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Investment Opportunity in Handicraft Industry in India

Investment Opportunity in Handicraft Industry in India

The handicraft industry plays an important sector in the Indian economy. The country produces hand-printed textiles, art metal wares, woodware, zari goods, embroidered goods, imitation jewellery, sculptures, pottery, glassware, agarbattis, attars etc. Most of the manufacturing units of the handicraft industry are in rural and small towns indicating enormous market potential in all Indian cities and abroad. Moreover, the availability of handicraft products on online platforms has made significant efforts to bolster market growth in India. With the rapid increase in the travel and tourism industry, the demand for handcraft products is also increasing which makes this industry the appropriate one to invest in. The tourist spends a significant amount of money on souvenirs and other craft items, which will expand the opportunity for local artisans and craftspeople to produce & sell efficient handcrafts.

Furthermore, the rising demand for handmade décor accessories in homes, restaurants and offices and the rising demand for the gift industry is propelling the market growth in the sector. The handicraft industry is economically viable with a low capital investment with a high-value addition ratio along with high export potential. Henceforth, the investor willing to invest in the handicraft industry can avail the benefits of the large market.

Scenario of Handicraft Industry in India

The Indian handcraft market size has reached almost USD 3,968 million in 2022, which is expected to reach USD 6,218.4 million by 2028, indicating a growth rate of 7.7% during 2023-2028 in accordance with the latest report published by the IMARC. The expanding e-commerce industry is the primary reason for driving the handicraft industry in India. Besides this, various other factors including the inflating consumer disposable incomes and increase in the willingness of individuals to invest in vintage and high-quality handicraft products, are expected to further boost the market for handcraft in India over the coming years. With the wide range of craft skills and the number of artisans in the country, India has the potential to make this sector a multi-dollar industry. The value of handicrafts exports from India has reached Rs 25,706.3 crore in the FY 2020, which is segregated into woodwares at Rs 3,061 crores, Embroided & crocheted goods at Rs 2334 crores, Miscellaneous handicrafts at Rs 3770 crores, hand printed textiles and scarves at Rs 1,128, imitation Jewellery at Rs 6,850 crore, Art Metal wares at Rs 1824 cores. The key countries like the US, UK, UAE, Germany, France, Latin American countries, Italy, Netherlands, Canada and Australia are the largest import of India’s handicrafts. Henceforth, making the country to gain exponentially as the handicraft industry is expanding and gaining momentum. Therefore, the investor with low capital can invest in this sector and earn good profits.

Prospective Steps before Starting a Handicraft Business in India

The prospective steps that shall be taken by the investor before string the handicraft business in India are:

1. Market Survey

Since the handicraft industry is very wide in India, it is necessary to understand which product has the most demand in the India as well as abroad. Therefore, a market survey or research is necessary to understand the basics of this sector. In the handicraft industry, there are several products categories like Textiles & handlooms, jewellery, apparel & accessories, carpets, leather goods, paintings, garments, furniture, zardozi etc., so it is necessary to understand which type of product has more demand in a particular area in which the business is to be operated. The market research will help understand the targeted market and customise the product according to the customer’s choice. The market research gathers the data about the target market, such as pricing trends, competitor analysis and other such details. It also helps in understanding the pricing details regarding the amount a customer will spend on a certain item or what features or variety the customers are expecting.

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2. Defining Pricing

The pricing of the product is the most important part of any business. The pricing shall be as such it covers all costs from making to transportation. Henceforth, the business entity shall reasonably price its products so that they will be affordable for the customers. The foreign entity shall have strategies for its pricing in order to compete with others in the market. The product’s pricing shall be attractive to the customers and be good to generate revenue. The foreign entity can offer various incentives to customers, including keeping the price low compared to the competitors, such as one plus one offer etc. Since the handicraft market is a niche market, hence the customer base is narrow; hence the pricing strategy should be best suitable for the customer.

3. Strategy Branding

Branding the product is the key part of the business plan; it will imply the product’s genuinity and goodwill acquired by the company in the market. Henceforth, any foreign entity willing to maintain its name in the market shall have a brand from which it can be known. The brand image attracts customers towards the product. A proper branding strategy is to be done to create an image of the company in this small business. An attractive name, tagline, logo and product images will attract the customer. Since it is hard for the customer to trust a new brand, hence the foreign entity should adopt such measures so that it can directly or indirectly connect with them. The entity can take the help of advertisements in order to circulate information about their product across the country.

4. Setting up of Shop

After ascertaining the product and customer details in specified areas. The next stop will include setting up the store. Since the foreign entity cannot directly open a store in India, it needs to develop an arrangement through a partnership or joint venture. In this way, the entity may benefit from the already established customer base and be able to survive in the long run. The foreign entity may sell its products in the already established marketplaces, can offer its products in the wholesale market, sell to local stores and open dedicated stores of the company. Moreover, it is also pertinent to mention that shops shall be established at a place where the targeted customer resides. It shall not be far away from that area. Therefore, foreign entities can easily wish to sell their products in an orderly manner. 

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5. Accommodate With the Changes

The foreign entity shall change to accommodate with the changing environment and it shall adopt such business plans and policies that are best suited to the customer needs. The foreign entity shall always look at opportunities to expand its business across various parts of the country. Since the experienced craftsman channelises the handcraft industry, the entity shall also offer incentives to them so that they can give a long commitment to the company. With the rising demand, the supply of the product should not be interrupted in any way and at the same time it shall refrain from using any unfair malpractices to increase its prices. Looking at the modernisation in the technological field the entity may offer its products through E-platforms and acquire a large consumer base.

Some of the Profitable Business Handicraft Ideas in India

The profitable business ideas in the handicraft industry for a foreigner will include:

1. Bamboo crafts: This is a highly popular eco-friendly craft. the bamboo crafts will include a huge range of products, including baskets, dolls, toys, chalani, furniture, mats, umbrella handles, wall hangings, khorahi, crossbows, Kathi, jewellery boxes etc., although bamboo crafts are most prevalent in Tripura, Assam and West Bengal due to the presence of skilled worker, the business can be established and started using hand tools and equipment.

2. Brassware: The brassware items are highly durable, which makes them highly popular. The brassware items will include statutes vases, table tops, perforated lamps, wine glasses, plates and fruit bowls are among the popular products in the brassware industry.

3. Baluchari Saree: Thebaluchari saree are the product of the Bengal. However, it has become popular across the globe due to its unique designs and craftsmanship of weavers of Bengal. The nature of the fabrics used to make the product is unique; it is very fine and transparent. Although it takes a long process, even an experienced weaver takes almost 20-25 days to complete weaving the product with exquisite design. However, the business is very profitable and this product usually acquires good profit.

4. Embroidery products: The embroidery products have the highest market share in the world. In addition to this, the setting up cost of the embroidery business is comparatively easy as the machines are also available in the market and there is an abundance of skilled manpower who knows how to use the product. However, handcrafted products have comparative demand in the upmarket population.

5. Enamel Handicrafts: The enamelling is the process of firing a vitreous or glass-like coating on a metallic base. Particularly in India, it is a traditional industry and still, this type of product is hugely popular. The product of enamel handicrafts ranges from home décor to utility items. The entity may also choose different types of the manufacturing process and offer new products to the customers.

6. Glass handicrafts: The glass handicrafts business is a growing industry in India. There is a wide range of products in this category which will include blown glass, flower vases, glass trays, glass jars, glass jugs, perfume bottles, glass bowls, photo frames, hand-painted glass, lanterns, wine accessories, hurricanes etc.

7. Jute handicrafts: The Indian jute industry is the largest in the world with high production capacity. A thousand items can be made from jute, among which some of the popular activities are: jute fashion accessories, home décor items, upholstery items, designer bags, etc.

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8. Marble Handicrafts: Themarble handicraft industry is a booming business in India. Generally, marble handcrafts use the precious stone to make the product. A marble or a precious stone are carved out and then placed with each other in order to achieve the finished product. A wide range of finished marble products are used in décor items.

9. Pottery items: The pottery items like clay pots, jewellery, decorative items etc., are very popular items in the country. Besides the world-famous terracotta form, the country offers different kinds of products in red ware, grey ware and black ware. Henceforth, the entity can invest in the pottery business and can offer its products to consumers.

10. Shells handicrafts: The shell handicrafts are the most demanding and polar among the categories of the handicraft industry in India. The entity can make shell craft items out of the 3 types of shells the conch shell, seashell and tortoise shell. The shell are used in a wide range of products, including bangles, forks, lockets, jewellery, buttons, mirror frames, chandeliers etc.

11. Weaving and dyeing crafts: The weaving & dying crafts is the process of making clothes by crossing two sets of thread over and under each other. Some of the products, which includes weaving & dyeing crafts, are sarees, kurta and such other relevant products.

Government Initiatives

The government plays an impost role in uplifting the handicraft industry in India. In order to increase investment in this sector, the government has framed the following policies:

1. National Handicraft Development Programme (NHDP)

The programme’s main aim is to increase the knowledge of the handicraft industry about new design trends and colour forecasts. The programme aims to increase India’s exports by increasing the new design-led product. The programme’s main component is carrying out surveys, upgrading design & technology, developing human resources, providing insurance and credit facilities to artisans, R&D, infrastructure development and marketing activities.

2. Comprehensive Handcrafts Cluster Development Scheme (CHCDS)

The programme aims to assist artisans and entrepreneurs in establishing world-class units with cutting-edge technology, modern infrastructure, market linkages, adequate training and product diversification. Other components of the programme will include baseline surveys, activity mapping, skill training, improved tool kits, marketing events, publicity, seminars, design workshops, capacity building and many more. Raw material banks, common facility centres, emporiums, common production centres, trade facilitation centres, and design and resource centres shall also be granted under the scheme. Domestic marketing events including Gandhi Ship Bazaar and Exhibitions, are organised to provide artisans with a domestic marketing platform.

3. Design & Technology Upgradation

The scheme aims at the upgradation of artisan’s skills, development of new designs & prototypes, supply of modern or improved equipment to crafts persons, revival of traditional heritage, preservation of traditional arts & crafts of high aesthetic value etc. Other main important components of the scheme are providing financial assistance to institutions for design & technology development in the handicraft industry and skill upgradation.

Conclusion

The handicraft[1] industry in India is seen as adding value to the Indian economy. It is a traditional industry which is carried on by skilled artisans. The business opportunities lying in this industry are very large, as the availability of raw materials and skilled man force are in abundance. Therefore any entity that wishes to invest in the handicraft industry can sustain itself in the long run by earning considerable revenue. The government, with the aim to revive this industry, has introduced various schemes and started many initiatives. Henceforth making it the best industry to invest in.

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