About
- India’s handicraft sector is not only a rich reflection of the country’s diverse culture but also a significant contributor to the nation’s export economy.
- The global market is increasingly showing interest in Indian handicrafts, including textiles, pottery, wooden carvings, metalwork, and handlooms.
- To support this growth and boost India’s position as a key player in the global handicrafts market, the Indian government has introduced a range of export incentives.
- These incentives are designed to enhance the competitiveness of Indian handicrafts, provide financial relief to exporters, and create opportunities for artisans.
Budget Allocation 2025
- The Union Budget of 2025 allocated ₹2,250 crore for the Export Promotion Mission (EPM) to help facilitate the export of handicrafts.
- The EPM will help exporters access credit, overcome barriers, and tackle non-tariff measures in overseas markets.
- The EPM will be a joint initiative of the Ministries of Commerce, MSMEs, and Finance.
Why Are Handicraft Export Incentives Important?
- Handicraft exports face unique challenges, such as high production costs, lack of awareness about international markets, and competition from cheaper mass-produced goods.
- Export incentives aim to address these challenges by:
- Reducing operational costs for exporters
- Boosting the export volume of Indian handicrafts
- Creating global demand for high-quality, sustainable handicrafts
- Supporting artisans and small-scale manufacturers
Key Handicraft Export Incentives in India
- Merchandise Exports from India Scheme (MEIS)
- Launched in 2015, the MEIS is one of the most significant initiatives to boost Indian exports, including handicrafts. The scheme provides duty credit scrips to eligible exporters, which can be used to pay duties or taxes on imports. The scrips can also be transferred, thus enabling exporters to reduce their export costs.
- Benefits:
- Reduces the overall cost of production, making handicrafts more competitive in the international market.
- Eligibility:
- Exporters must be registered under the Directorate General of Foreign Trade (DGFT) and have a valid Importer-Exporter Code (IEC).
- Rebate of State and Central Taxes and Levies (RoSCTL)
- The RoSCTL scheme offers rebates on embedded taxes and levies at the state and central levels. For handicraft exporters, this means that they can claim refunds on taxes that are not refunded under other schemes.
- Benefits:
- Helps exporters recoup taxes on raw materials and production costs, making their products more competitive.
- Impact on Handicrafts:
- Specifically helps export-oriented industries like handloom textiles, garments, and hand-woven products, common in the handicraft sector.
- Duty Drawback Scheme
- The Duty Drawback Scheme allows exporters to claim refunds on customs duties paid for importing raw materials used in the production of exported handicrafts. This reduces the burden on manufacturers who rely on imported materials.
- Benefits:
- Helps exporters reclaim input costs, effectively reducing the cost of production.
- Eligibility:
- Exporters need to file a claim with the customs authorities for the applicable duty refund.
- Interest Equalization Scheme (IES)
- The Interest Equalization Scheme offers a subsidy on interest rates for pre- and post-shipment export credit. This is designed to make financing for exporters more affordable and improve cash flow.
- Benefits:
- Reduces the financial strain on exporters, encouraging them to expand their operations.
- Eligibility:
- Exporters in the handicrafts sector who qualify for export credit can apply for the subsidy.
- Market Access Initiative (MAI) Scheme
- The MAI Scheme promotes the entry of Indian goods into international markets by supporting exporters in attending international trade fairs, exhibitions, and other promotional activities.
- Benefits:
- Provides financial assistance for market exploration, improving the visibility of Indian handicrafts abroad.
- Eligibility:
- Exporters who are members of recognized export promotion organizations, such as the Export Promotion Council for Handicrafts (EPCH), are eligible.
- Comprehensive Handicrafts Cluster Development Scheme (CHCDS)
- The CHCDS is aimed at strengthening the handicraft sector in India by developing handicraft clusters across the country. These clusters are supported with infrastructure, design assistance, and market access to improve their productivity and product quality.
- Benefits:
- Helps small-scale artisans improve their quality of work and gain access to better market opportunities.
- Impact on Handicrafts:
- The development of clusters ensures that artisans work in more professional environments and have access to modern tools and techniques.
- National Handicrafts Development Programme (NHDP)
- The NHDP is designed to facilitate the overall development of the handicraft sector. This includes initiatives like skill development, design improvement, and assistance in the marketing and export of handicrafts. The program also provides financial aid to artisans for upgrading their skills and adopting new techniques.
- Benefits:
- Strengthens artisans’ capabilities and promotes innovative designs that appeal to international buyers.
- Impact on Handicrafts:
- Encourages the creation of unique, high-quality products that stand out in global markets.
Role of Export Promotion Council for Handicrafts (EPCH)
The EPCH is a vital player in promoting handicraft exports from India. It helps artisans and exporters through:
- Organizing buyer-seller meets:
- Connecting exporters with international buyers, distributors, and retailers.
- Promoting products in international markets:
- Through trade fairs, exhibitions, and branding initiatives.
- Providing technical and market support:
- Ensuring that handicraft products meet international standards, thus expanding their global footprint.
The EPCH also facilitates export-related certifications, such as the Geographical Indication (GI) tag for handicrafts, which guarantees authenticity and quality.
Recent Developments and Future Outlook
- In light of the global economic challenges and the COVID-19 pandemic, the Indian government has been actively working to support handicraft exporters.
- For example, in 2020, the government approved financial support for specific handicraft clusters that were severely affected by the pandemic.
- The Varanasi Handicrafts Initiative:
- A Rs 2.8 crore initiative was launched to incentivize handicraft exporters in Varanasi, which is known for its rich tradition of weaving and artisan work.
- Looking ahead, the Indian handicraft sector is expected to benefit from the government’s push for digitalization, with e-commerce platforms opening up new markets for small-scale artisans. Additionally, as global interest in sustainable and eco-friendly products grows, Indian handicrafts—made using natural materials and traditional methods—are likely to become even more sought-after.
Conclusion
- India’s handicraft sector is a beacon of tradition and creativity, offering artisans a means to earn a livelihood and preserving ancient skills.
- With the government’s various export incentives, Indian handicrafts are finding their place in international markets, gaining recognition and appreciation.
- By leveraging these schemes, exporters can reduce operational costs, improve product quality, and expand their market reach, contributing to the growth of this vibrant sector.
- These incentives, when properly utilized, have the potential to transform the handicraft export landscape in India, empowering artisans, fostering innovation, and driving economic growth.
The future of India’s handicraft exports looks promising, and with continuous support and innovation, it can achieve greater heights on the global stage.
