Handicraft export is one of the top profitable markets to explore. While the potential is tremendous, setting it up might be a little harder. But fear not, we’re with you on the journey! 

Entering the global handicraft export market is a lucrative opportunity, demanding meticulous planning and execution. This blog outlines essential steps for successful international craft exports, covering market research, marketing strategies, pricing, compliance, partnerships, supply chain, packaging, logistics management, and performance monitoring.

Over seven million regional artisans work year-round to prepare handicraft items for export. Their amazing craftsmanship is sought after in both the domestic and global markets. However, there are several tariff laws, procedures, and registrations companies need to complete before they export handicraft items.

A Snapshot of Handicraft Export From India

The handicraft export from India worth $3.5 billion in FY 2019–2020, and the value of exports split according to various segments are as follows:

• Woodwares – $420.45 million
• Embroidered or crocheted goods – $320.51 million
• Miscellaneous – $517.68 million
• Hand-printed textiles – $154.96 million
• Imitation jewellery – $94.08 million
• Art metal wares – $250.52 million

The Major Destinations for Exported Handicraft Items from India are as follows:

1. United States of America
2. United Arab Emirates
3. Germany
4. United Kingdom
5. France 
6. Latin American countries
7. Italy
8. Netherlands
9. Canada 
10. Australia

When it comes to export potential, the following importing nations are popular for their love for Indian handicraft items:

1. Shawls and art wares: Saudi Arabia, Japan, the UK, and the USA
2. Hand-printed textiles and scarves: USA, UK, Canada, and Germany
3. Art metal wares: Germany, Italy, the UK, and the USA
4. Imitation jewelry: Saudi Arabia, Germany, the UK, and the USA
5. Wooden handicrafts: Germany, France, the UK, and the USA
6. Zari goods: Saudi Arabia, Japan, and the USA
7. Embroidered and crocheted items: Germany, the UK, Saudi Arabia, and the USA

The major states involved in the production of handicraft export from India are as follows:

1. Uttar Pradesh
2. Andhra Pradesh
3. Rajasthan
4. Gujarat
5. Kerala

The Indian government heavily promotes handicraft export from India. Recently, they raised the incentive rates for such products under the Merchandise Export Scheme from 5% to 7%. Such a move will help exporters of handicraft items recover their production costs while continuing to offer competitive prices.

In September last year, the government approved a fund worth ₹2.8 crores to develop the traditional artisanal industry in Varanasi. Further, such benefit schemes introduced by the Ministry of Textiles have helped thousands of artisans affected by the COVID-19 crisis around the country.

Handicraft Export from India

The two major categories under which the handicraft items from India fall are as follows:

• Consumer goods for daily use
• Decorative items 

While the former deals with utensils, cutlery, textiles, and other consumer goods that may be used in our day-to-day lives, the latter revolves around purely decorative showpieces, the former are made all over the country using various materials, including ceramics and copper. However, the latter is a form of specialized art that requires very technical craftsmanship. 

As a result, such pieces tend to be more exquisite and expensive, making them an ideal product for export. The Indian handicrafts industry is a fairly extensive one that deals in the following products:

1. Cloth and floor paintings
2. Stone art
3. Handmade paper
4. Textiles – block and screen painting, batik, kalamkari, bandhani
5. Pottery
6. Jewellery
7. Metal artefacts

Handicraft items made in India are highly sought-after worldwide due to their individuality and great beauty. However, the industry is highly decentralised as it spreads across various rural settlements around India. Most economists view the handicraft industry as the second-largest employment-providing sector (following agriculture), as it employs millions of artisans both full-time and part-time. 

The following areas in India are famous for handicraft items:

1. Jodhpur (Rajasthan) – wooden, seashell, and wrought iron items
2. Moradabad (Uttar Pradesh) – art metal wares and imitation jewellery
3. Narsapur (Andhra Pradesh) – lace and leather goods
4. Saharanpur (Uttar Pradesh) – wooden and wrought iron handicrafts
5. Thrissur (Kerala) – ivory, precious stones, and stone art

How to Export Handicraft Items from India

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1. First and foremost, individuals interested in exporting handicrafts from India must incorporate their business and obtain a company PAN.
2. Next, they must register with the Director-General of Foreign Trade and obtain a unique 10-digit Import Export Code (IEC)
3. Further, to avail of government benefits and other government incentives, companies must register with their respective Commodity Boards and Export Promotion Councils. Likewise, the Indian government established the Export Promotion Council for Handicrafts in 1986 under the Companies Act. Additionally, the EPCH is responsible for supporting, protecting, promoting, and increasing the overall export of handicraft items from India.
4. Additionally, companies can start looking for buyers in foreign markets once they have all the required documents. Companies must use government agencies in foreign countries to find contacts and vendors. 
5. Lastly, businesses must partner with a reputed shipping company to complete order fulfilment on time. They might also need to use a customs housing agency to gain customs clearance efficiently and prevent unnecessary delays.

To select what type of handicraft items to export, business owners will have to look into the following considerations:

1. Overview of handicraft items for export from India
2. Market history, past trends and future forecast
3. Export statistics to set a competitive price for the product 
4. Research into Indian tariff law
5. Moreover, communicate with other exporters and industry experts to find the right vendors and buyers

Documents Required For Handicraft Export from India

1. Company Incorporation certificate 
2. IEC Code
3. Export Promotion Council for Handicrafts registration certificate
4. GST registration for tax purposes
5. MSME registration to avail of benefits provided by the government 
6. Trademark registration to protect your brand identity
7. Bank account statements and other financial documents
8. ID and address proof of the business owners
9. Proof of possession of the business premises

This process can feel overwhelming if you are planning to start an export business.

10 Steps to Successfully Exporting Your Handicrafts To International Markets

10 Steps for a Successful Handicrafts Export Process:

1. Conduct Market Research:

   Thoroughly research the international market to understand preferences, needs, and buying behavior. Identify competitors, market trends, and regulatory requirements to make informed decisions.

2. Develop a Marketing Strategy:

   Craft a well-defined marketing strategy based on market research. Establish brand identity, determine pricing, and choose distribution channels. Utilize digital marketing tools and participate in trade events to enhance brand awareness.

3. Set Pricing Strategies:

   Carefully set pricing strategies by considering market demand, production costs, and cultural significance. Choose strategies like cost-plus, competitive, or value-based pricing and adapt to market changes for sustained competitiveness.

4. Secure Export Licenses and Permits:

   Obtain necessary export licenses and permits to comply with legal requirements and trade policies. Seek guidance from local trade organizations or legal experts to ensure thorough compliance.

5. Form Partnerships:

   Collaborate with established distributors or retailers in the target market to leverage their customer base and distribution channels. Build relationships through fair negotiations, understanding business models, and thorough research.

6. Ensure Compliance:

   Prioritize compliance with destination country regulations, customs, labeling requirements, and certificates. Adhere to labor laws and environmental standards for ethical and sustainable production.

7. Establish a Reliable Supply Chain:

   Identify and work with reliable suppliers, carriers, and distributors. Plan logistics, assess risks, and ensure compliance with regulatory and quality standards for timely product delivery.

8. Ensure Proper Product Packaging and Labeling:

   Invest in packaging that protects products and appeals to the target market. Include all necessary information on labels, complying with destination country regulations for language, certifications, and tariffs.

9. Manage Logistics:

   Choose a reliable shipping and logistics partner, package products properly, and consider shipping costs and time. Understand destination country customs and regulations to avoid delays. Track shipments and maintain communication for issue resolution.

10. Performance Monitoring:

    Monitor key metrics such as yield, quality control, lead times, and customer satisfaction. Regularly collect and analyze data to identify areas for improvement and implement corrective actions for a sustainable and profitable export business.

FAQs

How to Start a Handicraft Export from India?

To export handicraft items from India, you need to follow the export procedures and obtain an IEC Code (Import Export Code). You can also explore potential markets and establish partnerships with reputed shipping companies for efficient order fulfillment

How do I export my homemade products?

The process of exporting homemade products is similar to exporting any handicrafts, but you may need additional certifications or permits depending on your specific products. Ensure that your homemade products meet all safety and quality standards for export.

How to Start a Handicraft Export from India to USA?

To export handicrafts from India to the USA, you need to follow the export procedures, obtain the required licenses, and comply with the customs regulations of both India and the USA. It is also essential to identify potential buyers or partners in the USA to facilitate the export process

What is the export code of handicraft?

The HS (Harmonized System) code for handicrafts varies depending on the specific type of product. You can find the relevant HS code on the DGFT website or by consulting with a customs expert from Vakilsearch.

How do I start Handicraft export?

To start exporting handicrafts, you need to obtain an IEC Code (Import Export Code), identify potential markets, understand the export procedures and comply with the relevant regulations.

How to sell Indian handicrafts?

You can sell your handicrafts through various channels, such as: Online marketplaces Trade shows and fairs Retailers or wholesalers Craft stores and boutiques

What is the cost of export license?

The cost of an export license in India varies based on the type of product being exported and the export destination. It's advisable to consult with the relevant authorities or a professional from Vakilsearch to determine the specific cost for the export license.

How do I register for export license?

To register for an export license in India, you need to apply to the Directorate General of Foreign Trade (DGFT) through the online portal and submit the required documents and information. The process involves obtaining an IEC (Import Export Code) and complying with the relevant regulations.

How do I find customers for export?

Utilize online B2B platforms like IndiaMART and TradeIndia. Attend trade shows and fairs focused on handicrafts. Network with other exporters and handicraft associations. Utilize social media platforms like LinkedIn and Facebook to reach potential buyers.

What is the GST rate for handicraft?

The GST rate for handicrafts in India is generally 0% or 5%, depending on the specific product and its handicraft status.

Which handicrafts are in demand?

Handicrafts such as Indian home decoratives, handmade sarees, furniture, home textiles, precious gems and jewellery, and imitation jewellery are in high demand in the international market.

Is HS code required for export?

Yes, the HS (Harmonized System) code is required for export.