Are our traditional handicrafts doomed to a slow death?

Are our traditional handicrafts doomed to a slow death?

Introduction

The success of business is largely characterised by its ability to differentiate itself from the rest. Customers want something unique and it is how businesses are able to make use of their best features for wooing over people that would ultimately lead to them growing faster than others.

The Indian handicrafts sector is a world famous sector that has attracted buyers from world over. Traders used to come to India since time immemorial because of its rich fabric.

Why Handicrafts are dying slowly?

Handicrafts industry is broadly divided into categories, first being the “premium” segment that would comprise of luxury products which are exported to overseas markets. These include kancheevaram saris of the south or Pashmina shawls of Kashmir.

The other kind of products include those which are selling to local markets and are relatively cheaper. It is easily noticeable that both segments are highly different in both reach as well as quality. But, it is essential to know where the business stands in the modern context. How a business is able to utilise modern management techniques or using technology is one of the essential factors that would differentiate itself from others. The know-how of the particular business is vital for any business to stay afloat and grow.

Besides this, businesses must be able to build good supply chain linkages. This means that a business may produce something but if it is not having good reach through distributors or other people, it would not be able to get the desired result. Lastly, there are other conditions such as government policies or regulations that actually impact any business nowadays.

We need to look at how the Indian handicrafts industry stands with respect to these factors. There is no doubt that Indian handicrafts are struggling. There were expectations that exports of these would increase post WTO but they did not as expected. Handicrafts exported were merely Rs 8,000 crore in 2010 and have been stagnating ever since.

Unfortunately, our neighbour China has a higher share in global handicrafts market and has been witnessing amazing growth after the meltdown that rocked the world for 3 years.

The biggest drawback of the handicrafts sector is that a chunk of it falls into the unorganised sector. It is unfortunate that while on one hand, the government is trying to promote entrepreneurship, a chunk of the entrepreneurs in this sector are affected due to poverty as well as other social injustices. In such scenarios, it is almost impossible for an entrepreneur to take risks. This is a critical reason for them being unable to adopt latest technology or skill based training to labour in the industry, a vital element of today’s business.

One of the reasons why businesses become big are through economies of scale. However, in case of handicrafts, the units are small and being poor, the people are unable put in the required infrastructure to scale up the business. The inefficiency in managing costs makes them fall weak vis-a-vis their overseas counterparts. Last but not the least, our government has not kept enabling policies to favour the sector in previous times.

There were no arrangements provided for handicrafts manufacturers in the form of “cheap credit” as has been the case with so many other industries. It was estimated that over 90% of the units do not have access to any form of credit. There are many cons surrounding this powerful sector today. But, one must not forget the various opportunities that come with the handicrafts sector.

India’s rich cultural heritage is known world over and this must be exploited in the best possible manner by the handicrafts sector. The villages of India have “social capital” and even though they lack easy finance options, formation of self help groups can address the problems of economies of scale in the sector.

One important thing which should be immediately done is to provide incentives to them for getting credit ratings done from standardized agencies that would address issues of scale as well as information and hence it would bring in the much needed capital in the sector.

Banks can play a critical role in financing these self help groups as has been demonstrated by other sectors over the last few years. The self help groups would also be able to bargain better and reduce the inefficiencies by improving supply chain, investing in technology as well as do skill training. A cluster based approach may be the possible solution in order to prevent infrastructure bottlenecks that the sector faces and hence entrepreneurs in the sector would be positioned to take advantage of the developments.

An important aspect for any business to be successful is the risk appetite. This can removed by ensuring that people in rural areas are provided with quality education enabling them to take better decisions. Lastly, the lack of skill development can be addressed through the government agency, National Skill Development Council which is involved in addressing the skill gap in the country in a big way.

Conclusion

Handicrafts can be made viable through a systematic approach as done in case of some big sectors today. No huge sums and no generous grants can take the sector ahead and rather a pragmatic approach of education, enabling policy environment as well as utilising core competencies can bring the glory back to India’s culturally rich heritage sector.