Lekhraj Maheshwari, Chairman, Export Promotion Council for Handicrafts (EPCH) |

Handicrafts exports from India have surged in recent times. But this isn’t a reason enough to rejoice for Lekhraj Maheshwari, Chairman, Export Promotion Council for Handicrafts (EPCH). He feels India’s handicrafts exports are still far from matching potential. In an exclusive interaction with The Dollar Business, he reasons why more needs to be done to boost handicrafts exports from the country

Interview by Naveen Kumar | The Dollar Business

TDB: In FY2013-14 exports of handicrafts from India reached $3.8 billion, registering a year-on-year growth of 17.55%. What are your expectations from FY2014-15?

Lekhraj Maheshwari (LM): Handicrafts exports have been able to maintain a steady growth even during the period when many exporters saw significant decline in their average deal sizes, especially due to prevailing economic conditions in US and EU. Since we are still more than a month away from the financial year-end, it is difficult to quantify the financial year’s total exports at this point in time. However, taking cue from the performance in the last 10 months (till January 31, 2015) we expect that the growth this year would be about 25-30%. The total exports of handicrafts from India amounted to Rs.23,504.42 crore or $3,884.91 million last fiscal. The target for the current fiscal is Rs.32,670 crore and we are more than confident that it will not only be fulfilled but will exceed our expectations.

TDB: Apart from traditionally strong markets like EU, US and UAE, which other markets will drive India’s handicrafts exports going forward?

LM: Even when we try to explore and develop new markets we cannot ignore the importance of traditional markets. Therefore, we would like to keep the momentum going in established markets and will leave no stone unturned to make use of all possible growth opportunities in these markets. I am sure that exports to traditional markets will not only be maintained but will exceed our expectations in FY2014-15. However, at the same time, we should also not overlook the need to develop new markets for Indian handicrafts. In fact, soon there would be considerable export of handicrafts to new emerging markets like Latin America, Middle East, CIS, etc. Exports to China and Japan have already shown considerable growth, which will certainly boost exports of handicrafts further.

TDB: Which new product categories are in demand when it comes to handicrafts exports from India? And which are the major states that boast of maximum growth?

LM: Furniture and accessories is a new product line that has been gaining momentum over the last few years. There have been many innovations in furniture design or methods of production which has enabled the industry to cater to the needs of some high-end overseas markets. Another product line, which is quickly rising up the popularity chart, is fashion jewellery and accessories. In this group new products, particularly accessories, are added every now and then. Further, when it comes to state-wise exports we need to take into account the fact that handicrafts have a unique origin and most of the times they are identified with a particular region or geography. Although, of late, many new states have been registering good growth in their handicraft exports, it’s states like Uttar Pradesh, Rajasthan, Gujarat, Delhi, West Bengal, Andhra Pradesh and Karnataka that still boast of maximum growth.

TDB: How satisfied are you with the Market Development Assistance (MDA) scheme?

LM: We feel that MDA allocations have been reasonably satisfactory. The scheme has certainly helped us in promoting our products in several new markets across the globe. Just like many other export items we are also getting assistance from Export Credit Guarantee Corporation of India (ECGC). This takes good care of the financial aspects of the trade.

TDB: Handicrafts exporters have been long demanding duty free imports of embellishments, trimmings, tools and consumables used in the manufacturing of export products through expansion of the list of duty free items? When do you see it happening?

LM: There are many industries which are enjoying similar benefits. We want the government to extend these benefits to handicrafts exporters as well. We have been demanding this for more than a year now, but are still waiting to see any progress on this front. 

TDB: Are you satisfied with the current incentives offered by the government to handicrafts exporters? What are your expectations from the government on this front?

LM: We feel that the current export incentives are not adequate and the government certainly needs to do more to promote the growth of handicrafts exports. Our foremost demand from the government is that it should increase the duty drawback rates that were announced on November 18, 2014. We also want the government to increase the incentive available under Focus Product Scheme (FPS) from 7% to 10%. Apart from these, we want the government to add more items to the list of trimmings and embellishments and increase in its entitlement from 5% to 10% of FOB value of last year’s exports. All these measures will help boost exports of handicrafts from the country.

TDB: What initiatives are in the pipeline to boost handicrafts exports?

LM: EPCH has been promoting Indian handicrafts both in India and overseas through various mediums like trade fairs, exhibitions, delegations etc. We have also been holding seminars, workshops on various important issues related to handicrafts industry. The objective is to increase the awareness level of stakeholders involved in the handicrafts industry. We have been making extensive efforts to promote Indian handicrafts in emerging markets like Latin America, Common wealth of Independent States (CIS), Africa, ASEAN market and China in order to take the exports of handicrafts to new heights.