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A formal statement of acknowledgement will hardly meet the ends of the justice
in the matter of expression of my deeply felt sincere and allegiant gratitude to
all those who encouraged me and helped me during my study.

It gives me immense pleasure, to express my unfeigned and sincere thanks and

gratitude to Mr. Manoj Mital faculty Onkarmal somani college, jodhpur for
her assistance, advice and support throughout the preparation of this report.

I express my sincere thanks to our beloved principal Prof. N.L.Sahel, for

giving valuable support and encouragement in preparing this report.

I am also thankful to Mr. PRAKASH MAKHIJA for giving me valuable

information regarding his concern.

I am also very thankful to all my respondents who took time out of their busy
schedules and helped me in carrying out this project.



S.No. Topic Page

01. Introduction 1.

02. Handicraft: An overview 5.

03. Handicraft: Key Facts 7.

04. Problems of Indian Handicraft 8.

05. Role of government policies 9.

06. Associations organization 10.

07. EXIM Policy 12.

08. Rajasthan: The Destination of handicrafts 16.

09. Top on the world chart- Rajasthan chart 18.

10. Major distribution channels 20.

11. Value adding chart in handicraft 25.

12. Research Methodology 27.

13. Facts and Finding 36.

14. Analysis and Interpretation 40.

15. Conclusion 55.

16. Recommendation and Suggestions 58.

17. Appendix i

18. Questionnaire ii

19. Bibliography vi

The “ RAJ HANDCRAFTS “ – Manufacture & Exporter of gifts & Handicrafts ( A
government Recognized Export House ) is situated at station road, jodhpur.

The owner of this industry is Mr. PRAKASH MAKHIJA

It is totally an export company. Its position is very good in handicrafts of iron material. And
good position in Rajasthan and India. Total production is depend on designing. This firm’s
products are too good, fine art and attractive antiques.

They are the fast leading Export Company.

When it comes to handicraft exporters in the Suncity. Who can forget raj handcrafts. Which
are into the exports since 2006. The company mainly is into production of Wooden
handicrafts, cup, shield, handicraft, trophy, momento. The company is exporting products to
USA, Canada, Spain, Italy and UK. It is a award winner company,

The main customer for handcraft are

• 1) Forign investor
• 2) high profile person

The handcraft item are mostly useful for gift item.

The raj handcraft have sufficient staff for their three type of work:-
1. factory work
2. Office work
3. logistic work.

The staff for all work are to supportive and Workable at all condition.

At the and I can only give the my gratitude to Mr. PRAKASH MAKHIJA and their staff
for their help andSupport for completing this project work.

Himanshu Tanwar

(B.B.A Final)
HANDICRAFTS : An Introduction

Handicrafts are unique expressions and represent a culture, tradition and

heritage of a country. The Handicraft Industry is one of the important
productive sectors. Various attempts have been made to define this broad and
diversified industry. The following definition strives to cover diversity and
complexity of Handicraft Industry.

Defining Handicrafts:

Definition According to United Nations Educational, Scientific and Cultural

Organization /Information Technology Community (UNESCO/ITC)
International Symposium on “Crafts and the International Market: Trade and
Customs Codification”, Manila, Philippines, October 1997:

Handicrafts can be defined as products which are produced either completely

by hand or with the help of tools. Mechanical tools may be used as long as the
direct manual contribution of the artisan remains the most substantial
component of the finished product. 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.

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.
Indian Handicraft 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. A
wide range of Indian Crafts represents the diversity of crafts tradition in India.
Variety of designs and finishes are available in Indian market that reflects
excellent artistic skills of craftsmen are great in demand globally. India is one of
the important suppliers of handicrafts to the world market. The Indian
handicrafts industry is spread all over the country in rural and urban areas.
Thousands of skilled artisans are engaged in crafts work.

Handicrafts Industry is playing a major role in the development of Indian

economy. This 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 India.
As per the latest updates, there are more than 23 million craftspeople in India
today engaged in the growth of Indian handicrafts industry. Few more details:

• Second largest employment sector in India, second only to Agriculture.

• More than 23 Million craftspeople.

• 63% of exports turnover.

• 9 items dominate exports of handicrafts.

These nine items which have extra edge over other products include art metal
ware, wood ware, hand-printed textiles, hand-knotted and embroidered textiles,
leather goods, stoneware, carpets and floor coverings.
The Importance of Handicrafts:
The Cultural Importance:
Handicrafts play very important role in representing the culture and traditions of
any country or region. Handicrafts are a substantial medium to preserve rich
traditional art, heritage and culture, traditional skills and talents which are
associated with people’s lifestyle and history.

The Economic Importance:

Handicrafts are hugely important in terms of economic development. They
provide ample opportunities for employment even with low capital investments
and become a prominent medium for foreign earnings.

Handicrafts: An Overview
India is a country of rich culture, history and traditions. India is one of the major
producer and supplier of Handicrafts products in the world. India has been
major producer and supplier of handicrafts products since very long time.
Before the industrial development, this art and industry was a potential
economic advantage for the country. During recent years, the importance of
handicrafts has been surged due to their cultural and financial values. The small
scale industries - including handicrafts can play a major role in the development
of the economy of both developed and the developing countries equally. The
90-95% of the total industrial products of the world is produced in small
workshops run by less than 100 people.

For instance, Japan, which is at the peak of the economic development, has
considered 84% of it’s industries as small and medium scale industries. In
countries such as India and China, handicrafts are as high as the mechanized
products in quality and volume, and are a major source of their foreign earnings.
These countries are focusing on the development of handicraft industry, in order
to strengthen the economy. The Indian handicrafts industry is highly labor
intensive, cottage based and decentralized industry. The industry is spread all
over the country mainly in rural and urban areas. Most of the manufacturing
units are located in rural and small towns, and there is huge market potential in
all Indian cities and abroad. Handicraft industry is a major source of income for
rural communities employing over six million artisans including a large number
of women and people belonging to the weaker sections of the society.

The Handicraft sector is highly creative sector and produces large variety of
crafts products. This industry is localized segment of the domestic and
international market. In India the production of craft products are done on both
large and small scale. Because of low capital investment people can start their
business on small scale. Through this flexibility the demand and supply can be
Though Indian Handicraft industry is considered a cottage industry, but it has
evolved as one of the major revenue generator over the years. There has been
consistent growth of 15% over

few years and the industry has evolved as one of the major contributor for
export and foreign revenue generation.

There is huge demand for the Indian Handicraft products in both national and
international market. To match the demand and supply with quality, there is
need to have greater technological support and innovativeness with the
uniqueness in industry.
Handicrafts - Key Facts
• India’s rich cultural diversity and heritage provides a unique and huge
resource for
developing craft products.

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

every year. Handicrafts industry is one of the important segments of
decentralized sector in India.
• Major parts of industry operates in rural and semi urban areas throughout
the country
and has potential Indian and International market with around 67000
exporters to tap the


• 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.26,213 Crore.

• This Industry provides huge employment opportunities to artisans that

include women
and people belonging to backward and weaker society. This is one of the
major source

of income there.

• The Indian Handicraft Industry is a $100 billion industry worldwide.

• 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 %
• In spite of having diversified products, some part of Indian market are
still untapped
and market is price sensitive.
• Products are high priced in big and metro cities, which are beyond, 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 and
there is need
of technological support and training.

• Classification:
Handicrafts industry comprises diversified products portfolio and there is
large variety
available in market. Handicrafts products can be distinguished into
Metal ware, Wood ware, Hand printed textiles, Embroidered and
crocheted goods, Shawls,

Carpets, Bamboo products, Zari goods, Imitation jewellery, Paintings,

Earthenware, Jute

products, Marble Sculpture, Bronze Sculpture, Leather Products and other


Problems of Indian handicrafts
The mass-produced goods are steadily replacing utility items of daily use made
by craftsmen.
Limited public awareness of the cost-effectiveness, functionality and range of
craft products.
The urban consumer does not have access to many of the handicrafts products.
Crafts people are bound in their struggle for survival to money-lenders, traders
or middlemen for

credit and raw materials and they are obliged to sell their products to them at a
minimal price

decreasing their interest towards the traditional arts and crafts.

Women struggling to enter the economic mainstream should be encouraged to
use craft to

become wage earners, provided they are shown how to get access to the market.
Role of government policies
Indian Handicraft Industry contributes very important role in Indian economy.
For the proper functioning and operation of industry it is very essential to have
some policies and regulation in place. In India, the Ministry Of Textile is
responsible for the formulation of policy, planning, development, export
promotion and regulation of the Handicraft Industry. There are several other
bodies and organizations which help to formulate and execute these policies. All
policies should be implemented for the greater development of the whole
industry so that it can help to strengthen the economy.

Industrial Policy:

There are no restrictions regarding location for establishing manufacturing


All producers of handicrafts are exempt from obtaining Industrial License to

manufacture. The delicenced undertakings, however, are required to file an
Industrial Entrepreneur Memoranda (IEM) in Part 'A' with the Secretariat of
Industrial Assistance (SIA), and obtain an acknowledgment. No further
approval is required.
Trade Policy:

Handicraft products fall under the ITC (HS) code 97.

Paintings, drawings and paintings, domestic articles of wood etc. which come
under 9701

Original engravings falling under 9702

Original sculptures categorized under 9703

Products under the code 9704 are freely importable.

Imports of items in 9705 are restricted.

Associations Organisations

All India Handicrafts Board:

The All India Handicrafts Board was originally set up in 1952 to advise the
Government on problems of handicrafts and to suggest measures for
improvement and development. The Board was also required to study technical,
marketing, financial, organizational, artistic and other aspects of handicrafts and
to formulate plans on these lines. Its function also included advice and
assistance to the state Governments for planning and executing schemes for the
development of handicrafts.

State and Union Territories:

Each State and Union Territory has a department looking after the development
and promotion of handicrafts. Many states including, Arunachal Pradesh,
Daman , Diu, Delhi and Goa have public sector corporations for marketing
handicraft products. A few state corporations dealing with small-scale industries
and other products have taken up marketing and export promotion of
handicrafts. Besides taking up direct exports, these corporations are also
expected to guide and help private exporters.

Central Corporations/Bodies:

(a) The Handicrafts and Handlooms Export Corporation of India (HHEC) is a

subsidiary of the State Trading Corporation of India, and came into existence in
June 1962. The corporation's policy in the field of direct exports is designed to
develop new markets and expand traditional ones and to introduce new products
suitable to the needs of the consumers abroad. The Corporation undertakes and
executes wholesale orders, conducts retail sale operations through retail shops
abroad, and participates and sells in major exhibitions of the world. HHEC also
helps private exporters by affiliating them as business associates. It undertakes a
number of publicity and promotional measures for the export of handicrafts and
handloom products.

(b) The Central Cottage Industries Corporation, Pvt. Ltd. is a registered society
which had taken over from the Indian Cooperative Union. It runs the Central
Cottage Industries Emporium (CCIE) at Janpath, New Delhi, the premier sales
organization in Indian handicrafts. The CCIE has branches at Bombay, Calcutta,
Madras and Jaipur. CCIE has grown by leaps and bounds in the successive
(c) The All India Handloom Fabrics Marketing Cooperative Society Ltd. ,(56-
58 Mittal Chambers, 5th Floor, Nariman Point, Bombay, India.), is sponsored
and supported by the All India Handloom Board. This Cooperative runs
handloom houses in Bombay, Delhi, Madras, Calcutta, Ahmedabad,
Chandigarh, Hydrabad, Ernakulam, Vadodara and Vishakapatnam. It also has
branches abroad in Lagos, Singapore, Kualalumpore, New York, Mauritius and

All India Associations:

India has All India Organizations for three of its most popular handicrafts items;
hand printed textiles, carpets and zari. These Associations serve as a platform
for consultations among the manufacturers and exporters on one hand and the
Handicrafts Board on the other. The Board uses these Associations to
disseminate information useful to crafts.

(a) All India Carpets Manufacturers Association; Post Box No. 63, Bhadohi,
District Varanasi, Uttar Pradesh, India.

(b) All India Federation of Zari Industry; Safe Deposit Chambers, Surat,
Gujarat, India.
(c) All India Textile Handprinting Industries Federation, 1106 Prasad
Chambers, Swadeshi Mill Estate, Bombay, India.

Exim Policy

Exim Policy pertaining to the handicraft Sector:

All manufacturers of handicrafts are exempt from obtaining an industrial license

to manufacture. There are no restrictions regarding the location of the
manufacturing unit

Characteristics of Indian hand crafted items for exports:

• They are quota free and neutral to fiber content or composition, barring
100% silk.

• They include Garments, Made-up and clothing accessories.

• Are produced in cottage industries.

• Should not have zippers.

• Must be ornamented using any one or more of the following Indian folk

• Hand painting, Hand printing, Batik, Tie and Dye, Kalamkari.

• Hand embroidery, Crocheting.

• Appliqué work of sequins, wooden or glass beads, shells, mirror,

ornamental motifs of textiles materials.

• Extra wrap of welt ornamentation of silk, art silk or zari threads.

• Should conform to shape and styles of each item as defined in the agreed
list of different countries.

• Should satisfy the dimensional aspects.

Rising trend of the export of handicrafts (other than hand knotted carpets) was
merely Rs. 387.00 crores during the year of establishment of the Council i.e.
1986-87 rose to level of Rs. 10465.14 crores in year 2003-04.

In the year 2001-2002 exports of handicrafts, excluding carpets, in the year

2001-2002 have reached Rs.6769.50 crores. This amounts to an average growth
of 15% per year for past 10 years.

The government is planning to lower the threshold limit from Rs 1,000 crore to
Rs 250 crore in selecting `towns of export excellence', in an attempt to boost
exports of certain goods with major stress on handloom and handicrafts. Added
thrust will be for the cottage and handicrafts sector. The government is
considering granting the benefits of export house status to export performance
of Rs 5 crore in the preceding three licensing years from Rs 15 crore at present.
In addition to this, the commerce ministry is also considering allowing merchant
exporters to undertake duty free import of embellishments/ consumables.

Export Promotion Councils

The All India Handicrafts Board :

(West Block VII, R.K. Puram, New Delhi- 110022). This board acts as a
Commodity Board for handicrafts and has an Export Section with a Deputy
Director (Exports) in charge. The Board collects and disseminates information,
arranges exhibitions, sponsers sales and study teams, and invites foreign buyers.
The regional offices of the Board handle registration and process requests for
any specific export promotion measures.

The Gem and Jewellery Export Promotion Council :

(D-15, Commerce Centre, 4th Floor, Tardeo Road, Bombay- 400001) The
council aims at providing facilities and incentives regarding the exports of
pearls, precious and semiprecious stones, diamonds and sythetic stones; to assist
in improving and modernising of the jewellery craft of the country.
The Handloom Export Promotion Council :

(123, Mount Road, Madras- 600006) It superintends the export promotion of

INdian Handlooms in the country.

The Handicrafts and Handlooms Export Corporation of India:

(Jawahar Vyapar Bhavan, Anex-I, Tolstoy Marg, New Delhi 110001). A

government of India undertaking, it supplements the export efforts of the private
sector, besides exporting directly. It undertakes various export promotional and
developmental measures such as publicity and Indian participation in foreign
exhibitions, and invites reputed designers for advise and assistance. It also has
branches, showrooms and warehousing depots abroad.

The Indian Institue of Foreign Trade :

(Ashoka Bhavan, 93 Nehru Place, New Delhi- 110024). Besides training

courses for export executives, this Instiute carries out surveys of various
markets and publishes them.

The Trade Development Authority of India :

(Bank of Baroda Building, 16 Parliament Street, New Delhi- 110001).

Handicrafts and garments are included in it's trade promotion activities among
other items. It also has offices in New York, Frankfurt and Tokyo. Besides
inviting buyers, it arranges buyer- seller meets in selected markets.

The Export Credit Guarantee Corporation:

(Head office: Express Towers, 10th Floor, Nariman Point, Bombay-400001). It

provides export credit intelligence and issues, covers against risks. It also has
branches in Delhi, Calcutta, Chennai and Cochin.

The Export Inspection Council:

(14/1-b Erza Steet, World Trade Centre, Calcutta- 700001). This Council has
especially been set up to ensure the quality control and Pre- shipment Act. The
Council has also set up a number of Export Inspection Agencies.

The Federation of Indian Export Organization:

(Allahabad Bank Building, 17 Parliament Street, New Delhi-110001). It is a non

profit servicing institution, set up jointly by the Government, industry and trade.
FIEO is an apex forum coordinating and supplementing the institutions. It also
gives special attention to the export promotional activities of small sector
including crafts.

The Trade Authority of India:

(Pragati Maidan, New Delhi-110001) The TFA is an autonomous organization

established by the Government of India as a company. Started in March 1977 it
has today become a highly effective organization giving a new orientation to the
country's trade promotional activities. It unifies policy direction, controls and
implements programmes of India's participation in fairs and exhibitions, both in
India and abroad. Handicrafts continue to receive the special attention of the

Foreign Import Offices

Many of the developed countries are trying to help others, specially the third
world countries. There exist special cell/ organizations which promote trade
imports from other countries to theirs. Most of these offices some or most of the
following services:

1. Statistical information about their countries and markets.

2. Information on sale opportunities.
3. Information on import requirements and procedures.
4. Information on marketing techniques and business practices.
5. Listing of wholesalers, agents, importers, distributors etc.
6. Arrangements for contracts when visiting the market.
7. Trade fairs and exhibition assistance.
8. Publication concerning the markets.
9. Names of buyers seeking suppliers of a special product in specific quantities.
10. Training programs.
11.Free advertising of products in weekly trade information bulletins; also
circulation of product Offers to importers.
12. Seminars on trade promotion.
13.Establishment of regional/ national trade promotion centers and show rooms
for product


14. Product test centre.



“Century old skill and imperial heritage of Rajasthan are all that make
traditional art and craft of Rajasthan a world famous attraction. The beautifully
carved jewellery and dazzling traditional garments allure people of different
region of the world to make a visit to Rajasthan.”

Arts and Crafts of Rajasthan:

Art and Craft Synopses:

A unique range of art and crafts of Rajasthan have been captivating the heart of
entire world for many decades. Be it the exquisite artistry of murals or paintings
or wood craft or the beaming of multi-colored tie and dye garments, the royalty
of Rajasthan is present in every aspect of its art and craft.

Imperial Artistry That Fascinate:

Rajasthan is a home to astounding varieties of traditional arts and cultural crafts.

It is a place, where tourists can find century old skills, which continues to
produce some of the best artistic and exciting wares in the brilliant soil of
Rajasthan. This beautifully accomplished art and crafts are admired and
preserved not only by the localities of the region, but also a popular attraction
for international visitors around the globe. Today, Rajasthan has earned a
immense popularity, due to its rich handicrafts, which is also a striking part of
the Rajasthan culture. If you are interested to buy some of these unique artifacts,
than do not miss the opportunity to try the bustling bazaars, fairs & festivals in
the glittering soil of Rajasthan.

Top on the World Chart - Rajasthan Handicraft

Hand-block Prints:

Hued in the vegetable colours, the floral beauty of hand-blocks prints are of
world wide fame.

Lacquer and Filigree Work :

Lacquer and filigree work of Lac jewellery and bangles much famous in all
over India.

Meenakari Work :

Gold and silver jewellery look stunning when some colour is added to it.

Mehandi :

Rajasthani Mehandi decoration, once dominated the fashion market of the world
in the late 1990s.

Tie and Dye Work :

These multi-hued dazzling clothes have been captivating the heart of the entire
world for centuries.

Terracotta Tradition:

Exquisite miniature effigies are still keeping the age-old heritage of terracotta
tradition alive.

Puppet Art :

Puppets made of wood and cotton is the finest art of Rajasthan.

Jaipur Marbles:

Excellent artifacts made of Jaipur marbles are famous world wide.

Miniature Paintings:
Spectacular miniature paintings of Rajasthan are renowned world over.


Deft needlework studded with mirror in bright colors is the specialty of

Rajasthani embroidery.

Shekhawati Paintings:

Shekhawati is famous for its bright wall painting making it a popular tourist

Tattoo :

The typical art of permanent designs on body.


The shape and size of Rajasthan turbans are a great indicator of person position
in the society.

Rajasthan’s Terracotta tradition that was linked with the civilization of the
Indus continues is still alive in almost every Village. Beyond the utility items
like pots and pitchers, notable are the votive images and plaques of deities
particularly from Molela (40 km north of Udaipur).

Among the textiles, it is the women’s tie-and-dye odhnis (scarf) and the block
printed Dresses that are the most distinct. These techniques are now put to use
in modern garments, bed-sheets and table-cloths.

The fine weave of the Kota-Doria sarees are sought all over the India for
summer wear. Gold and silver khari printing, ajrakh, appliqued and
embroidered textiles, also abound in Rajasthan.
Of late, Rajasthani’s carpet and durrie industry has been revitalized to suit the
tastes of modern buyers and are finding new uses as upholstery and bed-spreads

The craftsmanship of jewellers and other skills of Rajasthan are renowned

particularly Jaipur’s meenakari, a process of coloured glass. Silver is more
commonly worn and worked upon and certainly more affordable for gift

Leather-ware, particularly jooties with embroidered uppers are famous and

popular. Today even designer hand-bags with graphic embroideries make a
good buy. Wood, metal and Stone are used by today’s craft persons to create
decorative and utility items that shoppers often find irresistible.

Miniature paintings of the finest quality continue to be executed in Rajasthan

both on paper and on large pieces of cloth. Different regions maintain their own
style, known as different schools of painting. Some well-known schools of
painting are Marwar, Mewar, Hadoti, Kishangarh, Dhundhar and Alwar
Major Distribution Channels

In Germany, giftware and handicrafts is distributed through five major channels:

1. Wholesalers

2. Importers/distributors

3. Commission agents/sales representatives

4. Department stores

5. Mail-order

6. Internet sales

7. Tele-shopping

The individual channels are described in detail in the following-

Besides offering wide range of goods to retailers for direct sales, this channel also supplies
large quantities of individual articles. They are very particular in maintaining consistency in
the kind of products and their quality. One of the distinguishing features of wholesalers is to
provide distribution and storage facilities. Specialized wholesaler’s deal in sales to retailers as
well as to final consumers. They maintain high quality standards and but have a narrower
and in-depth range of arts and crafts.


Most Indian giftware and handicrafts companies use importers/distributors to market and sell
their giftware and handicrafts lines. They buy and sell on their own account. Thus, the
companies take advantage of the distributor's expertise, his sales force and his existing
distribution channels. Distributors call on giftware and handicrafts retailers, purchasing
and supermarkets. The distributors' mark-up varies depending on the giftware and
handicrafts item, but at least 50 percent. While the mark-ups vary according to the
distributor; they usually also depend on the exclusivity of a product and on its
competitiveness in the overall giftware and handicrafts market.

Germany hosts more than 45,000 giftware and handicrafts retailers. Several retailers import
directly from the United States and sell to the German customer. Usually these are small
companies looking for items new to the market and handling small orders only.

Commission agents:

Commission agents provide Indian companies with direct access to the German market and
direct control. Independent commercial agents are normally working on a 15 percent
commission and operate on a regional basis. They concentrate on specialist retailers,
purchasing groups and department stores. Commission agent contracts are based on stringent
EU and German regulations. An Indian firm wishing to appoint an agent should make sure
that such standard contracts meet its expectations. In order to facilitate market entry efforts
by the agents their initial commission is often a few percent higher than the "usual"
commission. These additional payments are to reimburse the agent for substantial advertising
and any special efforts facilitating the new product's market entry.

Department Stores:

Indian companies interested in establishing business contacts with major

department stores, mail-order houses and retailers may also choose the direct
approach. Department stores in particular, prefer to deal directly with
manufacturers. Their buyers are very specialized and only handle a limited
range of products. At some occasions department stores also buy

through independent commercial agents. Quite often they have their own buyers as well as a
few agents that usually work with them and who know their assortments. If a department
store decides to import a particular giftware and handicrafts item, it places bulk rather than
small orders.

Mail Order:

On an average, each German consumer buys products totaling to DM 500 each year from
mail-order houses. There are about 200 mail order companies in Germany. In Europe,
Germany is the largest mail order market, followed by Great Britain and France. The total
European market volume for mail order products is estimated at approximately DM 90
billion. Of the 20 major mail order companies in Europe, 12 have their headquarters located
in Germany. Among them are the world's largest mail order companies: Otto Versand in
Hamburg and Quelled Schickedanz AG & Co. in Fuerth. In addition, several German mail
order companies operate in other European countries, as well.

Internet Sales:

Germany will become market leader among the EU countries with regard to sales over the
Internet by the year 2000. It is anticipated that by then German electronic sales, which are
estimated to reach a volume of DM 500 billion worldwide in 2000, become second in the
worldwide ranking after the United States and before Japan. A typical German Internet user
and a major German mail-order publication is between 20-39 years old, is highly educated
and earns more money than the average German consumer. This age group consists of about
4.5 million Germans. Seventy percent of these consumers are male. Already today, the
Internet is a major sales channel for German mail-order houses.


QVC and HOT are the two tele-shopping channels in Germany. They operate
all over Germany and offer various types of giftware and handicrafts; jewellery,
fashion, health, beauty; household consumer goods; collectibles and home
Value Adding Chain in Handicrafts

Identification of market opportunities

Prototype design and development / adaption and refinement

Test marketing

Upgrading equipping facilities

Securing inputs

Entrepreneurial hiring, training, managing

Production, quality control and packaging

Costing and pricing

Physical distribution

Export market development

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.
Market Research is a systematic gathering recording analyzing data about problems relating
to the marketing of product and services. It is the process of a systematic and in depth study
an area of investigations. Supported by the collections, completion and end presentation of
relevant details for further utilization. It involves scientific analysis that would result in the
formulation of new theories, the discovery of new techniques, a modification of old concepts
or rejections of an existing theory. Marketing research plays a vital role of making available
the right at right time, right place and to the right person for use in decision making. It is
very difficult to find out information about the company’s strategies and polices. Thus,
research methodology is a way to systematically solve the research problem. It includes:

1. To know the research problem.

2. To specify the specifications.
3. To review literature.
4. Data verifications.
5. Data analysis.
6. Interpretations.

Depending upon source data collection is classified under two categories:

1. Primary Data
2. Secondary Data


The data which are originally collected by an investigations or agency for the
first time for any time for any statistical investigations used by them in the
statistical analysis are termed as primary data.


The data which have already been collected and processed by some agency or person and
taken over from these or used by any other agency for their statistical work are termed as
secondary data.

The methodology used for the data collection was based on personal observation &
information gathered through various sources like Internet, annual reports etc. The
information so received was properly analyzed, interpreted to the right conclusions.
The research study has been carried out by adopting the following methodology:-

1. The review of available literature was made to develop

develop the conceptual framework of
Handicraft industry.
2. The study has been based on primary & secondary data both.

Research Design:
After having defined the marketing research problem and developed a suitable
approach, attention must be given to the formulation of a detailed research
design, which will provide pertinent information. According to (C.R. Kothari,
2004) when defining research design, he presents it simply as ‘the framework
for a study used in order to guide the collection and analysis of data’.

According to Kothari (2003), there are two major types of research design:-

1. Exploratory research--concerned with the development of initial hunches

or insights.
2. Conclusive research--intends to verify insights and help decision makers
to select a Specific course of action.

Even though exploratory and conclusive research has distinct purposes, they
both consist of the same research components. They differ only in terms of the
degree of formalization and flexibility of the components illustrated in table

Research project Exploratory Research Conclusive Research


Research Purpose General: To generate Specific: To verify

insights about a insights in selecting a
situation course of action

Data Needs Vague Clear

Data Collection Form Open-ended , Rough Usually Structured
Sample Relative Small Relative Large
Data Collection Flexible, No set Rigid, well laid out
procedures Procedures

Data Analysis Informal, Typically Formal ,typically

non-Quantitative quantitative

Exploratory Research:

According to Kothari (2003), the primary purpose of exploratory research is to

shed light on the nature of situation and identify any specific objective or data
needs to be addressed through additional research. Exploratory research is the
most useful when a decision maker wishes to better understand situation,
identify relevant courses of action or gain additional insights before an approach
can be developed. In general, exploratory is appropriate to any a problem about
which little is known.

Exploratory studies are distinguished by flexibility concerning the methods

employed. Literature searches, experience surveys and study of selected studies
are some commonly used approaches (Kothari, 2004).An effective way of doing
exploratory research is to seek out and talk to individual with expertise related
to the situation being investigated.

Conclusive Research:

The insights gained from exploratory research might be verified by conclusive

research, as the objective of conclusive research is to test specific hypothesis
and examine specific relationship (Malhotra, 1999). Conclusive research is
especially useful when the decision-maker already has in mind on or more
alternatives and is specifically looking for information pertinent to evaluating
them. Therefore, when conductive a conclusive research, the decision maker
can choose the best course action in a situation.

The kind of research is based on large, representative samples, and the data
obtained are

subject to quantitative analysis.

There are two basic forms of conclusive research:-

○ Descriptive research
○ Casual research

The distinction between the two is based on the primary purpose of a conclusive
–research project and the nature of the inferences that can be drown from it.

Descriptive research:

Descriptive research is the design involved in the vast majority of marketing

studies. The goal of descriptive research, as the name implies is essentially to
describe something. Specifically, it is intended to generate data describing the
composition and characteristics of relevant groups of unit such as customers,
salespeople, organization and market areas (Parasuraman, 1991).Data collected
through descriptive research can provide valuable information bout the study
units along relevant characteristics and also association among those

Title of study-

To study the growth prospects of the handicraft industry at Jodhpur

Objective of Study

1. To study the handicraft industry of India.

2. To study the recessionary effect on the handicrafts industry at Jodhpur.
3. To understand the complete procedure and requirements of Indian
Handicraft Industry.
4. To analyze the different product of Indian Handicraft Industry.
5. To find the potential in existing market.
6. To measure the satisfaction level of the existing customers and to make
the customers
aware about the new products offered by Handicraft Industry of Jodhpur.


Sampling may be defined as the selection of some part of an aggregate or

totality on the basis which a judgement or interference about the aggregate or
totality is made. In other words, it is the process of obtaining information about
an entire population by examing only a part of it. In most of the research work
and surveys, the usual approach happens to be to make generalizations or to
draw inferences based on samples about parameters of populations from which
the samples are taken.

Population (or universe) is the aggregate or totality of statistical data forming a

subject of Investigation, for example,

1) The population of books in the National Library.

2) The populations of the heights of Indians.

A Sample is a portion of the population which is examined with a view to

estimating the Characteristics of the population, i.e.,

1) To assess the quality of a bag of rice, we example only a portion of it.

The portion selected from the bag is called a sample, while the whole
quantity of rice in the bag is the population.
To estimate the proportion of defective articles in a large consignment, only a
portion (i.e, a few of them) is selected and examined. The selected portion
is a sample.


Research of the project was Field Research Analysis.

Field Research:

Field research are ex – post facto scientific inquires that aims at finding the
relations and inter – relations among variables in a real setting. Such studies are
done in life situations like communities, schools, factories, organizations and
Advantages of Field Study:

1) They are close to real life, and they cannot be criticized on the ground
that they are remote from real settings or are artificial. Field
studies are more socially significant than other types of study.
2) In real settings, variables exert their influence fully and, as such, the
strength of variables is another advantage of field studies.
3) field studies are also strong in their heuristic quality.

Limitations of the Field Study:

1) Such studies are scientifically inferior to laboratory and field

2) There is lack of precision in the measurement of variables. This
limitations arises on
account of the greater complexity of field situations.

Such studies have practical problems in respect of feasibility, cost, sampling,

and time. For instance, they are likely to take more time and involve a great

Scope of the Study:

Every research is conducted to fulfill certain objectives and these objectives in turn fulfill some
purposes and it is of significance for one or more than one party, this research was significant
both to the company as well as to the researcher.

Significance Of The Researcher:

It helps the researcher in studying the various kinds of risk and uncertainty in recession and to
know the awareness and the satisfaction level among the entrepreneurs regarding the recession
and Government. The research is compulsory for the partial fulfillment of M.B.A. curriculum
so the research facilitates the researcher for the fulfillment.

The researcher has got an opportunity of implementing her theoretical knowledge of

management program in her practical life.

The researcher has not only got practical exposure of working conditions but also learned a lot
in the field of research.

Significance To The Organization:

It will enable organization to know about the fluctuation in demand including

various type of risk and uncertainty faced by the entrepreneurs and their
satisfaction level regarding the policies made by Government for them to
coming out from the phase of Recession. It will help the organization in
adopting the strategies. This description will help the Industry to know whether
their customers were about their product range and how can they overcome the
situation of recession. In case if any customer is not aware about them then to
create awareness regarding the utilization of these services and to overcome all
the risk and uncertainty component of business to earn maximum profit or
getting no loss regarding the recession.

To Other:
The study will become useful for future scholars who would wish to conduct the similar study.
The researcher can be an important secondary source of information for future scholars.


1. Small sample size may sometimes result into erroneous results.

2. Diminutive Time Limit.

3. Different Industrialist have different kind of effect and it is difficult to

recognize all.
4. The information related to Handicraft industry seems to be contradictory to
the actual behaviour of the industrialist.

5. Not having proper knowledge of the location of the organizations.


Facts & Findings

 In small units only 14% units go for outsourcing

 46% of units are making decorative items, which need skilled labor
 Max. no. of units are making only traditional items, they are not making
any new innovative items like- rotating dining table, decorative coffee
grinders, CD racks etc
 60% of units are facing skilled labor problem and 20% of units are facing
raw material (wood) price increase problem
 60% sales generate in September to December month
 63% of units sale their products by direct sale or by phone

• The total exports in the year 2006-07 has been the highest with respect to
initial handicrafts exports in the year 1994-95.

• The graph shows a decline in the exports in the year 2008-09,due to

world wide recession.
The above figure shows the country wise share of art metal ware in 2008-
The above figure shows the country wise share of wood ware in 2008-09.

The above figure shows the share of miscellaneous handicrafts in 2008-09.

1. When respondents were asked about the Market of sale of handicraft’s product is
domestic market or foreign market or both then following responses were obtained

Market Organization’s
Domestic 1
Foreign 2
Both domestic & 2

According to this, 40% of the organization sale in foreign market & 40% of the organization
sales in both foreign and domestic market. Whereas, only 20% of them sales in domestic

2. When respondents were asked about the Availability of Raw Material then following
responses were obtained

Raw material availability Organization’s

through choice
Producing by yourself 0
Order 4
Vendor contract 1

According to this, 80% of the organization get the raw material on order basis from outside
whereas, 20% of the organization get the raw material from vendor contract. None of the
organization produce raw material by themselves.

3. When respondents were asked whether their Need of finance of purchase of raw material is
same as before recession or no change in their need then their response is.

Need of finance Response

Earlier before recession 0
After recession 2
No change in need 3

According to this, 60% of the organization have make no changes in the need of finance of
purchase of the raw material after recession. Whereas, 40% of the organization have in need
of the finance for the purchase of the raw material after recession.

4. When respondents were asked about the duration of recession then their responses are
Duration of recession Response
Still facing 1
Overcome 3
Not faced yet 0
No such prominent impact 1

According to this, 20% of the organization states that they are still facing the effect of the
recession & 20% of the organization says that they have no such prominent impact on the
organization of the recession. Whereas, 60% of the organization states that they had
overcome the effect of the organization.

5. When respondents were asked whether they have any chances of recovery in the
period of recession then their response is

Chances of recovery Response

Already recovered 1
More chances 4
Less chances 0
No chances 0

According to this, 80% of the organization states that there are more chances of recovery
from the recession. Whereas, 20% of the organization says that they had already recovered
from this situation, none of the organization was in level of less chances or no chances to

6. When respondents were asked about the recession that according to them on what
depends the recession then researcher got following responses

Recession depends on Response

Investment 0
Foreign market condition 4
Economic factor 1
Time duration 0

According to this, 80% of the organization states that recession is mainly due to
the foreign market condition and 20 % of them says that it mainly arises due to
the economic factor .

7. When respondents were asked about the domestic factor which is most hit by recession
then following responses were obtained

Domestic factor Response

Labor 2
Raw material 0
Manufacturing cost 0
Over all cost 3

According to this, 60% of the respondents the domestic factor which is mostly
hit by recession is overall cost of the project. Whereas, 40% of the respondents
states labour as the most effected domestic factor by the recession. None of the
organization says for raw material & manufacturing cost.

8. When respondents were asked about the impact of recession on global factor then their
responses are

Global factor Response

Marketing 1
Investment by foreign players 2
Both 1
No effect 0

According to this, 60% of the organizations states investment by foreign players

as the most impacted global factor by recession. Whereas, 20% of the
organizations says for marketing as the most impacted global factor & 20% of
the organizations states both marketing & investment by foreign players had
been effected by recession.
9. When respondent were asked about performance of fundamentals of economy during
recession then following responses are obtained

Fundamentals Response
Demand 4
Employment 0
Investment 0
Income, Interest & Inflation 1

According to this, 80% of the respondents states that demand of the product had
been widely effected by recession. Whereas, 20% of the respondents says for
income, interest & inflation are fundamentals of the economy whose
performance had been effected by recession.

10. When respondents were asked about the impact of recession on imports and exports then
following responses were obtained

Impact on imports & exports Responses

Very high 3
Very low 2
No significant impact 0
None of the above 0
According to this, all the respondents are agreed on the point that there is effect of recession
on import & export of the product, in which 60% of the respondents states that there is very
high impact of recession. Whereas, 40% of them says that there is very low impact of
recession on imports & exports.

11. When respondents were asked about any cost cutting programme if they are running due
to recession then following responses were obtained

Any cost cutting program Response

No 1
Yes 4

According to this, 80% of the organizations states that they had gone for the cost cutting
programme because of the recession. Whereas, 20% of the respondents says that they had
not gone for any kind of cost cutting programme.

12. When respondents were asked about cost cutting program if they gone
through then which policy they are following; responses obtained for above are

Policy of cost cutting program Response

Retrenchment 0
No new recruitment 1
Less manufacturing 1
Other policies 3

According to this, 60% of the organization had applied other policies of cost cutting
programme. Whereas, 20% of the organization had gone for no new recruitment policy &
20% of the organization goes for less manufacturing policy of cost cutting policy.

13. When respondents were asked about how Government is helping handicraft industry then
following responses were obtained

Method of Government’s help Response

By making policy 3
By giving subsidy 1
By tax relief 0
By other policies 1

According to this, 60% of the respondents states that government had help them in the period
of recession by making certain policies. Whereas, 20% of the respondents says that by giving
subsidies government is helping them & 20% of the respondents says by some other policy
government is helping them.

14. When respondents were asked about the degree of recession with reference to
time then following responses were obtained

Degree of recession Responses

No such significant impact 0
Short term 4
Prolonged 0
Can’t say anything 1

According to this, 80% of the respondents says that there is short term effect of recession on
handicrafts industry. Whereas, 20% of the organizations states that they can’t say anything
about the duration of the recession & it’s impact on handicraft industry.


Handicraft Industry of Jodhpur is one of the biggest industries of Jodhpur

dealing in export With a yearly export of more than 1000 Cr. Although looking
at the trend of export figures we Can see a distinct growth in this industry but
on 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.
Jodhpur’s share is only 10%.

The main observations of our study are some issues like –

1. labor problem,

2. unwillingness towards investment in machinery,

3. and inability to participate in foreign trade fairs.

I have identified a number of problems of this industry and these problems have
decreased the potential. Still 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.
By going for mechanization exporters will not only be able to supply in bulk,
uniformity in goods will also be their and time consumption in manufacturing
will also go down which will decrease the operating cycle, One more reason is
unprofessional approach towards work: most of the exporters are no going for
marketing and even if any firm is going then also they are sending only their
relatives there instead of any professional.

Most of the marketing people, which are from their family itself only go and
meet the existing customers, nobody is searching for new buyers extensively,
The entire journey just because a year end holiday onlyfor the person.

Although there are a number of factors that hinders the growth but these are
some of the most important factors, If Handicraft Industry of Jodhpur will go
for mechanization or at least start participation in foreign trade fairs it will raise
exports figures much higher.

Future Prospects
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.

 Each firm should participate in trade fairs

 They should do innovation in wooden handicraft products like; rotating
dining table,
decorative coffee grinders, CD racks & wooden hangers etc

 Regarding skilled labor problem they should give them wages according
to their work
 Provide them performance appraisal and bonus on Diwali.

On February 12, 2010, India's Export Promotion Council for Handicrafts

(EPCH), had approached the Government with a Pre-Budget Memorandum,
which featured a series of relevant recommendations. These included:

• Reintroduction of Income Tax exemption for all handicrafts products

under Section 10BA of I.T. Act, 1961.

• Extension of Service Tax exemption for merchant exporters.

• Announcement of four more mega clusters namely Jodhpur (Rajasthan),

Mysore-Channapatna (Karnataka), Puri (Orissa) and Ferozabad was also
there among other recommendations. - This, according to EPCH, is
necessary for the development and promotion of handicrafts from these

• Service Tax exemption for traders participating in international shows,

who are subjected to pay in foreign currency (including Indian rupees).
• Extension of the Service Tax exemption on Membership Fee of the
Council beyond March 31, 2010.

Incidentally, in 2009, Reserve Bank of India (RBI) had extended the incentive
from September 30, 2009 till March 31, 2010 in order to extend its support to
the labor-intensive sectors like textiles, carpets, handicrafts etc. which were
badly affected by the demand slump in the US and Japan following the
worldwide economic downturn.

Concerns expressed by EPCH were shortly echoed by the Union minister of

state for commerce & industry Mr. Jyotiraditya Scindia, who urged the Union
Finance Minister Mr. Pranab Mukherjee to offer cheap dollar credit at 1% over
Libor (London Interbank Offered Rate) to exporters, against the present 3.5%
over Libor. He has also asked the finance ministry to extend the 2% interest
subvention scheme on rupee export credit and benefits enjoyed by EoU (Export
Oriented Units) units.

All these demands are extremely logical since handicrafts alone accounts for 1.5
per cent of India's total exports, but this highly labor-intensive, decentralized
industry, concentrated mainly in rural and semi-urban areas, is yet to get the
desired boost. Moreover, the sector is still reeling under the pressures of
recession and is yet heave a sigh of relief. So now, it is time to see how the
Government reacts to these demands, and how far it succeeds to meet the
expectations of the handicrafts industry players in India.

Q. What could be done to boost handicraft exports?

Here are some suggestions –

Repositioning and Better Planning:

India should explore and focus on new sizable markets such as France, Netherlands, Italy,
Switzerland, Canada, Japan and Hong Kong where our exports are negligible. This
repositioning would create phenomenal job opportunities to people in rural and semi-urban
areas, it will revive old dying arts and artisans. Today our concentration is excessive on three
markets United States of America, United Kingdom and Germany. The future promotion of
exports must be focussed on growth items and thriving markets for better results.

Assessment of Competition:
While India offers to the world mostly culture goods, its competitors in Asia and Europe offer
culture goods as well as mass manufactured handicrafts. This is because those countries treat
handicrafts as a full-fledged industry Once India recognizes the potential and accords the
status of an industry to Handicrafts then it could be a leader in culture goods as well as mass
produced decorative goods.

Reorientation of Products:
Exporters should be exposed to the global market in a systematic and scientific way whereby
they realize the customer focus of the country to which they are exporting their goods. Using
modern technology, improved tools and techniques, more sophisticated packaging materials
and techniques are some of the ways to make Indian handicrafts more popular in the world.


This would include the total quality management, being conversant and updated
with the global designs, colour trends, environmental concerns, packaging and
everything to boost handicraft exports. Publicity through the Internet,
preparation of world class catalogues advertisement materials and making
efforts to make the Made-in- India label prestigious.


Name of the organization:

Job title:

1. What is the Market of sales of handicraft’s product in your organization?

(a) domestic
(b) foreign
(c) both

2. What is the Availability of Raw Material in your organization?

(a) produced by self

(b) produced on order
(c) vendor contract

3. Has the need of finance for purchase of raw material same as before
recession or no change ?

(a) same need

(b) increased need
(c) no change
4. What has been the duration of recessionary effect on your organization?

(a) Still facing

(b) Overcome
(c) Not faced yet
(d) No such prominent impact

5. Do you have any chances of recovery in the period of recession?

(a) Already recovered

(b) More chances
(c) Less chances
(d) No chances

6. According to you, what are the reasons for recession??

(a) Faulty interpretations of investment avenues

(b) Foreign market conditions
(c) Economic factors
(d) Time duration

7. Which is t the domestic factor which is most hit by recession?

(a) Labour
(b) Raw material
(c) Manufacturing cost
(d) Over al cost

8. What is the impact of recession on global factor ?

(a) Marketing
(b) Investment by foreign players
(c) Both
(d) No effect

9. What is the performance of fundamentals of economy during recession ?

(a) Demand
(b) Employment
(c) Investment
(d) Income, interest, inflation

10. What is the impact of recession on imports and exports of handicrafts?

(a) Very high

(b) Very low
(c) No significant impact
(d) None of the above

11. Did you follow any cost cutting program in your organization owing to

(a) Yes
(b) No

12. What cost cutting program did you follow in your organization?

(a) Retrenchment
(b) No new recruitment
(c) Less manufacturing
(d) Other methods
13. How is the government helping your industry to grow?

(a) By making policies

(b) By giving subsidies
(c) By tax refiefs
(d) By other policies

14.What is the degree of recession with reference to time ?

(a) No such significant impact

(b) Short term
(c) Prolonged
(d) Cant say


• Kothari, CR research methodology: methods and techniques.2nd edition

new delhi, vishwaprakashan, 1990

• Jodhpur Handicraft Export Association Report 2008-09