Topic :Study of Factors Responsible for Fragmentation & Localisation of Indian Handicraft Industry

Objectives of the Proposed Research The Research aims at the following : 1. Studying the factors responsible for the decentralisation of the Indian handicraft industry . 2. Comparing Indian handicraft handicraft industry with some European economies in the context of exports, globalization, and employment generation. 3. Exploring the Possibilities of centralisation or Organization of the highly fragmented handicraft industry in India.

Introduction to the Indian Handicraft Industry 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 are produced in small workshops run by less than 100 people. 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 labour 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.Handicrafts are classified into two categories: articles of everyday use, and decorative items.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. 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. 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 managed. 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.Although exports of handicrafts appear to be sizeable, Indias share in world imports is miniscule. It is a sector that is still not completely explored from the point of view of hidden potential areas. The Concept of the Indian handicraft industry The concept of Indian Handicrafts has emerged from one of the oldest civilizations called the Harappa Civilization and the Indus Valley Civilization. The exclusive items carved by the India Handicraft Industry comprise of vast cultural and ethnic diversity that has imbibed an array of unique themes, techniques, and crafts. India Handicraft Industry has been globally popularized as the rich and cultural heritage of India for its unique appeal. Handicrafts of India use brass, metal, wood, stone, and beads to carve its products ranging from masterpieces to plain household items. Paintings, furniture, sculptures, artificial jewelry, animal figures, figurines of deities and idols, baskets, and many more items have been complimented as the pride of India.

Besides, trading in the local markets, Indian handicrafts are also exported across the globe. Each work of art reflects the adroitness and emotions of the craftsmen which have made the work more close to heart apart from being an exclusive show piece. India is one of the important suppliers of handicrafts to the world market. The Indian handicrafts industry is highly labor intensive cottage based industry and decentralized, being spread all over the country in rural and urban areas. Numerous artisans are engaged in crafts work on part-time basis. The industry provides employment to over six million artisans (including those in carpet trade), which include a large number of women and people belonging to the weaker sections of the society.

Industry Analysis Exports With the passage of time, Indian society and economy has changed enormously. It opened up its economy and adapted to globalisation in the early nineties. Many Indian companies have started becoming respectable players in the International scene. Indian economy experiences the existence of both traditional handicrafts and modern mechanised production. True, industrial capitalism has brought machine-based mass production. But keeping pace with tradition, the Indian handicrafts industry still shows its importance. Since the advent of globalization in 1991, one of the growing sector benefited out of it, is the Handicraft industry. The case of the handicrafts sector can be discussed here from both macro and micro level; macro level taking its contribution to the Indian economy through export and micro level in terms of its employment potential.The growing opportunity for handicrafts in global market is observed when the Indian handicraftsexport crossed Rs 1220 crores in 1990-91 from merely 10 crores in the mid fifties. Again it increased to Rs. 7157,64Crores in 199899 and Rs. 9270,50 Crores in 2000-01. Ithad reached at the peak of Rs. 17 276,71Crores in 2005-06 . Further the IndianHandicraft Export Council has estimated the export of handicraft goods will touch Rs 32 700crore by year 2010. The table below presents the extent of the exports of different handicraftsproducts from 2004 - 05 to 2006-07. Items ArtMetalware Woodware Textiles&Scarves Embroidered &Crochet 2004-2005 3364.93 721.18 1848.76 4199.86 2005-2006 3662.98 853.06 2053.70 4711.45 2006-2007 3391.04 803.72 2182.97 4117.84

Goods

So the expanding handicraft export in post-liberalization era shows the growing opportunity in a liberalized market. The table below shows the major destinations of Indian handicrafts. As maybe seen here USA continues to be the largest market for Indian handicrafts items. Exports tothis market in 2004-05 registered a significant growth of 20,49 per cent over the previous year.The other important destinations in this respect that witnessed phenomenal growth during theperiod are: Germany (43,08 %), UK (32,39 %), Switzerland (31,13 %), and Netherlands(26,80 %). The figure below shows the country wise export of Indian handicrafts in the year 200607.The USA still continues to be a major market for Indian craft goods followed by UK.Germany and France are other major destinations.

Trend During the globalization phase, the growth in handicrafts sector amounts to increasing demand for ethnic and culture-specific goods as a result of growth in world tourism. There is an increasing global trend of spending on home furnishing and an increasing global reaction to the homogenization of mass-produced goods, not to speak of the growing preference for substituting goods based on synthetic materials with goods based on environment friendly natural raw materials. Indian Handicrafts

are said to be just another precious stoneof its great culture and heritage. Whether it is the intricately decorated metal craft or some marvellous marble inlay work or some superb paintings or spectacular wood works, Indian handicrafts are going places with their ethnic designs and flourishing textures. Although, the importance of craft in contemporary Indian social and economic life is growing day by day, there is no universally accepted definition of the term in India. As the Task Forceon Handicrafts definition (1989) puts it: Handicrafts are items made by hand, often with theuse of simple tools, and are generally artistic and/or traditional in nature. They includeobjects of utility and objects of decoration Many Indian handicrafts have aesthetic richnessand decorative values which have become world famous. Employment In the micro-level, it could be assessed that in India handicrafts constitute a significant segment of the decentralized sector of its economy and it provides employment to millions ofartisans scattered especially in the weaker sections of society such as SCs, STs and the women, producing goods worth thousands of Crores of Indian Rupees per year. The Annual Report of various years of the Ministry of Textiles,Government of India suggests that the employment in this sector in 1997-98 was 52,92 lakhswhich became 58,41 lakhs in 2001-02 and 60,16 lakhs in 2002-03. In 2005-06, 65,72 lakhspeople were employed in this sector. Based on the National Council for Applied EconomicResearch (NCAER) survey of 1995-96, of the total workforce engaged in handicrafts, 47,42 %are women of which 37,11 % are coming under the backward communities like ScheduledCastes/Scheduled Tribes. Indian handicrafts sector forms the second largest employmentsector -second only to agriculture. In the age of globalization, where efficiency meets success, Indian handicrafts further prospect lies in diversification of products and markets. In a highly competitive market, Indian handicrafts need to be ahead of the competitors in keeping themselves informed of current market trend and changes in fashion and design of the consumers. The table below shows the number of total handicraft units both household and non-household sectorand total number of craftpersons in some selected states. States having artisan populationbelow one thousand have been left out.

Methodology /Work Plan

Phase I: Introduction

This section will provide an overview into the Indian handicraft industry, the nature of the Indian handicraft industry and existing fragmentation of the industry. We would like to discuss the major factors which are responsible for the decentralisation of the Indian handicraft industry. We would also like to study the global reach of Indian handicraft industry in terms of exports compared with European Union countries. Phase 2: Literature Review The purpose of this section is to study the existing status of the handicrafts in various parts of the rural sectors in India. To do this we would need to study the published official documents and other related reports with reference to the various handicraft products produced in different parts of the country. These official documents will include not only the government documents but also the existing published research

papers in the same field. We aim to study the reports from the ministry of export and handicrafts, to understand the role played by the state, other support organizations and the small private players in the handicrafts goods production and distribution. Phase 3: Research Methodology Research plan will be developed through conclusive research design using descriptive research analysis methods by survey whose objective will be

To know about the current state of Indian handicraft industry To analyse the handicraft industry, its issues, working, competition,

challenges and their satisfaction level. To find out Indian handicrafts standing with respect to leading countries

Research Approach: 1. Primary data for gathering information regarding manufacturing requirements and facilities available, issues, working conditions, competition, challenges will be collected by personal interview with different manufacturers selected on the basis of random sampling survey method. 2. Secondary data regarding world demand and supply positions, Indian Handicraft status and other relevant information were gathered from different sources mentioned in phase 4. The research methodology would be based on examining the responses gathered on various parameters in primary and secondary data. The trending of explanatory variables in measuring dependability of handicraft Industry by deterministic analysis of factors representing attributes of fragmentation & decentralization. Phase 4: Data Collection The primary data for the research will be gathered from the specific states which account for a prominent handicraft industry. This will give us a first hand and a general idea of what this business as such. We will try to understand and collect all the relevant secondary information of the various forms of handicrafts and the regions where they are made. Moreover well also collect information on the prominent and currently famous handicraft products made in India, which are exported or are strong contenders of being exported. Information will also be sought on the existing Government support (policy and financial) provided to the skilled craftsmen. Some of the data collection tools/steps that we can make use of are: 1. Getting the personal and family details of the craftsmen To get the number of people involved in the activity.

2. 3. 4. 5. 6.

Economic activities involved in. What kind of handicraft activity are the craftsmen involved in. Details of the Skill set of craftsmen. Details of raw materials. How and where from the craftsmen get it? What kind of design and products do the people, involved in handicraft industry, develop? 7. Constraints in handicrafts promotion. This would include conditions like non availability of loans, high interest rates or no market available at all. 8. Marketing support details. 9. Handicraft product prices details and their viability. The detailed information on the above mentioned data tools/steps will give us a clear idea of what are the loopholes because of which the handicraft industry is still such unorganised. Other than all this data we propose to procure data from the following: Ministry of trade and handicraft, Indian handicraft export promotion council, All India handicrafts board, international handicraft fairs and exhibitions. This will provide us the data about the existing handicrafts exports, the market size and Indias contribution to the global market. Phase 6: Policy Implications & Conclusion Based on our study & empirical findings and data interpretation, we would like to discuss the major government policies in different states and their implications . We would also to discuss the export & import policies of Indian government & their European counterparts. We will also be interpreting the data for employment generation capabilities in different states which can provide impetus to rural economy .In addition we would also like to touch upon the synergies between the Tourism Sector & handicraft sector that can create new milestones in the prosperity & economic growth of the country.

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Sood, A. Crafts as a Sustainable Livelihood Option in Rural India. Unpublished doctoral dissertation proposal. University of London, London,England. accessed at: http://www.livelihoods.org/lessons/Thematic/Craft_diss.doc. (2002) Government of India: Economic Survey 2006-07. Vijayagopalan, S.: Economic Status of Handicraft Artisans. NCAER, New Delhi, 1993, Government of India: Annual Report of the Ministry of Textiles 200607. Das Sudhansu R.: Cultural life and economic growth. The Economic Times, 18th March, 2006, Subrahmanian, K.K.: An Overview of the Handicrafts Industry.

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Blending Heritage with Economics.Dannish Books, Delhi, 2006,

9. Saraf, D.N.: In the journey of craft development. 1941-1991.

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10. Mohapatra, R.C.: Changing Patterns in the Applique Crafts of Pipili.

Orissa Review, 66-67, December 2005,

11. Jena, P.K.: Globalization and Indian Handicrafts : Quest for a

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13.The Hindu(Friday Review), 6th October, 2006, 14. Varghese, George. 2009. Global Recession has Hit Handicrafts, Express News Service, 29 February 15.Planning Commission of India 16.Socio Economic & Educational development society New Delhi 17. Menon .Art of Marketing Village Crafts; Challenges in Applying Quantitative Marketing to Resist Recession, International Review of Business Research Paper, 196-197 , November 2010 18. Planning commission report on Status Study of tribal handicrafts an Option for livelihood of tribal community in the states Rajasthan , Uttaranchal , Chaatisgarh and Arunanchal Pradesh , May 2006. 19. Export Promotion council for handicrafts http://www.epch.in/ 20. Annual Report Ministry of textiles 2010-11 http://www.texmin.nic.in/annualrep/arep.htm