay Tamta

The minister of state for textiles Ajay Tamta categorically stated the textile & handicrafts
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 said at an ASSOCHAM event.

Indian textile & Handicrafts industry constitutes an important segment of the Indian
economy as it is one of the largest employment generators after agriculture. The sector
employs about 7 million people directly and indirectly, which include a large number of
women and people belonging to the weaker sections of the society, said Mr Tamta,
Minister of State for Textiles.

Handlooms & Handicraft and women, both the terms have their individual identity and
the fruitful amalgamation of both gives them a more meaningful identity. These
industries are a major source of income for rural communities in general and for rural
women in particular. Though a large number of female workforce, both urban and tribal,
from all sections of the society are involved in appropriate returns for their efforts, said
Mr. Tamta. The joint study released by ASSOCHAM-Resurgent on 'Women in Textiles &
Handicrafts Industry' reveals that the market size of India's textile market is expected to
touch $250 billion in the next two year

The textile sector in India accounts for 10% of the country's manufacturing production,
5% of India's GDP, and 13% of India's exports earnings. Textile and apparel sector is
the second largest employment provider in the country employing nearly 51 million
people directly and 68 million people indirectly in 2015-16, adds the study.
Indian Handicrafts Industry & Exports
KEY MARKETS AND EXPORT DESTINATIONS

Handicraft exports from India increased by 1.65 per cent year-on-year during April-
November 2018 to US$ 2.42 billion. During this period, the exports of various segments
registered positive growth like Shawls as Artwares (77.50 per cent), Woodwares (23.57
per cent), and Miscellaneous Handicrafts (19.74 per cent).
Indian handicrafts are exported across geographies, with the top 10 destinations being
the US, the UK, the UAE, Germany, France, Latin American countries (LAC), Italy, the
Netherlands, Canada and Australia.
Recent Developments
Government of India increased incentive rates under the Merchandise Export from India
scheme (MEIS) to 7 per cent from 5 per cent for handicraft items which will help
exporters to recover the input costs which are involved in the production of handicrafts,
which will also lead in competitive pricing and also boost exports.

EXPORT PROMOTION COUNCIL FOR HANDICRAFTS

The EXPORT PROMOTION COUNCIL FOR HANDICRAFTS (EPCH) is the apex
government body and operates 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 its promotional activities.
 5 factors depleting the Indian handicraft
industry
 SECTOR WATCH
 SEPTEMBER 22, 2016 / 6 MIN READ
Instead of higher potentialities, the sector is suffering from the acute
decline in export business. Below are difficulties Indian artisans are
facing.
Indian handicrafts and traditional crafts showcase the rich heritage
and true culture of our nation. With beautiful designs, the artisans
carry a legacy of their land, myth, culture and carve their art into
forms that can be forwarded to generations. Indian artisans were
highly regarded and rewarded until the outbreak of 19th century
industrialization. However, the Indian Government, since
independence has implemented various plans to secure this sector, the
industrialization has been continued to affect artisans. Technological
advancement is also a major reason behind the reduction of
handcrafted products into machine made products that cost a little
less as compared, this as a result taking Indian handicrafts industry is
on the verge of extinction.
On the other hand, the contribution of Indian handicrafts cannot be
neglected. The industry has offered employment to a large number of
artisans from generation to generation.
Processing and procuring raw materials:
Earlier, raw materials used by artisans were largely accessible due to the close links
between the evolution of crafts and locally available materials. Further, the Jajmani
system, which mainly comprises artisanal caste and the village community to supply
goods and services; offered artisans with access to community resources. Over the
time, this traditional structure has been broken down along with competition from
organized industry; artisans find it difficult to buy quality raw materials at a price they
can afford to pay.
Aggregation and mediator trade:
The process of aggregation involves bringing products from decentralized units with
aim to enable economies of scale in transportation, storage, and retail. Due to the
dull status of infrastructure and lack of communication in the country, aggregating
the product is a difficult job to do.
Production:
The techniques and the process of crafting vary from one craft to another; the
production takes place in households, with all the family members get engaged in
various aspects of the process. Even though there are organized artisans structures
exist, those craftsmen typically produce within community settings.
Markets:
The market for hand crafted products can be understood as local, retail shops –
high-end as well as mainstream, exhibitions and exports. Out of all these, local
markets are still the most common market for many artisans. The new age markets,
national as well as international, have grown with an expanding demand for products
that have a story linked to them.
Demand:
With the beginning of globalization and the availability of more affordable and varied
products, the market is facing severe competition in the global market. These
products are typically perceived as traditional, old-fashioned and antithetical to
modern tastes. There have been lesser efforts made in order to reposition the image
of handicrafts in India and build customer appreciation of the history and cultural
identity associated with these products.
INDIAN HANDICRAFT INDUSTRY
KEY FACTS OF INDIAN HANDICRAFT INDUSTRY

 India’s rich cultural diversity and heritage provides a unique and huge resource for
developing craft products.

 Handicrafts industry is one of the important segment of decentralized sector in India.

 According to the national census of handicrafts, undertaken by the NCAER the value of
handicrafts produced last year were of Rs.26,213 Crore.

 Provides huge employment opportunities to artisans that include women and people
belonging to backward and weaker society (6 million artisans).

 India’s contribution in world market is 1.2%

 The total exports of crafts items: - Rs. 13412.92 Crore.

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

HANDICRAFT ITEMS

 Metal ware

 Wood ware

 Hand printed textiles,

 Embroidered goods & Shawls

 Carpets

 Bamboo products

 Zari goods

 Imitation jewellery

 Paintings & Earthenware

 Jute products

 Marble Sculpture

 Bronze Sculpture

 Leather Products

 Other miscellaneous handicrafts

OPPORTUNITIES

 Rising demand for handicraft products in developed countries such as USA, Canada, Britain,
France, Germany, Italy etc.

 Developing fashion industry requires handicrafts products.

 Development of sectors like Retail, Real Estate that offers great requirements of handicrafts
products.

 Development of domestic and international tourism sector.

 E-Commerce and Internet are emerged as promissory distribution channels to market and
sell the craft products.

THREATS

 Competition in domestic market.

 Balance between high demand and supply.

 Quality products produced by competing countries like China, South Africa.

 Better Trade terms offered by competing countries.

 Increased and better technological support and Rand D facility in competing countries.

E-Commerce

 The entire e-commerce process requires meticulous and well-informed planning to succeed.

 Businesses need to look beyond issues such as what products and services to offer, how to
design and maintain a portal, and how to handle security issues

 E-commerce can be divided into primarily three categories

 1. Business to Consumer (B2C)

 2. Business to Business (B2B)

 3. Business-to-government (B2G)
India’s Edge

 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.

 On Left Side graph showing the increase in growth of products:

Study by ASSOCHAM

 India’s handicrafts exports are likely to cross Rs 17,000 crore mark by the end of current
fiscal year of 2015-16 and is further expected to cross Rs 24,000 crore mark by FY 2020-21.

 Promotion methods like building brand image, conducting road shows and craft festivals in
target countries and also point of sale publicity through attractive display and banners
together with marketing tools like innovative and appealing packaging need to be
extensively used by the Govt and other councils.

 The Government in partnership with private sector needs to encourage integrated

enterprise development by providing supporting services such as local centres for skill
training, product adaptation, vocational training and entrepreneurship development.
Press Release:

Handicrafts Market: Global Industry Trends,

Share, Size, Growth, Opportunity and Forecast
2019-2024
The global handicrafts market was worth US$ 583.4 Billion in 2018. Handicrafts
refer to products that are handmade using simple tools and represent the culture and
traditions of a country or region. Their production requires considerable hand-eye
coordination and intense concentration. Each handcrafted product is unique as each
craftsperson applies their strength differently, owing to which every product has
distinct qualities. Handicrafts play a vital role in the economic development of a
country as they are a prominent medium for foreign exchange revenue, require low
capital investments and offer employment opportunities. In addition, handicraft items
are perceived as a symbol of status owing to their uniqueness, quality, usage of
natural materials, and the essence of vibrant art and culture.
In recent years, with the emergence of online retail and the proliferation of various e-
commerce channels, the accessibility to handicrafts has become more convenient for
consumers. This has provided a boost to the sales of handcrafted goods across the
globe. Another factor driving the market growth is the shift from ethnic to
contemporary designs, coupled with the strong demand from offices, hospitals and
hotels. Apart from this, the growing travel and tourism industry has provided vast
opportunities to local artisans and handicraft manufacturers to produce commoditized
products and sell them to tourists who are willing to spend significantly on souvenirs
and other craft items. Moreover, handicrafts have lower energy requirements, unlike
machine-made products which involve the utilization of electricity and various other
fuels. On account of the low capital investments, the industry is flourishing,
particularly in the developing regions such as India, China, and Afghanistan. Looking
forward, IMARC Group expects the market to reach a value of US$ 1091.2 Billion by
2024, expanding at a CAGR of more than 11% during 2019-2024.

On the basis of the product type, woodware currently represents the most
popular type of handicraft products across the globe. These woodwares are
also used in the manufacturing of kitchenware, decorative materials, toys, etc.

Breakup by Distribution Channel:

Breakup by End Use:

 Residential
 Commercial

At present, the residential sector dominates the market and is further

categorized into home accessories, furniture, jewelry, home textiles and
others.