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!
Indian handicrafts are loved around the world for their superior quality, variety, and beauty. The export of handicraft items from India is a significant part of our economy as it employs millions of people. The industry is spread all over India with over 67,000 business owners creating handicraft items for export in India.
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 Indian Handicraft Export
India exported handicraft items 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:
- United States of America
- United Arab Emirates
- United Kingdom
- Latin American countries
When it comes to export potential, the following importing nations are popular for their love for Indian handicraft items:
- Shawls and art wares – Saudi Arabia, Japan, UK, and the USA
- Hand-printed textiles and scarves – USA, UK, Canada, and Germany
- Art metal wares – Germany, Italy, UK, and the USA
- Imitation jewellery – Saudi Arabia, Germany, UK, and the USA
- Wooden handicrafts – Germany, France, UK, and the USA
- Zari goods – Saudi Arabia, Japan, and the USA
- Embroidered and crocheted items – Germany, UK, Saudi Arabia, and the USA
The major states in India involved in the production of handicraft items for export are as follows:
- Uttar Pradesh
- Andhra Pradesh
The Indian government heavily promotes handicraft items for export from the country. 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 craftsmen affected by the COVID-19 crisis around the country.
Handicraft Items for 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. Additionally, the former are made all over the country using a variety of materials, including ceramics and even copper. However, the latter is a form of specialised arts 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:
- Cloth and floor paintings
- Stone art
- Handmade paper
- Textiles – block and screen painting, batik, kalamkari, bandhani
- Metal artefacts
Handicraft items made in India are highly sought-after around the world due to their individuality and great beauty. However, the industry is highly decentralised as it spread 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 on a full-time and part-time basis.
The following areas in India are famous for handicraft items:
- Jodhpur (Rajasthan) – wooden, seashell, and wrought iron items
- Moradabad (Uttar Pradesh) – art metal wares and imitation jewellery
- Narsapur (Andhra Pradesh) – lace and leather goods
- Saharanpur (Uttar Pradesh) – wooden and wrought iron handicrafts
- Thrissur (Kerala) – ivory, precious stones, and stone art
How to Export Handicraft Items from India
- First and foremost, individuals interested in exporting handicrafts from India must incorporate their business and obtain a company PAN
- Next, they must register with the Director-General of Foreign Trade and obtain a unique 10-digit Import Export Code (IEC)
- Further, to avail of benefits and other incentives provided by the government, 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
- Additionally, once they have all the required documents, companies can start looking for buyers in foreign markets. Companies must make use of government agencies in foreign countries to find contacts and vendors
- Lastly, businesses will have to partner with a reputed shipping company to complete order fulfilment on time. They might also need to make use of a customs housing agency to gain customs clearance efficiently and to prevent unnecessary delays.
To select what type of handicraft items to export, business owners will have to look into the following considerations:
- Overview of handicraft items for export from India
- Market history, past trends and future forecast
- Export statistics to set a competitive price for the product
- Research into Indian tariff law
- Moreover, communicate with other exporters and industry experts to find the right vendors and buyers
Documents Required to Export Handicraft Items from India
- Company Incorporation certificate
- IEC Code
- Export Promotion Council for Handicrafts registration certificate
- Goods and Service Tax registration for tax purposes
- MSME registration to avail benefits provided by the government
- Trademark registration to protect your brand identity
- Bank account statements and other financial documents
- ID and address proof of the business owners
- Proof of possession of the business premises
If you are planning to start an export business, this process can feel overwhelming. Don’t worry, Vakilsearch can make the whole thing easy for you. Moreover, leave things like company incorporation, obtaining your IEC code, GST registration, MSME registration, and trademark registration to us. Focus on the important aspects of your business while we get these done for you.