Handicraft industry needs to seize the moment as China battles rising wages

JAIPUR: The devaluation of yuan in the past two days by up to 4% may have created a scare for exporters of handicrafts but the industry believes the tide has turned in favour of India as the largest exporter China battles rising wages and poor quality standards.
In 2014-15, handicrafts outpaced the overall exports growth expanding at a scorching pace of 18%.In the first two months of the current financial year, though the sector has lost some pace, still it has grown by 9% against the de-growth of 12% in the overall shipments.
"China is by far the biggest exporter of handicrafts. But the increasing labour wages and the appreciation of yuan by up to 10% prior to the Tuesday's devaluation have titled the scale in favour of India. That's why the segment is holding up pretty well even as the overall exports have shrunk," said Dileep Baid, president of Federation of Rajasthan Handicraft Exporters (Forhex), on the eve of the 4-day handicraft fair that is starting from Thursday.
He said this is the right time for the domestic handicraft industry to seize the opportunity and change the game so that the lakhs of artisans working in rural areas can get the economic incentive to pursue the passion and build on the tradition. "On account of continuous increase in labour costs in China, the margin of discount to Indian products has shrunk to a new low of about 22%. That's why more and more institutional buyers are turning to Indian manufactures," added Baid.
The Forhex fair is one of the very few events that is bringing out artisans and handicraft manufacturers from their homes and factories to a marketplace thronged by companies and retailers looking to place bulk orders. Although China, Bali and Italy still remain the destinations for many, the Indian manufacturers with their improved design sense and finesse in products have found resonance with interior designers who take sourcing decisions for high-end homes, hotels, offices etc.
"This year, interior designers from prominent hotel chains of the world operating in India are coming to the fair to understand the range, quality of products and apability of manufacturers to deliver large orders," added Baid.
Rajasthan is the second largest hub for handicrafts after Uttar Pradesh but it enjoys a leadership position in wooden products commanding about 70% market share in the country.
"While blue pottery, marble products and home textile are more identified with the state, in wooden furniture and handicrafts there is no %region that can compete with Rajasthan. In recent times, foldable products are gaining much traction and we expect further fillip to the segment from such a demand," added Baid.