1.

Indian Handicrafts - An Introduction

A walk through the time-honored gallery of Indian handicrafts showcases the cultural brilliance and munificence of the nation. Emblematic of a country that is a melting pot of diverse communities, customs, tribes, traditions, festivals and languages, the lineage of Indian handicraft dates back to antiquity and captures a rich blend of functionality with artistic ingenuity. Infusing prolific designs on timeless substrates like textiles, stone, metal, papier mache, glass, grass, wood, cane, bamboo, clay, terracotta and ceramics, they beautifully articulate the artistic mastery and excellence of Indian crafts persons who have inherited, preserved and honed this ancient skill throughout the ages. Today, globally extolled for their dynamic combination of form, design and color, Indian handicrafts enjoy a large export market, especially in places like Saudi Arabia, U.S.A. Japan, U.K, Germany, Canada, Italy, France, to name a few.

1.1. Popular Indian Handicraft Items

Metal Craft: Metals such as gold, silver, copper, brass and bell metal are shaped to perfection to create an exquisite wealth of jewellery, figurines, idols, utensils, etc. These intricately crafted items are special to Bihar, West Bengal, Kashmir, Orissa, Assam, Tamil Nadu and Kerala.

Metal Ornamentation: Use of techniques such as inlay, overlay, appliqu, etc., gives birth to the exclusive repertoire of metal ornamentation in India in the form of Bidri a kind of surface ornamentation relived with silver and gold inlay, and Enameling an artwork where surfaces of various metals are subjected to color treatment and etchings.

Pottery & Stone Craft: A distinguishable variety of utilitarian and decorative products are fabricated by potters and craftsmen of Alwar, Bikaner, Jaipur, Kutch, Saurashtra, Kangra, Meerut, Hapur, Khujra, etc., under this handicraft category.

Stone Craft & Marble Inlay Work: Stones in different shapes, sizes and colors are sculpted, inlaid and polished to produce an artistic range of utensils, statues, candle stands, medicine grinders, lampshades, etc. This craft is extensively practiced in Bihar,
1|Page

Varanasi, Tamil Nadu, Rajasthan, Agra and Vrindavan.

Terracotta: Baked earth is shaped to produce a laudable variety of containers, jars, stools, statues, tiles, jewellery, etc.

Wood Craft: Craftsmen of Jammu & Kashmir, Uttar Pradesh, Gujarat, Karnataka and Kerala use different types of wood like Rosewood, Sandalwood, Teakwood and Shisham to produce items like furniture, toys, wall plaques, idols, etc.

Precious & Semi Precious Stones: Indian craftsmen exhibit their creative mettle by carving an eye-catching collection of jewellry using precious and semi-precious stones such as pearls, ruby, sapphire, amethyst, lapis, lazuli, etc.

Paintings: From floor paintings, wall paintings to phad paintings, an Indian handicraft clasps it all. Of special mention are the Miniature Mughal Paintings of Rajasthan and Uttar Pradesh, and Madhubani Paintings of Bihar.

Textiles: Skillful weaving techniques, vibrant colors and inventive designs combine to bring out the fascinating textile based handicrafts of India. Popular hand-woven fabrics include silk, brocade and figured muslin, and popular hand printed textile motifs include block and screen painting, kalamkari, batik, and bandhanis.

Cane & Moonj: Drawing on the spirit of rural India, Indian artisans create an inimitable line of cane furniture and moonj baskets that are traditional in outlook but comes with contemporaneity functional utility.

Carpets & Durries: The floor coverings of India, especially Indian carpets with their brilliant colors, fine weaves and unmatched designs are a rage in the global market. Premium quality carpets in India are available in three varieties Persian, Turkoman and Aubusson. Even durries and jute floor coverings of India are famed for their brilliance in quality and appeal.
2|Page

2.

Handicrafts Export Markets In India

Labor-intensive in nature, the Indian Handicrafts and Gifts Industry is a major revenue generator of the country providing employment opportunities to more than 6 million craftsmen throughout India. Today it enjoys a strong presence in the world market with a turnover of USD 1.9 billion. It has also shown a consistent annual growth rate of more than 15 per cent over a period of 10 years, with a steep rise from a mere 3.6% to a 10% share in global handicraft exports. Major Indian states that contribute to exportation of various handicraft items are Andhra Pradesh, Uttar Pradesh, Rajasthan, and Gujarat. Moreover, popular handcrafted gift items manufactured and marketed from India includes vases, candle stands, Christmas ornaments, pen stands, brassware, papier mache gift items, ceramic pots and handmade paper products in matchless variety and designs.

2.1. Country-Wise Export of Indian Crafts

Major buyers of Indian handicrafts are

TABLE:1
Art Metal wares U.S.A., Germany, U.K. & Italy Wood Wares U.S.A., U.K., Germany & France Hand Printed & Textiles & Scarves U.S.A., U.K. , Germany & Canada Embroidered & Crocheted Goods U.S.A., Saudi Arabia, U.K., Germany Shawls as Art wares Saudi Arabia, U.S.A. Japan & U.K Zari & Zari goods U.K. U.S.A., Japan & Saudi Arabia Imitation Jewelry U.S.A., U.K., Saudi Arabia & Germany Miscellaneous Handicrafts U.S.A., Germany, U.K. & France Source: www.india-exports.com

3|Page

2.2. Art Concentration Areas

A comprehensive range of handicrafts and gifts products is made all over India. Although it is quite difficult to limit a particular place for a specific craft, the following places are well known for their unique crafts. TABLE:2 Art Metalware Moradabad, Sambhal, Aligarh, Jodhpur, Jaipur, Delhi, Rewari, Thanjavur, Madras, Mandap, Beedar, Kerala, Jagadhari and Jaselmer Saharanpur, Nagina, Hoshiarpor, Srinagar, Amritsar, Jaipur, Jodhpur, Jagdalpur, Bangalore, Mysore, Chennapatna, Madras, Kerala & Behrampur (WB)

Wooden Artwares

Hand printed Textiles Amroha, Jodhpur, Jaipur, Farrukhabad, Sagru & Sanganer and Scarves Embroidered Goods Kutch (Gujarat), Jaisalmer, Baroda, Lucknow, Jodhpur, Agra, Amritsar, Kullu, Dharmshala / Chamba & Srinagar

Marble & Stone Craft Agra, Madras, Baster and Jodhpur Terracotta Zari & Zari Goods Agra, Madras, Baster, and Jodhpur Rajasthan, Madras and Baster

Papier Machine Craft Kashmir and Jaipur Artistic Leather Goods Imitation Jewelry lndore, Kolhapur and Shanti Niketan (WB) Delhi, Moradabad, Sambhal, Jaipur and Kohima (Tribal)

Source: www.india-exports.com

4|Page

2.3. COUNTRYWISE EXPORTS DATA OF HANDICRAFTS (EXCLUDING HAND

KNOTTED CARPETS) FOR THE YEAR 2010-11

TABLE:3 ` in Crores
Increase/ Decrease in % over 2009-10

US $ in Millions 200910 201011

31.92 65.88 102.47 206.98 79.04 53.26 66.66 138.43 32.54 658.18 245.43 39.58 581.15

Increase/ Decrease in % over 2009-10

S. NO.

COUNTRY

200910

201011
146.11 301.54 468.99 947.35 361.77 243.76 305.11 633.57 148.94 3012.45 1123.32 181.15 2659.90 24.56 21.53 21.31 21.06 22.81 20.88 22.68 22.31 22.83 21.02 21.04 25.31 18.83

1 2 3 4 5 6 7 8 9 10 11 12 13

AUSTRALIA CANADA FRANCE GERMANY ITALY JAPAN NETHERLAND UAE SWITZERLAND U.S.A. U.K. LAC OTHER COUNTRIES TOTAL

117.30 248.13 386.60 782.57 294.58 201.65 248.70 517.99 121.26 2489.19 928.06 144.56 2238.35

24.62 52.09 81.15 164.27 61.84 42.33 52.21 108.73 25.46 522.52 194.81 30.34 469.86

29.66 26.48 26.27 26.00 27.82 25.82 27.68 27.31 27.81 25.96 25.98 30.45 23.69

8718.94

10533.96

(+) 20.82

1830.23

2301.52

(+) 25.75

Source: Export Promotion Council for Handicrafts

5|Page

3. ANALYSIS OF THE FOREIGN TRADE POLICY 2009- 2014 ANNOUNCED ON 27.08.2009 WITH REFERENCE TO

HANDICRAFTS EXPORTS
Foreign Trade Policy 2009-2014 was announced by Honble Minister of Commerce and Industry on 27th August, 2009. The major highlight of the FTP is placed at Annexure I. A special thrust has been given to labour intensive handicrafts sector which is witnessing job losses in wake of the recession. A brief analysis on the provisions made in the new FTP in particular with the handicraft sector are placed below: PROVISIONS SPECIFIC TO HANDICRAFTS SECTOR 1. Three handicrafts clusters provided status of Towns of Export Excellence (TEE) (New Provision) Jaipur, Srinagar & Anantnag have been announced as Towns of Export Excellence for the handicrafts sector. This would enable upgradation of infrastructure and would provide incentives and focus support. 2. All handicrafts exports to be treated as Special Focus Products and entitled to 5% duty credit scrips as per S. No. B (vi) (g) of the new Foreign Trade Policy. (New Provision covering all items of handicrafts however, a limited number of items were earlier covered under VKGUY) All handicrafts exports would now be treated as Special Focus Products and entitled to higher incentives as per Sl. No. 3.15.2. Special Focus Products covered under Table 2 & Table 5 of Appendix 37D, shall be granted duty credit scrip equivalent to 5% of FOB value of exports for exports made from 27.08.2009 onwards. 3. 52 items added to the New Special Focus Products list. EPCH had requested the inclusion of 103 items in the New Special Focus Products list to DGFT and followed it vigorously through Ministry of Textiles. The efforts have yielded quite good results and 52 items have been notified as New Special Focused Products.
6|Page

These 52 items appears in Table No. 4 & 5 of Appendix 37D of the new Handbook Book of Procedures Vol-I. They shall be entitled to duty credit scrips of 5%. The handicraft items not elsewhere specified elsewhere are now also eligible under New Special Focus Products scheme as per entry No. 43 of Table 5 of Appendix 37D of Handbook of procedures. Earlier only selected items were eligible for the same. This entry will cover all new and innovative handicrafts items. Export Promotion Council for Handicrafts shall now certify that the exported product is a handicrafts product, if any doubt arises. 4. EPCG at zero custom duty for Technological Upgradation. The recommendation of EPCH to reduce the custom duty on EPCG (Export Promotion Capital Goods) from 3% to 0% has been accepted. Now EPCG shall be available at 0% custom duty for handicrafts sector .The export obligation shall be six times of the custom duty saved to be fulfilled in six years. The scheme shall be in operation till 31.03.2011. 5. Status holder to get duty credit scrip. To accelerate exports and encourage technological upgradation, additional Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of past exports. The duty credit scrips can be used for procurement of capital goods with Actual User condition. This facility shall also be available for handicrafts. This facility shall be available upto31.3.2011. All status holders will get duty credit scrips at the rate of 1% of the value of past exports. The duty credit scrips can be used for procurements of capital goods but subject to actual user condition.

7|Page

6.

Support for Green products and products from North East Focus Product Scheme benefit extended for export of Green Products; and for exports of some products originating from North East.

7.

MDA/MAI Higher allocation for Market Development Assistance (MDA) and Market Access Initiative (MAI) schemes is being provided. Special funds have been earmarked for the handicrafts sector.

GENERAL PROVISIONS MADE IN FTP INCLUDING HANDICRAFT 8. Focus Market Scheme - 26 new markets have been added under Focus Market Scheme. These include 16 new markets in Latin America and 10 in Asia-Oceania. The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%. 9. Market Linked Focus Product Scheme (MLFPS) - Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by inclusion of products classified under as many as 153 ITC (HS) Codes at 4 digit level. Some major products include; Pharmaceuticals, Synthetic textile fabrics, value added rubber products, value added plastic goods, textile made ups, knitted and crocheted fabrics, glass products, certain iron and steel products and certain articles of aluminium among others. Benefits to these products will be provided, if exports are made to 13 identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia and New Zealand). 10. DEPB - To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31-12-2009 till 31.12.2010. DEPB rate shall also include factoring of custom duty component on fuel where fuel is allowed as a consumable in Standard Input-Output Norms.
8|Page

11.

Import of Samples - To facilitate duty free import of samples by exporters, number of samples/pieces has been increased from the existing 15 to 50. Customs clearance of such samples shall be based on declarations given by the importers with regard to the limit of value and quantity of samples.

12.

EDI - To further EDI initiatives, Export Promotion Councils/Commodity Boards have been advised to issue RCMC through a web based online system. It is expected that issuance of RCMC would become EDI enabled before the end of 2009.

9|Page

4. Research methodology
Problem Statement:
Estimation of export of Indian handicrafts industry

Research Objectives
To analyze the provisions made in the Foreign Trade Policy in particular with the handicraft sector. To know the future trend of the total export of handicrafts. To find out the increase or decrease in the export of Indian Handicraft products from the last years data.

Research Design
Descriptive Research

Data Collection Plan

The researcher has made use of secondary sources like internet, websites, journals etc to get the required data.

Statistical tools
Trend analysis is used by the researcher to estimate the future exports of handicrafts.

Data Analysis Plan

Trend analysis

Benefits of the Study

1. It will give estimation about the future export of an Indian Handicraft 2. It will analyse the foreign trade policy with regards to Indian Handicrafts

10 | P a g e

Limitations of the Study

1. This research study is based on the data of 10 years of export of Indian Handicrafts i.e. short time so proper/accurate estimation in not possible. 2. This research work is confined to only Indian handicrafts. So we cannot generalize the result to other exports.

11 | P a g e

5. DATA ANALYSIS:

5.1. EXPORTS OF HANDICRAFTS

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. 10533.96 Cores in year 2010-11.

(Rs. in Crores)
Source: Export Promotion Council for Handicrafts

12 | P a g e

5.2. TREND ANALYSIS

TABLE:4
Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 total Total export X X^2 25 16 9 4 1 0 1 4 XY -42450 -30836 -29532 -20930 -13032 0 7288 28024

8490 -5 7709 -4 9844 -3 10465 -2 13032 -1 14527 7288 14012 8183.12 8718.94 10533.96 112803.02 0 1 2 3 4 5 0

9 24549.36 16 34875.76 25 52669.8

110 10626.92

Trend line: y= a. x+ b--------------------------------- 1 Sum of y=a. sum of x+n. b---------------------------2 Sum of(x.y)=a.Sum of (x.x)+b.Sum of x-----------3

Equation (3) 10620.92=a(110) + b(0) 10620.92=a(110) + 0 a=96.55 Similarly, in equation (2)

112803.02=a(0) + 11(b) 13 | P a g e

112803.02=0 + 11(b)

b=10254.82

Trend line:
Y=a.x+b Y=96.55(x) + 10254.82

If suppose x=0 Y =10254.82

If suppose y=0 0=96.55(x) + 10254.82

X = 106.21

Estimated for 2011-12:

Y =96.55(x) + 10254.82 =96.55(6) + 10254.82 =10834.12

Estimated for 2015-16:

Y =96.55(x) + 10254.82 =96.55(10) + 10254.82 =11220.32

14 | P a g e

5.3. Estimated data

Following table shows the estimated sales data of past 10 years, which has been found out using the trend line only so as to get a clearer trend line and making it clearer to compare between the actual and the estimated data. TABLE: 5 Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Estimated sales (Rs. in Crores) 9772.07 9868.62 9965.17 10061.72 10158.27 10254.82 10351.37 10447.92 10544.47 10641.02 10737.57 10834.12 10930.67 11027.22 11123.77 11220.32

15 | P a g e

TREND LINE
16000 14000 12000 10000 8000 6000 4000 2000 0

estimated actual

INTERPRETATION:
The intercept in the total export of an Indian Handicraft is 96.55 and slope is 10254.82. The intercept is the value of the line when X equals zero and b the slope and the slope quantifies the steepness of the line. It equals the change in Y for each unit change in X. In the export of an Indian Handicraft the slope is negative which indicates the positive or upward trend in the export of an Indian Handicraft. It is a good sign from the countrys economic point of view From the available data the estimated or forecasted export of Indian Handicraft in 2011-12 is Rs.10834.12crores

16 | P a g e

6.

Findings & Conclusion

Findings
It is seen that the exports are showing a fluctuating trend. The exports of handicrafts are gradually increasing since 1994-95 to 2000-01, from RS.3160 crores to Rs.8490 crores. After the slight decrease in 2001-02, the exports have again boosted up and have reached the peak in the year 2006-07 with exports of Rs.17288 crores. Because of the recession during the years 2007-08 and 2008-09 the exports have shown a downfall. After the implementation of Foreign Trade Policy 2009-14, and various export promoting schemes, the exports have shown a upward trend and it very near to the estimates in this financial year. So from the fluctuation of exports, trend of Indian handicraft industry is growing. Thus, from the trend analysis the researcher can say that export of handicraft is going to increase in upcoming years if all other factors remains the same. Though it is seen that there is vast difference between the estimated values and the actual values of the exports.

Conclusions
The Indian handicraft industry is of major importance with respect to Indian economy as it will help in generating more employment at lower costs. Moreover, labour is in abundance in India and hence effective use of manpower can be made. More foreign exchange can be earned thus. Hence such a industry can be a growth booster to the economy of a developing country like India. So various steps should be taken by government for upliftment of such industries and thus developing the economy at large. Thus in a changing world scenario, crafts products exported to various countries from a part of life style products in international market. The impact is due to the changing consumer taste and trends. In view of this, it is high time for Indian Handicraft industry to go 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.
17 | P a g e