July , 2018
Handicraft Industry as one of the major sources of foreign currency earnings for India
16:40 pm

B.E. Bureau

The Export Promotion Council for Handicrafts (EPCH) is responsible for promotion of Indian handicrafts. O. P. Prahladka, Chairman, EPCH spoke to BE’s Ellora De regarding export related issues.

Q. Which Indian handicraft products have good export viability?

A. The list includes art metal ware, wood ware, hand printed textile and scarves, embroidered and crocheted items, shawls, zari products, imitation jewelleries, incense sticks, perfumes (attar) and other miscellaneous handicraft products.

Q. Which countries are the major importers of Indian handicrafts?

A. United States of America and the European Union import around two-thirds of India’s handicraft exports. The US presently enjoys around 35% of our handicraft exports and is followed by UK that imports 7%, Germany imports 5%, Netherlands and France both import around 3%. Among the Asian countries, UAE imports around 10% of our handicrafts exports. Australia imports around 2%, Canada around 1.5% and Japan 1%.

Q. How much revenue does our economy earn annually from handicraft export?

A. For FY 2017-18, the export figure for Indian handicrafts was Rs. 23029.36 crore ($ 3573.49 million).

Q. What has been the impact of GST on handicraft export?

A. During the initial stages of GST implementation, some difficulties were faced by handicraft exporters. But things have settled down now. Compliance has also been simplified. Recently on July 21, 2018, the GST Council has reduced GST rates on a number of handicrafts items. This will also improve things in the handicraft sector.

Q. What policies have been taken by the government to promote handicraft export?

A. The provisions in Foreign Trade Policy for the promotion of exports include the Merchandise Exports from India Scheme (MEIS). Under this scheme, an incentive of 7% on most of the exported handicrafts is available by way of duty credit scrip. Under the provision involving duty free import of embellishments, trimmings, tools and consumables, the exporter can import items without imposed duty for enhancing the value of the export products. There is a limited list of 70 such items which are free of import duty. The Advance Authorisation Scheme (as given in Chapter IV of Foreign Trade Policy) also encourages the sector. Under this scheme, one can import duty free raw materials with export obligation. The Export Promotion Capital Goods (EPCG) Scheme (as given in Chapter V of the Foreign Trade Policy) states that one can import capital goods for the manufacturing of export items without paying duties with export obligation. Additionally, under the Export Oriented Unit [EOU] Scheme (as given in Chapter VI of the Foreign Trade Policy), one can import goods without payment of custom duty and export them without any restriction. The essential condition for an undertaking is to achieve positive export earnings. The Duty Drawback Scheme is operated by the customs department. On every shipping bill, duty drawback is paid in the bank account of exporter. The duty drawback rates are given in the duty drawback schedule which is released and revised every year. Input Tax Credit (ITC) is also available on inputs utilised into the production of the export product. Additionally, Integrated Goods and Service Tax (IGST) is also refundable on exports.

Q. What are the functions of EPCH?

A. EPCH emphasises the need for capacity enhancing, skill training, building entrepreneurship among the concerned agencies and persons of remote and rural areas. We also suggest promotional measures to the concerned agencies and persons. We aim at holding meetings and seminars for discussing ways to promote handicrafts and regularly arrange international trade fairs. Our organisation develops new handicraft items and promotes present ones. We participate in more than 40 international shows to promote Indian handicrafts. The council has undertaken special projects for entire north eastern region. EPCH has also initiated entrepreneurship courses for promoting handicrafts.

Q. What is your vision as the Chairman of EPCH?

A. As the Chairman of EPCH, it is my ambition to take Indian handicrafts export up to new heights. Apart from the regular functions of EPCH, reducing transaction related cost of exports, promoting ease of doing business in exports, increasing use of e-commerce and introducing new technology for enhancing export are our focus areas.


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