Introduction
The ability of a business to differentiate itself from the rest is crucial for its success. Businesses which are able to utilise their best features in the best possible manner to woo customers looking for unique products ultimately rise far ahead in the race from the competitors.
The Indian handicrafts sector is renowned in the world and has buyers from all over the world drawn towards it. India was a centre of attraction for traders across the world since time immemorial because of its quality fabric.
Slow Death of Handicrafts: Reasons
Handicrafts industry is comprised of various categories, the ‘premium’ segment being the first that include luxury products for export to overseas markets. Kanjivaram Sarees of the south or Pashmina shawls of Kashmir are a few examples of ‘premium’ products.
The other product category includes those for sale to local markets and are relatively cheaper. Both the categories are easily noticeable in terms of huge difference in both reach and quality. However, the important point to be taken into consideration is position of the business in modern context. Its ability to utilise modern management techniques or technology is one of the essential factors that would give it a unique identity and keep it ahead from its competitors. It is essential to have a know-how of the particular business for it to stay afloat and grow.
Moreover, businesses must be able to form good external and internal linkages in the supply chains. This implies that a business would not be able to get the desired result even after producing something worthy if it does not develop a network of distributors or other people to have a good reach among the consumers. Finally, other factors include government policies or regulations that actually affect any business in modern context.
We need to look at the position which the Indian handicrafts industry holds, taking all these factors into account. The Indian handicrafts are struggling as the exports of this business did not increase post WTO contrary to the expectations. Handicrafts worth a mere amount of `8,000 crore was exported in 2010 and have been stagnating ever since.
However, China holds a major share in the global handicrafts market and its business has been growing rapidly after the meltdown that shook the world community for 3 years.
The biggest impediment in the growth of the handicrafts sector is that a part of it comes under the unorganised sector. The irony is that on one hand, the government wants to promote entrepreneurship, while on the other hand, poverty and other social injustices make it difficult for a part of the entrepreneurs in this sector to survive. Such situations make it very difficult for an entrepreneur to take risks. This is why they have their own apprehensions to adopt the vital element of today’s business, such as, the latest technology or skill-based training to labour in the industry.
Businesses have witnessed rapid expansion through economies of scale. Unfortunately, in the handicraft sector, the units are small and the people are poor who are unable to set up the required infrastructure to expand the business. Their inability to manage costs put them at a huge disadvantage than their overseas counterparts. Finally, our governments did not come out with enabling policies previously to favour the sector.
No organised structure was established to provide ‘cheap credit’ to the handicrafts manufacturers contrary to the case with so many other industries. Over 90 per cent of the units were estimated to have no access to any form of credit. Many disadvantages are hampering this powerful sector today. However, the handicrafts sector provides many opportunities that should be borne in mind.
India is renowned worldwide for its rich cultural heritage and the handicrafts sector should be able to make the optimum use of this feature in its endeavours to grow. Indian villages do not have easy finance schemes available to them, yet they have the necessary social capital, which they can make use of by forming self-help groups to overcome the problems of economies of scale in this sector.
A crucial step to be immediately taken is to provide them incentives for getting credit ratings done from standardised agencies. It would help in addressing the issues of scale and information and bring in the required capital in the sector.
Banks could be crucial in financing these self-help groups, as has been the case with other sectors in the past. It will enable the self-help groups to bargain better and improve the efficiency by improving supply chain, conduct skill-based training and investing in technology. Entrepreneurs should adopt a cluster-based approach to prevent infrastructure bottlenecks faced by the sector. It would enable them to take maximum advantage of the developments.
A crucial feature of any business to be successful is its risk appetite. Thus, ensuring quality education for people in rural areas would enable them in taking better decisions. Finally, the National Skill Development Council, a government agency to bridge the skill gap in the country, could be engaged to address the lack of skill development
Conclusion
A systematic approach needs to be adopted to make handicrafts feasible as adopted in some other big sectors today. Instead of huge sums or grants, a pragmatic approach making use of education, policy and core competencies effectively can redeem the past glory of India’s culturally rich heritage sector.