The handicrafts industry, with an average export growth of more than 10 percent per annum in the last five years and employing around 23 million people, has considerable potential for growth.

During the last financial year, the Indian handicrafts industry exported goods worth $3 billion.

The target of the Export Promotion Council for Handicrafts is $9.1bn by ‘09-10. While the USA, the UK and Germany have been the traditional destinations for Indian handicraft exports, exporters have recently begun to tap other markets too, such as Africa, Latin America and Central Asia.

However, to achieve the target there needs to be initiatives for increasing awareness level through aggressive marketing, and for providing the craftsmen with greater access to finance.

In its annual supplement to the Foreign trade policy ‘06-07, promotion of exports of handicrafts and generation of employment in the sector have been given priority. In its product and market focus scheme, the government has announced an additional duty-free credit facility of 2.5 percent of the FOB value of the export turnover for handloom and handicrafts.

The foreign trade policy ‘04-09, too, announced incentives in the form of establishment of handicraft special economic zones, duty-free imports of trimmings and embellishments and exemption of these items from countervailing duty. The Centre has already approved the establishment of three SEZs in Noida, UP and Rajasthan.

At present, India barely has a 2 percent share in global handicraft exports, although it is targeted to touch 4 percent in the next three-four years. Global exports and imports of handicrafts are still dominated by developed countries, with the US being the largest importer and the UK the largest exporter.

Recently, Indian handicraft and handloom products have come into the radar of many foreign buyers, who seem to be flocking into Rajasthan and Panipat, the hubs for handicraft and handloom products.

In Rajasthan, for instance, handicraft exports grew by 25 percent last year, higher than the industry average. Exporters in the state have also begun to tap emerging markets such as South Africa and South East Asia.

Excluding carpets, items like embroidered and crocheted goods have the highest share handicraft exports from India, of nearly 30 percent. Art metalware comes next, with a 27 percent share in exports. Among hand-made carpets, woolen carpets command the highest share.

While one-fourth of exports of these items head to the US, the other important markets are the UK and Germany. These three markets account for more than half of India’s handicraft exports.

While there is an increasing focus on the export market, India’s burgeoning middle class provides a market for utilitarian yet aesthetic products, with immense potential for growth.

However, effective marketing of the product within India is a major roadblock. The major problem in marketing the arts and crafts made in India is consistency of supplies, quality control and scalability of supplies.

Moreover, handicrafts are seen primarily as ethnic items, with little awareness of their utility and functionality.