‘Handicrafts are a neglected lot’
Financial Express, India
Despite an appreciation of the rupee, handicraft exports grew 16.11% during April-March 2007 to $3.8 billion. However, this is just 1.6% of the $235-billion world market.
The sector, which provides direct employment to over 6 million people, needs to be nurtured to realise its full potential. The sector provides for highest capital employment ratio and there is no dearth of demands for Indian handicrafts. However, the sector needs to be competitive regarding prices and consistent in quality.
A cluster development approach could be an ideal solution to promote the sector in India and overseas. Clusters will provide round-the-clock infrastructure and common facilities for developing handicrafts, besides being cost effective.
Equally important is the need to market the products. Exporters of handicrafts, mostly from the cottage sector, do not possess the skills required for international marketing. The products need to be exhibited properly to foreign buyers and tourists. A beginning has been made at the India Expo Centre and Mart in Greater Noida. There is a need to build such centres at other important cities. This needs to be supplemented by Indian handicrafts centres in the US and EU, the major markets for such products.
The department of commerce has announced a scheme titled “Towns of Export Excellenceâ€, though nothing tangible is available under the scheme. There is need to establish handicraft SEZs in or near handicraft clusters to reduce costs and make them more competitive. There is also a need to modify the definition of manufacturing under Section 10-A of the Income-Tax Act, which needs to align with the definition given in the Foreign Trade Policy.
Environmental consideration is one of the key concerns of manufacturer and buyers. Handicraft exporters may be allowed duty-free import of pollution treatment plants like those available to leather exporters. The tools and equipments required by this sector need to exempt from duties. A 5% duty-free import entitlement needs to be expanded to take care of the changing requirements of today’s world. There is a seasonal demand for such products during Christmas and New Year. The industry needs to employ additional labour to meet the delivery schedule. However, the present labour laws deter creation of employment catering to seasonal demands of handicraft items. The law needs to be made flexible so that employment is created for absorbing additional workforce.