PROJECT REPORT

ON
HANDICRAFTS EXPORT

MADE BY
SMIT JAIN
BBA (FT)
VTH SEM
 CHAPTER - 1

INDRODUCTION
 HANDICRAFT: 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 are 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 the its 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.

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.

 BACKGROUND
 HISTORY
The word handicrafts are made by two words hand + craft. Hand mean by made of hand or
using simple tools in making of any item, ad craft mean a unique expression that represent a
culture, tradition and the heritage of a country. That mean handicraft is a unique expression by
using art on any item. Handicraft is also known as artisanry, which mean a type of work where
useful and decorative devices are made completely by hand or using simple tools. The term
handicraft is most frequently used for the 'art and craft". Art and craft work is not only a matter
 of happy but also creating useful as well as creative work for people, using natural materials
and traditional techniques. The history of handicrafts is almost 5000 years old. Indus valley
civilization the first references to handicraft found from the Mohenjo daro, Sindh Indus valley
civilization approx. 3000 B.C - 1700 B.C. The Indus valley civilization had a rich craft tradition
as well as a high degree of technical excellence in the field of pottery making store, metal and
terracotta, Jewelry, weaving etc. The craftsmen not only created all the local needs items but
surplus items also.

Development of Indian Handicrafts in B.C. / A.C

Vedic Era
The Indus Valley civilization was allowed by the Vedic age in 1500 B.C. when the Vedas were
written. There is no. of references in the Vedas on artisans involved in pottery making,
weaving, wood crating etc. In Rig Veda particular reference to a variety of pottery made from
clay, wood and metal.

State Empires
The concept of state was ushered by the rise of the Mauryan Empire in the 3rd century B.C. It
is said that during the time of Ashoka 84,000 3 Stupas were built in India, including the world
famous Sanchi Stupa, which has beautiful Stone Carving and relief work done on it. The iron
pillars of Vaishali (Bihar) and Delhi, created during the time of Emperor Ashoka, are a marvel in
the field of Metallurgy.

Post Mauryan Era

In the period between 1st century B.C. and 1st century A.D, intrusions can be seen in the
Buddhist Sculptures from Taxila, Bagram, Bamiyeh, Swat valley etc., which show a high
degree of Greek influence. Jewelry, Sculpture, Textile Making, Leather Products, Metal
Working etc. were the main handicrafts that inherited foreign influences and assimilated them
in accordance with the Indian milieu.

Gupta Era
The Gupta (AD 320-647) age is referred to as the classical period in Indian history. The points
in the field of craft include the rock cut temples of Ellora and the Ajanta murals. These murals
give us a realistic view of the lifestyle of that time. The craftsmen of this period, under royal
patronage excelled in Jewelry Making, Woodcarving, Sculpture, Stone Carving and Weaving.

Medieval India
The Medieval period of Indian history in the context of handicrafts showed a marked shift from
north India to the Deccan and southern parts of the country. The handicraftsmen under the
Delhi Kingdom period flourished in the field of Pottery, Weaving, Wood Carving, Metal
Working, Jewelry etc. The fine example of stone carving from central India can be seen in the
form of the Khajuraho Temples, built by the Candelas. Rich and ornate wood and stone carving
can be found in medieval temple of Jagannathan at Puri in Orissa.

 CURRENT SCENARIO
 India is one of the important suppliers of handicrafts to the world market. The Indian
handicrafts industry is a highly labor-intensive cottage-based industry. The industry is spread
all over the country in rural and urban areas. The industry provides employment to over six
million artisans which include a large number of women and people belonging to the weaker
sections of the society. The handicraft sector is economically an important sector, 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 Indian handicrafts are classified into two
categories as Articles of everyday use and Decorative items. The Indian craftsmen use
different media to express their originality. The diversity of the handicrafts is expressed on
textiles, metals – precious and semi-precious, wood, precious and semi-precious stones,
ceramic and glass. About 6 million craft persons are working as the backbone of Indian
Handicraft Industry. Almost all of them are talented with inherent skill, technique and traditional
craftsmanship. This report highlights the details of Indian handicrafts Industry and its
widespread artworks.

 IMPORTANCE
This paper studies the impact of handicrafts on the promotion of cultural and economic
development for students of art education in higher education through handicrafts based on
local customs and traditions. Descriptive, analytical, and experimental methods are used in this
research. The results of the study are expected to benefit from the results of this study to
provide planners handicrafts in the Ministry of Education. An effective strategy can affect the
teaching and learning of handicrafts, the protection of its features and its presence and identity.
The study sample consists of 45 students of the third level, batch 2012–2013, from the faculty
of Education at the University of Khartoum, Republic of the Sudan. The researchers to prepare
topics for handicrafts depend on the use of local materials and units which are derived from the
environment and represent the Artistic heritage that is shown through handicrafts (pottery,
ceramics, calligraphy, decoration, carpet weaving and textile, sewing, embroidery, sculpture
and engraving on wood, metal works, and printing works). The researchers focused that the
students learn the value of handicrafts in terms of economic and method of production and
take advantage of it to increase the income of the individual product. The results confirm the
existence of a difference in the quality and value of handicrafts for students in both groups: the
experimental and control group, which confirms that the handcrafts lead to the promotion of
cultural and economic development for students of art education in higher education. The
researchers are recommended to consider of this topic as a main component which enables
an area for further studies to develop different strategies in the field of handicrafts, for students
to recognize the importance of the handicrafts value in terms of economic and method of
production and take advantage of it to increase the income of the individual product
INDUSTRY
PROFILE
 CHAPTER - 2

INDUSTRY PROFILE

MAJOR PRODUCTS

HS CODE-4403

24.53% 2017-2018
2016-2017
2015-2016
49.40%

26.07%
 HS CODE-6302

2017-2018
31.69% 34.15% 2016-2017
2015-2016

34.17%
HANDICRAFT’S ORIGINS IN
INDIA
EXPORT
TREND
 CHAPTER – 3

EXPORT TREND

{HS CODE: 44}

WOOD AND ARTICLES OF WOOD; WOOD CHARCOAL.

ITC (HS) CH NO.-44

VALUE IN US $ MILLION
446.6
401.72 402.76
346.54 331.48

2017-2018 2016-2017 2015-2016 2014-2015 2013-2014

{HS CODE: 63}

OTHER MADE UP TEXTILE ARTICLES; SETS; WORN
CLOTHING AND WORN TEXTILE ARTICLES; RAGS

{HS CODE: 69}

 CERAMIC PRODUCTS.

ITC(HS) CH NO.-69
VALUE IN US $ MILLION
1,311.10

1,101.13

914.18
841.96

551.16

2017-2018 2016-2017 2015-2016 2014-2015 2013-2014

{HS CODE: 71}

 NATURAL OR CULTURED PEARLS, PRECIOUS OR
SEMIPRECIOUS STONES, PRE.METALS, CLAD WITH
PRE.METAL AND ARTCLS THEREOF; IMIT.JEWLRY;
COIN.

{HS CODE: 74}

COPPER AND ARTICLES THEREOF.

{HS CODE: 94}

 FURNITURE; BEDDING, MATTRESSES, MATTRESS
SUPPORTS, CUSHIONS AND SIMILAR STUFFED
FURNISHING; LAMPS AND LIGHTING FITTINGS NOT
ELSEWHERE SPECIFIED OR INC.

{HS CODE: 96}

MISCELLANEOUS MANUFACTURED ARTICLES.

{HS CODE: 97}

WORKS OF ART COLLECTORS' PIECES AND ANTIQUES.
POTENTIAL
PRODUCT
 CHAPTER-4

POTENTIAL PRODUCT

4420

17.77% 2017-2018
2016-2017
2015-2016
19.24%
62.99%
 6305

2017-2018
29.19% 2016-2017
38.40% 2015-2016

32.40%

6902

2017-2018
29.19% 2016-2017
38.40%
2015-2016

32.40%
 7113

2017-2018
30.68% 2016-2017
35.86%
2015-2016

33.46%

7419

2017-2018
30.90% 32.56% 2016-2017
2015-2016

36.55%
 9401

2017-2018
27.95% 2016-2017
41.28% 2015-2016

30.77%

9603

2017-2018
27.94% 2016-2017
37.04% 2015-2016

35.02%
 Handicrafts 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:
o There are no restrictions regarding location for establishing manufacturing units.
o All producers of handicrafts are exempt from obtaining Industrial License to
manufacture. The delicensed 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:
o Handicraft products fall under the ITC (HS) code 97.
o Paintings, drawings and paintings, domestic articles of wood etc. which come
under 9701
o Original engravings falling under 9702
o Original sculptures categorized under 9703
o Products under the code 9704 are freely importable.
o Imports of items in 9705 are restricted.
Characteristics of Indian Handicrafts for exports; as defined by Govt. of India are:
o They are quota free and neutral to fiber content or composition, barring 100%
silk.
o They include Garments, Made-up and clothing accessories.
o Are produced in cottage industries.
o Should not have zippers.
o Must be ornamented using any one or more of the following Indian folk styles.
o Hand painting, Hand printing, Batik, Tie and Dye, Kalamkari.
o Hand embroidery, Crocheting.
o Appliqué work of sequins, wooden or glass beads, shells, mirror, ornamental
motifs of textiles materials.
o Extra wrap of welt ornamentation of silk, art silk or zari threads.
o Should conform to shape and styles of each item as defined in the agreed list of
different countries.
o Should satisfy the dimensional aspects.

Tariff-non-tariff Policy
Except for 9704, all the items under 97 attract a total import duty of 35.2 per cent. This
includes a basic duty of 35 per cent and a special additional duty of four per cent.
Items under 9704 do not attract any import duty.
Schemes
The schemes implemented by Office of the Development Commissioner (Handicrafts)
are composite in nature and not specific to area, caste or gender. The artisans
belonging to all communities including women artisans draw benefits from the
schemes. Office of Development Commissioner (Handicrafts), is implementing
following generic schemes:

National Handicrafts Development Programme

The National Handicraft Development Programme for development and promotion of
Handicrafts Sector will have the following three components:

1.{a} Ambedkar Hastshilp Vikas Yojna

{b} Mega Cluster

2.Marketing Support & Services

3.Research and Development

 EXPORT
PROMOTION
COUNCIL FOR
HANDICRAFT
Export Promotion Council for Handicrafts (EPCH) was
established under Companies Act in the year 1986-87
and is a non-profit organization, with an object to
promote, support, protect, maintain and increase the
export of handicrafts. It is an apex body of handicrafts
exporters for promotion of exports of Handicrafts from
country and projected India's image abroad as a
reliable supplier of high quality of handicrafts goods &
services and ensured various measures keeping in
view of observance of international standards and
specification. The Council has created necessary
infrastructure as well as marketing and information facilities, which are availed both by
the members exporters and importers. The Council is engaged in promotion of
handicrafts from India and project India's image abroad as a reliable supplier of high-
quality handicrafts.

The Council is run and managed by team of professionals headed by Executive

Director. The Committee of Administration consists of eminent exporters, professionals.
The Export Promotion Council for Handicrafts has a rarest distinction of being
considered as MODEL COUNCIL that is self-sustaining and where all the promotional
activities are self-financed.

Council's continued pursuit of excellence and the objective of achieving the hallmark of
quality assurance by extending excellent services to all the members and stake holders
has led the Council to become an ISO 9001: 2015 certified organization.
Highlights of the council
Export of handicrafts the exports of Handicrafts have shown an increase of 2835.27
crores, from 21557.12 to 24392.39 crores, an increase of 13.15% in rupees term. In
dollar terms, the exports have shown the increase of US $ 346.30 million i.e. the
exports increased by 10.52% over the similar period in 2015- 2016.
During the period, the exports of Art Metal ware, Woodwares, Hand printed Textiles &
Scarves, Embroidered & Crocheted goods, shawls as artwares, Attar and Aggravates
and Misc. Handicrafts showed an increasing trend of 17.30%, 0.19%, 34.46%, 9.87%,
4.90%, 7.83%, and 27.96% in rupees terms respectively while Zari & Zari Goods &
Imitation Jeweler showed a negative growth of 39.26% & 23.42% respectively. In USD
terms Art Metal ware, Hand printed Textiles & Scarves, Embroidered & Crocheted
goods, shawls as artwares, Attar & Aggravates and Misc. Handicrafts have shown an
increasing trend of 14.65%, 31.30%, 7.22%, 1.79%, 5.35% & 24.99% respectively
while Woodwares, Zari & Zari Goods & Imitation Jeweler showed a negative growth of
2.16%, 40.67% & 25.19%.

Membership of Council Membership of the Council rose from 35 in year 1985-86 to

8656 in 2015-16.
Indian handicrafts and gifts fair One of the few fairs in world where entry is only open
for the overseas buyers.
India Expo Center & Mart: -The India Expo Centre – one of the finest expositions and
business centers set up in 2006 and inaugurated by Hon'ble Prime Minister of India
and has taken shape in India for international marketing of the products of cottage
sector. Everything in this state-of-art complex has been created with a single purpose
to be the preferred destination for international business, exhibitions, trade fairs and
business meets in India.

India Expo Centre has been constructed to international standards by a team of world
-class professionals. India Expo Centre is unique project in Asia and Located at
Greater Noida connected with New Delhi through a series of flyovers and express
ways, India Expo Centre features an expansive exhibition and mart complex built to the
highest international standards.

With a total covered area close to 2,35,000 sq. mts. India Expo Centre represents a
rare combination of grandeur and state-of-the-art facilities for conducting business on a
global scale. The India Exposition Mart have large exposition area consisting 8
exhibition halls and 1800 permanent showrooms with state of art facility at the first
phase. This world class facility will act as a centralized contact point for buyers and
sellers from all over the world to converge and conduct business in India. The Indian
Handicrafts & Gifts Fairs held biannually in the Mart besides product specific shows.

AGGRESSIVE INTERNATIONAL MARKETING PROJECT FOR THE

DEVELOPMENT AND PROMOTION OF NORTH EASTERN CRAFTS: -
To provide a push in the export earnings from North Eastern Region, the Council had
executed an ambitious International Marketing Project for entire North Eastern Region.
The project entailed integrated approach i.e. development of marketable product with
the help of National & International design, marketing support with help of marketer /
merchandiser by exhibiting in theme galleries/exhibitions, procuring export order and
follow up for execution and realization. As a result of which the exports of handicrafts
products from North East Region have generated.

NATIONAL CENTRE FOR PHOTO & PICTURE FRAMING TECHNOLOGY AT

SAHARANPUR AND JODHPUR:
-To provide infrastructural support for upgrading technological input for handicrafts
sector especially Photo framing technology which has huge potential in the
international market, Common Facility Centre (CFC) at Saharanpur & Jodhpur has
been setup. Imported upgraded machines as per international requirement have been
set up to facilitate the exporters of woodware crafts to utilize the same for upgraded
production. Both the Centers are in function at Saharanpur and Jodhpur.

TECHNOLOGY UPGRADATION CENTRE AT SAHARANPUR: -

Further to strengthen the sector, a more comprehensive plan was envisaged to provide
an overall facelift to the Wood Carving Industry of Saharanpur. The Council has
implemented the project for setting up of Technology Upgradation Centre at
Saharanpur. The project encompasses setting up of Design Studio, Technology Up-
gradation Centre, and installation of Seasoning Plant, Carpentry School and Training &
Marketing. The exporters in wood craft from Saharanpur are actively utilizing the
services for technological upgradation of wooden products.

ESTABLISHMENT OF INTERNATIONAL LACE TRADE CENTRE: -

Trade linkages to the clusters are currently very week and fragmented access to
cluster players is a key impediment to growth. With a view to address the need to
integrate the cluster to major and international buyers and build an amenable
marketing platform to scale up of business, Council in coordination with the
Government of India is establishing International Lace Trade Centre at Nishapur
(Andhra Pradesh). This Centre is being established in the area of 5 acres land. It will
build the requisite marketing infrastructure and foster trade linkages with national and
international markets thereby promoting growth of the cluster and its primary stack
holders.

SETTING UP OF MORADABAD RESOURCE CENTRE: -

To uplift and upgrade the Moradabad Cluster by providing business resource facilities
for artisans/craftsmen/exporters/entrepreneurs as well as to develop the first state of
art centralized facility in Moradabad to facilitate information dissemination relating to
business development, world market trends, marketing and publicity and to cater to the
changing tastes and requirements of the international markets and remain abreast with
the latest development. The proposed Centre would introduce the advantages and
scope of using newer technologies for business development, expansion and
promotion. Council in coordination with Government of India is implementing the
project for setting up of Moradabad Resource Centre.

HANDICRAFTS PRODUCTIVITY CENTRE AT JAIPUR: -

For the benefit of craft persons and exporters of the State of Rajasthan, EPCH has
setup a "HANDICRAFTS PRODUCTIVITY CENTRE" at Jaipur with the view to address
the need for promoting the crafts and remove impediment of the growth of craft sector
of Rajasthan. The project is primarily for up-gradation of skill development, quality
improvement, training and testing laboratory to provide value added services to the
Handicrafts exporters based in Rajasthan. The Centre is setup in the area of 4000
sq.mtr and include facilities such as, one stop information point for commercial
intelligence, market information, trade facilitation information, overseas market, trend
and forecast for Jaipur based products, online introduction with consultant, books,
journals, export documentation, internet excess facilities, library, credit availability
information and guidance etc. as well as testing lab for home textiles, fashion jeweler
and wooden crafts.

EPCH ACTIVITIES
 Providing commercially useful information and assistance to members in
developing and increasing exports.
 Offering professional advice and services to members in areas of technology
upgradation, quality and design improvement, standards and specifications,
product development, innovation etc.
 Organizing visits of delegation of its members abroad to explore overseas market
opportunities.
 Participating in specialized International Trade Fairs of handicrafts & gifts.
 Organizing Indian Handicrafts and Gifts Fair at New Delhi.
 Interaction between exporting community and Govt. both at the Central and State
level and representation in almost all the committees / panels of Central and State
and represents in almost all the committees / panels of Central and State.
 To create an environment of awareness through Workshops on "Export
Marketing, Procedures and Documentation", Packaging, Design Development,
 Buyer Seller Meet, Open House etc. interaction with Central and State Govt. and
various other similar programmers.
 Dissemination of government notification, orders, information on trade and other
relevant information to members.

MEMBERSHIP OF THE COUNCIL

The membership of the Council rose from 35 in year 1986-87 to 9975 in 2018-19.
SWOT
Strengths:
Large, diversified and potential market.
There is large product variety and range is available because of diversified culture.
It has strong, diversified and supportive retail infrastructure.
Diversified product range that service different market.
Cheap labor rates that result to competitive price.
Need low capital investment.
 There is flexible production flexibility.
Low barriers of new entry.
Advantages and Critical Success Factors:
o Easy creation and development of production centers.
o There is no need for macro-investment.
o Industry provides potential sources of employment.
o Products are high value added, and handicrafts have various
applications.
o It is the potential source of foreign revenue because of higher export.

Weaknesses:
o Lack of infrastructure and communication facilities.
o Unawareness about international requirements and market.
o Lack of co-ordination between government bodies and private players.
o Inadequate information of new technology.
o Inadequate information of current market trends.
o Less interest of young people in craft industry.
o Lack of skilled labor.
o Still confined to rural areas and small cities and untapped market.
o Lack of promotion of products.

Opportunities:
o Rising demand for handicraft products in developed countries such as
USA, Canada, Britain, France, Germany, Italy etc.
o Developing fashion industry requires handicrafts products.
o Development of sectors like Retail, Real Estate that offers great
requirements of handicrafts products.
o Development of domestic and international tourism sector.
o e-Commerce and Internet are emerged as promissory distribution
channels to market and sell the craft products.
 Threats:
o Competition in domestic market.
o Balance between high demand and supply.
o Quality products produced by competing countries like China, South
Africa.
o Better Trade terms offered by competing countries.
o Increased and better technological support and RandD facility in
competing countries.

CONCLUSION
 CONCLUSION
The handicrafts sector is important for the Indian economy as it is one of the largest
employment generators and accounts for a significant share in the country’s exports.
The state and regional clusters contribute significantly to handicrafts export. The Indian
handicrafts industry is fragmented, with more than seven million regional artisans and
more than 67,000 exporters/export houses promoting regional art and craftsmanship in
the domestic and global markets.

 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.

EXPORTS OF HANDICRAFTS

The exports of handicrafts (other than hand knotted carpets) was merely Rs. 386.57 crores
during the year of establishment of the Council i.e. 1986-87 rose to level of 26590.25 Crores in
year 2018-19.
SHARE OF EXPORTS OF HANDICRAFTS IN MAJOR COUNTRIES/REGIONS

*Based on 167 HS Codes