The Indian Handicrafts Industry: Craft Beyond the Label

India has always been a land of diversity. It has always welcomed various cultures and traditions. It is a country which has mixed its rich cultural diversity with the economy and markets. The handicraft industry is one of such industries. In India, the industry means more than just work, they are an expression of a particular community, ethnicity, or tradition, employing local craftsmanship and locally sourced materials. The handicrafts have evolved over the centuries, acquiring its present form which is aesthetically pleasing and culturally valuable. The folklores, the dialects, and the tribal lifestyles have inspired the prints. These handicrafts have, thus, shaped the value systems and the vision of the society.

Many of the Indian traditional crafts flourished as a result of noble patronage. During the Gupta Period of Indian History (mid-3rd century-5th century), crafts were highly demanded even outside the country. Under the Mughal rule, all kinds of crafts reached their zenith. However, the glory of the Indian handicrafts industry came to the end by the mid-19th century. This was attributed to the ‘Discriminatory tariff policy’, wherein heavy duties were charged on Indian goods entering Britain, India’s colonial masters, while English goods to India were charged nominal duties. This price discrimination, coupled with the growing popularity of machine-made goods was the last nail in the coffin. After India’s Independence in 1947, the emphasis was laid on heavy industries so as to tap the country’s manufacturing potential. Though not on a priority basis, efforts were still made to restore the lost legacy of Indian handicrafts, especially since they were used by Gandhi as part of India’s freedom struggle.

The All-India Handicrafts Board was established in November 1952 to identify the problems hampering the development of handicrafts. And the Handicraft and Handloom Export Corporation of India Ltd. was established for the promotion of handicrafts exports. While the institutional structure was apt, the vision was misleading. These institutions focused on promoting the handicrafts, without really improving the productivity of artisans through various incentive models. As a result, the exports grew, however, not up to their full potential.

The Doha Round negotiation of the WTO, in 2005, mandated the removal of quotas for at least 97% of goods from the least-developed countries. Post the negotiation, the Indian handicraft export was expected to improve. And the exports did rise from 155,876 to 170,000 in 2006. But in 2008-09, the exports fell to 80,000 as a result of a global meltdown. India’s share in the world handicraft market is an appalling 2%, as compared to the 17% market share of China. India is home to 6.8 million artisans, but local artisans and traditional craftsmen have failed to crack into the international market. The exports have been controlled by already flourishing designers and a handful of master weavers.

The handicrafts industry is largely cottage-based, predominantly located in villages and small towns. Based on Hirschman’s arguments, it is can be easily concluded that the success of any industry depends on the strength of its forward and backward linkages. For the handicraft industry, the diseconomies of scale occur in two forms: (i) high cost of access to markets for raw material (poor backward linkage), and (ii) high cost of access to output market (poor forward linkage). Poor transport infrastructure and facilities cut access to organised input markets. As a result, if the artisans wish to continue, they have to rely on middlemen, who charge higher prices.

Textbook economics tells us that the seller would sell his produce only in the market which offers the highest possible remuneration. In the handicrafts industry, the local artisans often get a much lower remuneration due to inaccessibility to the highest paying market. For example, jute handicrafts are gaining popularity in the cities (especially after plastic bans). However, an artisan producing in Murshidabad, West Bengal would not be able to take advantage of this due to lack of perfect information. He would be compelled to sell the produce at a lower price to a local trader. However, the trader exploits asymmetric information to earn higher profits in the cities.

Cultural Entrepreneurship entails creating organisations of arts, by and for artists, that are financially sustainable and viable and have a cultural and societal impact. This would enrich the artist’s work by providing support and services and generate more opportunities for collaboration and cooperation. For example, Bhu:sattva, a natural garment brand sources its garments from women self-help groups (SHG) in four districts of the Indian state of Gujarat. Here, community participation through SHGs improved the bargaining power of the artisans and made their businesses profitable.

Community participation can help revive a system more inclusive but similar to what is called the ‘jajmani’ system, credited for the evolution of crafts in the pre-British era. Promoting cluster development for skill training, quality improvement and policy support has been the objective of the SFURTI (Scheme of Fund for Regeneration of Traditional Industries). Reducing tariffs (such as 18% GST on Handicrafts) and giving subsidies will lower average costs, and certainly improve the ease of doing business for the handicraft industry.

The success story of the Japanese craft of ‘basket weaving’, gives us an example of how branding can help an industry survive. Product differentiation did not just save it from extinction, but also elevated it to an art form. The Indian handicrafts industry has failed to carve a niche in the international market as it has failed to effectively utilise branding and marketing techniques. Despite the finesse, their reach is extremely limited. On the other hand, US-based Lisa Fine and John Robshaw have gained recognition by branding the same crafts well.

Currently, the Indian government is focusing on the skills training of rural artisans under the ‘Deen Dayal Upadhyaya Grameen Kaushalya Yojna’, a policy for rural empowerment. Designers from the National Institute of Design (NID) and National Institute of Fashion Technology (NIFT) have developed courses to upskill Self-Help Groups (SHGs) and individual artisans. Soft skills training programmes in export marketing, packaging and technology are organised as well. With certification, artisans see a hike in their earnings. A unique initiative by the Union Ministry of Minority Affairs, Hunar Haat (literally, skilled hands) display the rich heritage and skills of master craftsmen from minority communities. This serves several objectives: social and financial inclusion, skill development and the preservation and marketing of cultural traditions.

If we wish to keep up a high price, a high supply has to be matched by high demand. In order to increase the demand, dissemination of information to potential buyers is the key. This can be achieved through better marketing techniques in print and electronic media. In India, the Ministry of Culture is responsible for the promotion of folk and traditional arts through micro-regional targeting via zonal cultural centers. The idea behind education is simple: make people feel connected to indigenous traditions and in turn, make them practitioners or consumers.

Bringing up a new generation of Art patrons is an innovative approach towards increasing demand. In a TED Talk, Joanna Taft shares her idea of establishing a unique high school in Philadelphia. In this school, the curriculum was crafted around Art and Languages along with conventional Science and Social Sciences. Taft’s idea can be applied in the Indian context by designing suitable interventions in the education sector. It is important that young minds do not learn facts in isolation and also learn how art and science developed in tandem. In this way, next-gen leaders, appreciative of art, can be nurtured. This one step would open immense potentials for the handicrafts industry in the long run whilst making a more cultured populace.

E-Commerce and the Internet have opened new opportunities for the handicraft industry. The online market has helped local artisans meet their prospective buyers, eliminating the need for middlemen. Government initiatives such as BharatNet for improving internet connectivity in rural areas would have socio-economic impacts for the sector. Conceptualising and implementing needed social, economic and technological interventions can help the handicraft industry reach a sweet spot in the international market, a place that is rightfully deserved.


Gurleen Kaur

I am a second year student pursuing Economics(H) from Delhi University. I am deeply interested in short stories in Punjabi and Sufi Poetry of Bulleh Shah. An environmentalist at heart, I firmly believe in building a sustainable society.

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