UNIT 9 GEMS AND JEWELLERY AND HANDICRAFTS

Structure

9.0 Objectives

9.1 Introduction

9.2 An Overview of Gems & Jewellery and Handicrafts Industry in India

9.3 Composition of Handicrafts

9.4 Recent Trends in Exports of Gems & Jewellery and Handicrafts

9.5 Strengths and Weaknesses

9.6 Export Promotion Measures

9.7 Future Prospects of Gems and Jewellery and Handicrafts

9.8 Let Us Sum Up

9.9. Key Words

9.10. Terminal Questions

9.0 OBJECTIVES

After studying this unit, you should be able to:

• Discuss an overview of handicraft industry in India

• Describe the composition of gems and jewellery and handicrafts.
• Identify the trends of exports of gems and jewellery
• Explain the trends of handicrafts.
• Evaluate the strengths and weaknesses of Indian gems and jewellery sector
• Discuss the strengths and weaknesses of Indian handicraft industry
• Explain the export promotion measures undertaken by the government.
• Describe the future prospects.

9.1 INTRODUCTION

Gems & jewellery and handicrafts are major emerging area of exports in Indian economy.
Indian handicraft industry is highly labour-intensive and employs over 7 million workers,

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majority of which are female artisans; whereas the gems and jewellery sector employs over
8.5 million people. The regional uniqueness coupled with tangible and intangible nature of
India’s craft heritage provides a competitive global advantage to these industries in the
international market. In this Unit, you will learn an overview of Gems and Jewellery and
handicrafts industry, recent trends of exports, strengths and weaknesses and export promotion
measures. You will be further familiarised with future prospects of Gems and Jewellery and
handicrafts.

9.2 AN OVERVIEW OF GEMS & JEWELLERY AND HANDICRAFTS INDUSTRY

IN INDIA

Gems & Jewellery

The gems and jewellery industry contributes 7% to the GDP of India and 10-12% of India’s
total merchandise exports accounting for the third largest commodity share. The
manufacturing sector of gems and jewellery consists mainly of SME (Small and Medium
Enterprises) units and is a major source of revenue generation. There are 10 special economic
zones (SEZ) for gems & jewellery in India where more than 500 manufacturing units are
located contributing 30% to the country’s total exports. India is the largest exporter in cut &
polished diamonds, lab-grown diamonds, gold jewellery and silver jewellery. Surat, Gujarat
is the manufacturing hub of world for jewellery manufacturing with 450 organised
manufacturers, importers and exporters. India majorly exports lab grown synthetic diamonds,
cut & polished diamonds, plain & studded gold jewellery, silver & platinum jewellery,
coloured gemstones, synthetic stone, imitation jewellery and articles of silver, gold and
others. Every 14 out of 15 diamond of the world is processed in India. Although the value
addition of gems and jewellery is low, but it contributes a high volume of exports.

Gems and Jewellery Export Promotion Council (GJEPC) was formed in 1966 with the
objectives to promote brand India, connect government and trade, uphold diamond integrity,
spread education, innovation and infrastructure etc. GJEPC organises various trade shows,
exposition and buyer-seller meets to increase the exposure of Indian goods.

Handicraft Industry

Handicrafts are defined as products or items produced through skills that are manual, with or
without the use of mechanical or electrical or any other processes. These products appeal to
the eye due to the characteristic of being aesthetic, artistic or ethnic or creative or being

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representative of culture whether traditional or contemporary. Handicraft products may or
may not have functional utility and can be used for the purpose of decoration or gifting.

The handicraft and handloom industry has been the backbone of rural India for decades.
Originally it was started in the rural areas as a part-time activity but has now been converted
into a significant economic activity due to increase in demand of these products over the
years. The unofficial sources indicates that the strength of artisans in India is as high as 200
million however only 7 million artisans are recorded as per official estimates. The wide
disparity in the number of artisans is due to the unorganised and informal character of this
industry. With 744 handicrafts clusters, more than 3000 craft forms & 35000 products and
millions of artisans in the country, India has the potential to make this industry a multi-
billion-dollar industry on getting the right support and conducive business environment. The
handicraft industry is based on self-sustaining business model where the craftsmen grow and
arrange their own raw materials. This sector is well known as a pioneer of zero-waste and
environment-friendly practices. The handicraft industry of India produces art-metal wares,
woodware, embroidered goods, handprinted textiles, zari goods, pottery, sculptures etc.

Export Promotion Council for Handicrafts (EPCH) was established in 1986 with the
objective to promote, protect, support, maintain and increase the export of handicrafts. The
council also engages in knowledge dissemination and provides advice to government and
member exporters. The other activities of EPCH includes organising delegation visits and
fairs, acting as a liaison between government and exporters and carrying out awareness
workshops.

9.3 COMPOSITION OF GEMS & JEWELLERY AND HANDICRAFTS

Gems & Jewellery: Following commodities form part of gems and jewellery industry and
exported from India.

• Articles of gold smith

• Articles of pearls
• Articles of precious/semi-precious stones
• Articles of silver smith
• Coloured gemstones
• Cut & polished diamonds
• Dust and powder

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 • Gold bar
• Gold jewellery
• Gold medallions & coins
• Imitation jewellery
• Lab grown diamonds
• Other articles of precious metal
• Pearls
• Platinum bar
• Platinum jewellery
• Rough diamonds
• Silver bar
• Silver jewellery
• Synthetic stones
• Waste and scrap

Handicrafts

India is home to more than 3000 craft forms with millions of artisans engaged in the process,
working on thangka painting in Ladakh and Himachal Pradesh, brassware in Haryana,
phulkari and bagh textiles in Punjab, basket-weaving in Uttaranchal, chikankari and zardozi
in Uttar Pradesh, ajrak and kite manking in Gujarat, block painting in Rajasthan, gond
painting in Madhya Pradesh, madhubani painting and mulberry silk products in Bihar,
choktse tables in Sikkim, crochet and lace work in Goa, sandalwood carving and banjara
embroidery in Karnataka, ikat work in Telangana, sikki grass products in Odisha, terracotta
products and warli art in Maharashtra, bamboo products in Arunachal Pradesh, Mizoram,
Meghalaya and Tripura etc.

Following commodities form part of handicrafts and are widely exported from India:

• Hand-knotted woolen carpets (including silk and synthetic carpets)

• Hand printed textiles and scarves
• Art metal wares
• Embroidered goods
• Crocheted goods

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 • Wood wares
• Zari goods
• Shawls
• Miscellaneous handicrafts.

9.4 RECENT TRENDS IN EXPORTS OF GEMS AND JEWELLERY AND

HANDICRAFTS

Trends in Exports of Gems and Jewellery

India ranks seventh in global exporters of gems & jewellery, with 3.5% share of the world’s
total exports. India ranks first in lab grown diamonds & synthetic stones, diamond jewellery
and silver jewellery with a share of 32.7%, 29% and 22% in the total world’s exports
respectively. The export of Indian gems and jewellery was valued at US$ 39.31 billion in the
year 2021-22, with a rise by 44% over the export of previous year i.e., 2020-21 (Table: 9.1
and Figure: 9.1).

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Table 9.1: India’s Export of Gems and Jewellery (value in US$ Billion)

Year Exports (in $ Billion)

2017-18 32.7
2018-19 30.9
2019-20 35.6
2020-21 25.5
2021-22 39.3
Source: Gems Jewellery Export Promotion Council

Figure 9.1: India’s Gems and Jewellery exports

The exports of all important segments of the sector have shown positive growth in the current
years viz. gold and silver jewellery, cut and polished diamonds, pearls, coloured gemstones
and synthetic stones (Figure : 9.2).

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 Figure 9.2: Gems and Jewellery commodities export growth in 2021 over 2019-20

The top export destinations for Indian gems & jewellery are USA, Hong Kong, UAE,
Belgium, Israel, Thailand, Singapore, UK, Netherlands and Japan. USA is the largest
importer of Indian gems & jewellery (Figure: 9.3). The imports valued at US$ 14.5 billion in
the year 2021-22, followed by Hong Kong at US$ 9.3 billion and UAE at US$ 5.7 billion.

Figure 9.3: Country-wise share of India’s Gems and Jewellery exports

Indian gems and jewellery industry is a net exporting industry indicating that the exports of
this industry are way higher than the imports to the country. The imports of gems and
jewellery to India have shown a decreasing trend in the last five years, with sharp decrease

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during the covid-19 pandemic due to the restrictions imposed on trade. The import has
increased in the year 2021-22 valued at US$ 26.65 billion due to the markets been resuming
to normalcy and rise in the disposable income of the consumers (Table 9.2).

Table 9.2: India’s Import of Gems and jewellery (in US$ Billion)

Year Imports (in $ Billion)

2017-18 31.69
2018-19 26.57
2019-20 24.53
2020-21 16.49
2021-22 26.65

Most of the raw material requirement of this sector is imported by India. Rough diamonds are
imported from Belgium, UK, Israel and UAE whereas gold is imported from Switzerland,
South Africa, UAE and Australia. The major countries for the import of Gems and Jewellery
to India are: Switzerland, UAE, USA, Hongkong , Belgium, South Africa etc. (Table: 9.3).

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Table 9.3: Major Importing Countries of Gems & Jewellery to India (in US$ million)

Countries 2019-20 2020-21 2021-22

Switzerland 14702 16319 20871
UAE 7867 9349 15925
USA 6240 5068 6842
Hong Kong 4794 4375 5937
Belgium 5124 3501 5802
South Africa 2064 3274 4321
Guinea 820 1432 3316
Peru 1425 1500 2317
Bolivia 843 1156 2063
UK 1774 1104 1798
Source: The Ministry of Commerce and Industry

Following are the trends in the sector:

1. Large Retailers/Brands: Two decades before today, the small retailers dominated
the market of gems & jewellery but in the coming years, growth in this sector would
majorly be contributed by large retailers/brands. Established brands like Tanishq,
Malabar, Joyalukkas, Kalyan Jewellers, Reliance Jewels are guiding the organised
market and opening opportunities for growth. Increasing penetration of large and
organised players provides variety in terms of designs and products.
2. Online Sales: Sales through e-commerce sites are expected to account for 1-3% of
the fine jewellery by the end of 2022-23. Trusted and large retailers like Tanishq,
Caratlane, Bluestone, Joyalukkas are able to sell their jewellery range even through
online portals. Traditionally, the customers had inhibitions about purchasing gems and
jewellery online, but with the latest development of AI (artificial intelligence) and
hallmarking, the online sales have been growing drastically.
3. Global Value Chains: It is a prominent feature of international trade where
intermediate goods and services from several countries are combined through
integrated production networks to produce the final goods and services. India
participates in manufacturing GVCs in jewellery sector by way of sourcing
intermediaries from abroad.

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Trends in Export of Handicrafts

The export of Indian handicraft sector has been growing rapidly due to exposure to the
artisans in trade and fairs organised globally and the support initiatives of government. The
Indian handicraft sector had been badly affected by Covid-19 pandemic with restrictions
posed on social gathering and hampering manufacturing. But with the markets being opened
up, this sector too has gained momentum.

India is among the largest handicrafts exporting countries of the world with a clear lead in the
handmade carpet segment. The total exports of Indian handicrafts were valued at US$ 4.3
billion in the year 2021-22, a 25.7% increase from the previous year (2020-21) (Table: 9.4
and Figure 9.4).

Table 9.4: India’s Exports of Handicrafts (value in US$ Billion)

Year Exports (in $ Billion)

2016-17 3.6
2017-18 3.6
2018-19 3.7
2019-20 3.6
2020-21 3.5
2021-22 4.3
Source: Export Promotion Council for Handicrafts

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 Figure 9.4: India’s handmade exports

India accounts for about 40% of the global exports of handmade carpets. The goods majorly
exported by Indian handicraft industry are embroidered & crocheted goods, woodwares, art
metal ware, hand printed textiles & scarves, agarbatties & attars and zari goods (Table: 9.5).

Figure 9.5: Product-wise percentage increase in exports

The top export destinations of Indian handicraft products are USA, UK, Latin American
Countries, Australia, Canada, France, Germany, Italy, Japan, Netherlands, UAE and

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Switzerland (Figure: 9.6). USA has been the largest importer of Indian handicrafts with a
share of 38% of the total export of handicrafts during 2020-21. The most exported handicraft
products to USA are handprinted textiles, zari goods, embroidered goods and shawls.

Figure 9.6: Country-wise share of India’s handicraft exports

\Table 9.5: Popular Indian Handicraft Products in the Top Export Destinations:

Country Popular Indian Handicrafts in Demand

USA Handmade carpets, handprinted textiles, zari goods, embroidered
goods, imitation jewellery and shawls
UK Crocheted items, handmade handicrafts, wood wares and imitation
jewellery and handmade carpets
UAE Handprinted textiles, embroidery goods and art metal wares
Germany Handmade carpets, handprinted textiles, imitation jewellery,
embroidery items, and art metals

Indian handmade carpets are exported to more than 70 countries of the world, primarily to
USA, Australia and Europe. USA is the largest importer of Indian handmade carpets with a
share of 57%, followed by Germany (6%), UK (5%) and Australia (5%). Carpet exports to
USA was valued at US$ 1.2 billion and to Germany at US$ 116.64 million during the year
2021-22.

Table 9.6: India’s Exports of Handmade Carpets (in US$ Billion)

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 Year Exports (in $ Billion)
2017-18 1.71
2018-19 1.77
2019-20 1.67
2020-21 1.87
2021-22 2.23
Source: The Ministry of Trade and Commerce

Indian handicraft industry is a net exporting industry meaning that the exports of the industry
are more than the imports. The trend of imports in the last five year shows gradual decrease
in the value of imports (Table: 9.7). The major countries importing handicrafts to India are
the South East Asian Countries.

Table 9.7: India’s Imports of Handicrafts (in US$ Billion)

Year Imports (in $ Billion)

2017-18 1.01
2018-19 0.92
2019-20 0.9
2020-21 0.657
2021-22 0.64
Source: The Ministry of Trade and Commerce

The following trends have off lately been noticed in the markets of handicraft:

Boosts from Tourism: The industry of tourism and handicraft grows together. Tourists
usually spend significant money on craft items and souvenirs that expands the opportunity for
artisans to produce and sell quality and efficient handicrafts. The steady rise in tourism due to
increase in the size of middle class group and higher disposable income has positively
affected this sector.

Increased Demand in Offices & Restaurants: There is rise in demand of handmade décor
accessories in offices, restaurants and homes. The handicrafts are also preferred in gifting
these days at personal level or from organisations end, adding further to the demand.

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Online Portals: The handicraft products are now available on online portals resulting in a
bolstering market growth of the sector. The customers have been welcoming online sale of
handicrafts and engage in extensive purchasing through e-commerce websites.

Check Your Progress A

1. Enumerate any five items of handicrafts export.

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2. Enumerate five major markets for gems and jewellery exports
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3. Enumerate five major markets for handicrafts exports
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4. Enumerate five major markets for the import of gems and jewellery.
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9.5 STRENGTHS AND WEAKNESSES

Strengths of Gems & Jewellery Sector

1. Skilled Artisans: Indian artisans possess specialised skills in processing small

diamonds, even below carat one. The Indian craftsmen have achieved excellence in
cutting and polishing diamonds, however small it may be small and that too manually.
India (specially Surat and Maharashtra) ranks among the big four diamond cutting
centres globally, the other three being Belgium, US and Israel.
2. Increase in Investments: The cumulative FDI inflow in gold and diamond ornaments
stood at US$ 1213 million between April 2000 to March 2022. Recently in 2021,

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 Malabar Group invested US$ 100 million in a gold refinery and jewellery unit at
Hyderabad.
3. Policy Support: In the year 2022, India and UAE have signed a Comprehensive
Economic partnership Agreement (CEPA) with the purpose of boosting export. CEPA
will now provide duty-free access to the Indian exporters in UAE market. The
government has also reduced custom duty on coloured gemstones and cut & polished
diamond from 7.5% to zero and 2.5% respectively in order to double the exports of
gems & jewellery to US$ 70 billion by 2025.
4. 100% FDI: The government of India has allowed 100% FDI in gems and jewellery
under the automatic route. The Indian company or foreign investor would not require
any prior approval from the Government of India or Reserve Bank of India (RBI) for
investing in this sector.

Weaknesses of Gems & Jewellery Sector

1. Family-Owned Operations: The gems and jewellery industry in India is fragmented,

unorganised and dominated by family owned operations. Around 96% of the players
in gems and jewellery have family owned businesses.
2. Dependency on Craftsmanship: The industry is highly labour-intensive. Even
though some of the activities in the cutting and polishing of gems are mechanised, the
sector is still dependent on skilled craftsmen for precision in diamond cutting.
3. Dependency on Import: This industry is highly dependent on imports for meeting its
requirements of raw material with rough diamonds accounting for more than 50% of
the total imports of gems and jewellery by India, majorly imported from Belgium,
UK, Israel etc. whereas the requirement for gold is fulfilled by imports from
Switzerland, South Africa, UAE etc.
4. Highly Influenced by Exchange Rate: Gems and Jewellery is an export-import
oriented industry and therefore is volatile to the exchange rate fluctuations. Any
variations have direct impact on the players of the industry.
5. Change in Fashion: Global marketing requires the exporters to keep pace with the
changing fashion particularly in the context of extremely high prices of diamond, gold
and silver. Change in fashion eventually leads to an end of demand and blocks the
capital of manufacturers or exporters with huge stock pile ups.
6. Too Much Emphasis on Diamonds: Although the industry has huge range of
products like gold jewellery, coloured gemstones, pearls, fashion jewellery, synthetic

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 stones yet too much emphasis has been given on diamonds only. Diamonds account
for more than 80% of the total exports and the potential of other items of gems and
jewellery remains unutilized.

Strengths of Indian Handicraft Industry

1. Wide variety of products: There is large variety and range of products available with
the Indian handicraft sector owing to its diversified culture, tradition and rich heritage.
The wide and diversified product range is serviceable to different markets.
2. Cheaper labour: There is abundance of labour available in rural and semi-urban
areas of India at cheaper rates to engage in manufacturing of handicrafts. Availability
of labour at cheaper rates also makes the prices of products competitive and provides
an edge to handicrafts in international markets.
3. Retail Infrastructure: Indian handicrafts are facilitated by diversified and supportive
retail infrastructure across the country. The retail infrastructure provides a ready
market, shelf-space, and customers for the handicraft products.

Weaknesses of Indian Handicraft Industry

1. Low Capital Base: The handicraft industry in India is dominated by rural artisans
who are mostly poor and depend on this industry for the fulfilment of their basic
needs. They do not have sufficient amount of capital, rather most of them start with
wastes as raw material and depend on assistance from government for their financial
needs.
2. Absence of Market Intelligence: The artisans are unaware about international
markets, their requirements, current market trends etc. With such absence of
knowledge and information, the craftsmen are not able to serve the market needs
right.
3. Low Penetration of Technology: This sector is highly labour intensive and even
though very few tools or equipment are used, they too are either obsolete or
unavailable to the craftsmen. This industry has been mechanized in most of the
countries but in India it still remains dependent on the artisans. The craftsmen also do
not possess adequate information about new technological developments.
4. Poor Institutional Growth: There is lack of co-ordination between private players
and government bodies leading to disruption of growth. With industries still confined

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 to rural and semi-urban areas, it is also not able to attract young & skilled labour and
tap potential markets.

9.6 EXPORT PROMOTION MEASURES

The Government of India is well committed towards aggressively promoting exports and has
declared the gems & jewellery sector as a focus area for export promotion. Some of the
export promotion measures undertaken for the gems and jewellery industry are as follows:

1. Creation of Special Notified Zones has helped in giving access of rough diamonds
to more than 500 domestic companies mostly comprising of SMEs. Previously,
merely 90-100 companies had access to rough diamonds for which they had to travel
to the trading centres in Belgium, Israel and UAE.
2. Common Facility Centres are to be set up in manufacturing clusters to provide
opportunities to small and medium manufacturers to use state-of-art technology at
common facilities to improve quality and productivity at optimum cost
3. Other Initiatives:
• Indian Jewellery Exposition (IJEX) centre has been opened in Dubai.
• Gold Monetization Scheme revamp
• Reduction in import duty of gold and cut & polished diamonds from 7% to
5%.
• Implementation of mandatory hallmarking.
• The Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs has
been extended up to March 2023.
• The GoI is providing 90% assistance for setting up common
production/processing centres, design centres, testing facilities including plug
& play facilities.
• Providing assistance of up to 80% of project cost to association for setting up
marketing hubs/exhibition centres.

The Indian handicrafts sector is economically viable with high value addition ratio, low
capital investment and high export potential. The government of India has been taking several
measures to increase and enhance the exports of this sector, below are listed few of these:

1. Comprehensive Handicrafts Cluster Development Scheme (Mega Cluster

Scheme): The programme follows a cluster-based approach to scale production and

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 infrastructure at handicraft centres located in remote regions. The clusters are
identified by central and state agencies for development and upskilling. The main
objective of this scheme is to improve the standard of living of artisans and generate
employment.
2. Theme Craft: It is an e-portal of government of India showcasing over 45000
products of about 9000 exporters and artisans. The main focus of portal is on 5
selected themes i.e., needle work, tribal crafts, natural fibre & eco-friendly crafts,
fashion accessories and festive decorations. The portal provides in-depth information
about the products, craft, sellers and government awardees in such craft.
3. Skill Development: The process of craft learning has changed dramatically with the
advent of new tools and technology. Skilled manpower, standardised production
processes, design database for handicraft products, efficient & quick prototyping and
communication skills have become indispensable requirement for the handicraft
sector. The government of India under “Skill Development in Handicraft Sector” has
developed the following programs to impart skills and train the human resources:
• Design and Technology Development Workshop
• Guru Shishya Hastshilp Prashikshan Program
• Comprehensive Skill Upgradation Program
• Improved Toolkit Distribution Program
4. National Handicrafts Development Programme (NHDP): Following programmes
of NHDP have been launched with the aim of improving the quality and production to
enhance exports:
• Ambedkar Hastshilp Vikas Yojana: It supports artisans with their needs of
technology, human resource development and infrastructure in collaboration with
Dastkar Shashktikaran Yojana. The objective of this programme is to mobilise
artisans into self-help groups and societies so as to facilitate economies in
procurement of raw material and bulk production. The aim of the programme is to
empower the artisans with design and technology upgrades, introduce new
techniques and develop prototypes, training and design workshops to impart
commercial market intelligence.
• Infrastructure and Technology Support Scheme: The aim of this scheme is to
develop world-class infrastructure to support the production of handicraft and
enhance the quality of products along with reducing the cost so as to enable

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 competition in the global market. To facilitate the sector, it would also ensure to
make available the required technology, design development, product
diversification and improve the resource pool of skilled people in the country.
• Research and Development Scheme: Under this scheme, an in-house team
conducts periodic surveys and studies on the production challenges of crafts
ranging from availability of raw materials, legal assistance, financial assistance,
access to technology, quality control procedures, product design flaws,
international certifications and any other issues. The findings of the research are
evaluated, solutions are found and plugged into the relevant scheme.
• Marketing Support and Services Scheme: This scheme provides financial
assistance to artisans that aids them in participating and organising trade fairs and
exhibitions within the country and abroad. The government also provides financial
assistance for social and welfare needs of the artisans, spreading craft awareness,
organising buyer-seller meets and demonstration programmes etc. Increasing
publicity and promoting brands is another significant component of this scheme to
improve visibility of Indian handicraft products in the international markets.

9.7 FUTURE PROSPECTS OF HANDICRAFTS AND GEMS AND JEWELLERY

Gems & Jewellery

• Adequate Infrastructure: India’s effective participation in GVCs (Global Value

Chains) in jewellery sector is adversely affected due to sub-optimal connectivity with
global transport networks and low transport capabilities causing delay at ports and
customs. While a lot has been done in improving transport linkages by rail and road,
and enhancing port handling capacity, ongoing efforts need to be taken to their logical
conclusion by the government.
• Process Larger Stones: India being one of the leading diamond processing centres of
the world, needs to shift its centre to cutting of large and medium size diamond stones
instead small stones. Currently, India is cutting and polishing small-sized diamonds
resulting in its high share in number of pieces exported globally but low share in the
value exported. India can increase its value share in total exports by processing larger
stones and moving up the value chain through forward and backward integration.

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 • Organised Sector: With rapid growth of retail sector in India, the unorganised and
fragmented sector can now be converted in to an organised sector leading to further
growth of the gems and jewellery industry. It would also provide an opportunity for
the Indian players to sell their products through the fast catching retail sectors.

Handicraft Industry

• Branding and Promotion: High-premium medium-volume exquisite master-piece

handicraft items that has high artistic content should be positioned in the niche market
at a higher price. Strong promotion and advertisement efforts along with branding as
“Handicrafted in India” mark could help in attracting customers to buy the product.
• Introduction of Technology and Mechanization: Home décor and furnishing
handicrafts will need introduction of technology and mechanization to enable mass
production, cost-reduction and quality-enhancement to be competitive in the global
market.
• Comprehensive Surveys: To provide need-based interventions so as to support
artisans, there is lack of adequate data on craftspersons. Authentic and adequate data
on the livelihood conditions, socio-economic status and details of their families are
needed for planning and policy making of this sector. Comprehensive studies and
surveys are to be done for building database that could help in devising suitable
interventions in the sector.
• Access to Markets: The government needs to develop systematic approach that
would open avenues for product design & manufacturing and nurture the intrinsic
value of craft skills leading to increase access to new markets.
• Online Visibility: Operational efficiency coupled with online visibility through e-
commerce websites will help capitalise the market opportunities.

In addition to above, the following three approach needs to be adopted to preserve

existing cultural heritage and to put this sector on high growth trajectory:

• To preserve and protect heritage / languishing crafts.

• To promote premium handicrafts products for the niche market
• Expansion of production base for life-style, utility-based and mass production
handicrafts products.

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Check Your Progress B

1. Enumerate three strengths of India’s handicrafts and gems and jewellery sector

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2. Enumerate three weaknesses of India’s handicrafts and gems and jewellery sector.

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4. Enumerate four measures undertaken by government for the promotion of exports of

handicrafts.

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9.8 LET US SUM UP

Handicrafts are known for their associated traditional values, aesthetics, quality, uniqueness
and craftsmanship. The traditional knowledge and craft practices are passed from one
generation to another through natural learning. The Indian handicraft sector has been
contributing substantially to export and employment generation. It employs a vast segment of
craft persons in semi-urban and rural areas and generates foreign exchange for the country
along with preserving its rich cultural heritage. The handicrafts sector has suffered due to its
unorganized nature along with additional constraints like lack of capital, education, and poor
exposure to new technologies etc. The government has been identifying challenges in export,
addressing them with necessary interventions, assisting SME units and exploring new
markets along with consolidating existing ones.

The gems and jewellery sector of India has been very popular due to the large scale
processing of diamonds. With exports rising over the years, the focus of this sector needs to
be shifted to processing large and medium sized stones instead of small stones that it
currently masters. The sector which was dominated by family businesses and was highly
fragmented is now changing its structure gradually. With large scale retailers entering the

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sector, it is on the verge of becoming an organised sector. The government has introduced
100% FDI and hallmarking along with other schemes to boost up exports.

9.9 KEY WORDS

1. Embroidered Goods: Goods that are formed by or ornamented with decorated needlework.
2. Disposable Income: The income available with people for spending or to save, after
deduction of taxes and social security charges (like provident fund, pension, etc.)
3. Artificial Intelligence (AI): The ability of a computer or robot to do tasks that are generally
done by humans because it requires human intelligence and discernment.
4. Foreign Direct Investment (FDI): The ownership stake in a foreign company or in aa
project made by a company or government from another country.
5. Forward Integration: It is a strategy under which a company expands its activities to
include the direct distribution of its products.
6. Backward Integration: It is a strategy in which a company expands its activities to include
tasks formerly completed by businesses up the supply chain.

9.10 TERMINAL QUESTIONS

1. Describe the composition of gems and jewellery and handicrafts. Sketch the scenario
of Indian handicraft industry.

2. Explain the trends of export of handicrafts and gems and jewellery from India.

3. Describe the strengths and weaknesses of gems and jewellery and handicraft
industries?

4. Describe the export promotion measures undertaken by the government of India to

boost exports of gems and jewellery and handicrafts? Explain the future prospects of
the sectors.

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