EXPORT PROMOTION COUNCIL FOR HANDICRAFTS

“EPCH HOUSE”, Pocket 6 & 7, Sector-C, Local Shopping Centre

Vasant Kunj, New Delhi-110070

TEL:91-11-26135256(10 LINES) FAX:91-11-26135518-19

E-MAIL: ro.epch@spectranet.com, epch@vsnl.com Web : www.epch.com

A REPORT

TABLE OF CONTENTS

SL. PARTICULAR PAGE NO.

NO.

1. Preface 1

2. Objectives of the proposal 12

3. About the venue of the Buyer Seller Meet 20

4. Target countries for reverse BSM 27

5. Need for Reverse BSM 39

6. Target Beneficiaries 45

8. Response received from the BSM 46

9. Recommendations 53

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India has a vast production base for handicrafts (including carpets ), handlooms, jute and jute products etc. The growth in these sectors has been phenomenal in terms of employment and foreign exchange earnings. The Handicrafts, handloom and jute sectors have contributed substantially to the foreign exchange earnings. The growth of these sectors for the last five years is significant. The Indian Cottage sector has seen rapid growth in the past and is currently a Rs.60,000 crores plus industry.

In-spite of a vast production base in the above sectors, the opportunity for international marketing of these products is not adequately available to the Indian manufacturers / exporters.

Because of the higher marketing cost involved for introduction of any new product in the foreign market, exporters are unable to undertake aggressive marketing. Besides, the cost of participation in an international event abroad is very high. It has also been observed that these events give opportunity only to a handful of exporters who can spare substantial foreign exchange.

· The total World trade in Handicrafts, Gifts & Decorative is estimated at US$ 235 billions of which China accounts for 71 billion whereas India at 3 billion.

· Currently, marketing efforts of Indian exporters are driven by individual relationships and an India-specific integrated approach is lacking, which can be substantiated from the facts that individual exporters take part in international events and fairs establishing contact with the importers and are increasingly using the Internet for establishing new contacts.

· The need for an India specific cottage sector initiative was felt that could attract leading importers and stores to India.

· Most of the developed nations and even developing countries like China have set up national level, wholesale trade Marts to provide a fillip to the cottage sector exports.

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The world economy is no longer monopolized by the developed countries. The Western world has now realised that without Africa, Asia there can be no globalization. Since economic growth in developing and transition economies remains higher than growth in advanced countries, it is probable that within the next two decades the global economic map will change more than it has done over the last 20 years. Business firms in Brazil, China, India and Poland continue to gather momentum and they will gradually become major players in international markets. This will mean a fundamental change in the global corporate landscape.

An important aspect of the globalization process is the rapid change regulations affecting the international marketing environment. The world trading system is constantly spinning over new opportunities and creating new threats. Certain tariffs and quotas are removed but new technical norms, phytosanitary measures and anti-dumping actions are rendering the export trade more difficult for companies in emerging economies. While numerous subsidies are being eliminated and the bureaucracy of customs procedures curtailed, new rules on intellectual property rights, certification requirements or complex domestic regulations require export managers to respond to new regulatory challenges. The positive aspect of globalization is that the trend boosts productivity and living standards is most countries. It is often considered the force that enabled the world’s poorest nations in the 1950s to rise to their place today among the more advanced economies.

It is in this backdrop that strategies for the export sector at macro level have been formulated for the next 5 years which would be co-terminus with the 10^th Five Year Plan period. These strategies are in the nature of board directions giving a road map for the export sector in the Medium Term.

Policies and programmes specifying step-by-step sequence of action necessary to achieve the major objectives will have to be formulated based on this Strategy Document.

The Medium Term Export Strategy outlined by Government of India also provides attempts to provide this direction by focussing not only on products in which we have a revealed comparative advantage, but also identifying products which have real comparative advantage based on the potentialities. It is an attempts to provide a realistic mix of macro policies with sector specific policies and provides attainable goals with appropriate checkpoints.

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The cottage sector including handicrafts, silk, jute and carpets has over the years contributed significantly to the employment and foreign exchequer of the country.

However, despite the large production base the market at international level is still unexplored. The biggest constraint which the sector faces is the marketing of their products, especially in this era of globalization of information technology which has major influence.

The forces of globalization have created an environment of international competition throughout the world, leaving few niches of protection for the inefficient.

At the same time, the large-scale use of international marketing techniques is revolutionizing the way the world does business. It is in this environment that small and cottages sector have an increasingly critical role to play.

The basic reason is lack of focussed and aggressive international marketing network. The value of International Marketing Tools for the small scale sector

in general and cottage sector in particular is becoming increasingly manifest, not only from the functional point of view but also from the perspective of many opportunities that focussed marketing offers its users for participating in growing world trade.

In view of above background EPCH has envisaged a integrated international marketing initiative to launch an Aggressive Focussed Export Promotion Measures for quantum jump in the export earnings from the handicrafts sector which is the largest provider of employment in the country.

The proposal primarily aimed towards Aggressive Launching of Indian Cottage products by way of organzing Theme Shows throughout the year and motivate major overseas buyers, importers, departmental stores, chain stores and prominent journalists, editors of specific trade magazines to attend these shows.

A proposal under title “International Marketing Linkages for Handicrafts and other allied Products through Reverse BSM & Publicity Campaign“ has been envisaged for providing a platform for round ‘O’ clock international marketing of handicrafts, jute, silk, carpet and other synergy products and submitted to the Ministry of Commerce & Industry, Govt. of India.

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The Empowered Committee of Ministry of Commerce in its meeting held on 24^th January, 2005 has approved the proposal under Market Access (MAI) scheme for 100 buyers for each BSM in 1^st year for following 4 Buyer Seller Meets:

1. Indian Furnishing, Floorings & Textiles Expo (IFFTEX)

2. Indian Fashion Jewellery & Accessories Show

3. Stationery & Paper Products

4. Deco Festive India,06

The basic objective of launching of this specific project is to target Focused Buyers, Focused Countries & Focused Products. Today Indian Handicrafts & Gifts is a general terminology which includes thousands of product categories and overseas buyers are not able to source the products as per their requirements and choice. The reason behind is that the Indian Handicrafts & Gifts Fair being organized by EPCH for 4 days is not able to cater participation of large number of the products and similarly the overseas buyers are also not able to source in a short period due to the multi complexity of the product groups.

The need of today is to organize shows on product specific themes on regular intervals and target the specific buyers from different countries.

The broad objectives of the proposal is to provide institutional support to cottage, small scale and SMEs engaged in exports in their marketing efforts through long term planning and creation of support facilities. The priority areas will be:

1. Creation of new and improvement in the existing international marketing techniques / export opportunities of the cottage sector and SMEs exporting units.

2. Efficient utilisation of present potential of exporting small scale sector by creating a new concept of export marketing.

3. Creating an atmosphere of awareness of the concept of round “O” clock international marketing through permanent contact point i.e. India Expo Mart which is the first State-of-Art infrastructure facility created for the cottage sector in the international markets.

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4. To create a link between Indian craft industries which have limited international marketing facilities and the consumer market of Europe & USA and other developed nations.

5. Development of international network of marketing and product development expertise with the help of international product designers, trend-setters etc.

6. To bring together buyers and sellers around the world through out the year with focused publicity.

· ADVANTAGES FROM INTERNATIONAL BUYERS POINT OF VIEW

- A permanent contact point for buyer seller interaction.

- Reliable source of supply.

- Preference to buy from the country of origin.

- Ability to visit as per buyers' convenience.

- Efficient utilization of limited time of the buyers.

- Opportunity to source a large assortment of products and meet a large number of sellers at a single location.

ADVANTAGES FROM EXPORTERS' POINT OF VIEW

- Cost effective utilization of international marketing expenditure.

- Opportunity for exporters located at remote places of these states to met International buyers.

- Opportunity to meet a large number of overseas buyers at a single location throughout the year.

· ADVANTAGES FROM GOVERNMENT'S POINT OF VIEW

- To achieve higher exports of cottage sectors which includes handicrafts, silk, jute, carpet and other synergy products.

- To promote new products and languishing crafts.

- To promote new exporters / entrepreneurs and small & cottage exporters.

- To promote new craftsmen.

- To promote design development.

- Increased share of export earnings from the sector which have tremendous potential but due to lack of focussed export promotion measures can not be substantially achieved.

- To benefit the artisan, the actual manufacturer, from the exports.

- To increase employment opportunities.

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- To improve the level of livelihood of craftsmen.

- To launch Indian cottage sector in the world market for the first time in an integrated manner among the leading importers, departmental stores, buyers etc.

- No such effort have been made till date by any Governmental agency for the international marketing of the cottage sector with a definite business plan and an objective to increase the share of Indian Exports through state-of-art infrastructural international marketing hub.

· OTHER OBJECTIVES

- To establish specific integrated approach for cottage crafts which is lacking and currently marketing efforts of exporters are driven by individual relationship.

- Urgent need for specific cottage sector initiative that would attract leading importers to India which otherwise have China as a major destination point since no such facility is available in India where an overseas buyers can source their requirements round “O” clock.

- To bring buyers from round the world throughout the year and create new marketing opportunities for cottage sector.

- To create aggressive international marketing strategy.

- To fill the gap of inadequate infrastructure specially in the remote craft pockets.

- To achieve a quantum jump in the export earnings with the enhanced flow of trade.

VENUE FOR THE REVERSE BUYER SELLER MEETS – INDIA EXPO MART & CENTRE

The international trade fairs in India being organized by EPCH etc. provide a greater opportunity for a large number of foreign buyers to visit and meet a large number of exporters at one place.

However, the future of international trade fairs in India has to undergo a change. Buyers prefer to visit the country as per their own convenience and they cannot coincide their visit every time with the dates of trade fairs in India.

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As such, there is a need for a permanent contact point throughout the year where all potential importers or wholesalers can visit any time during the year and look for supplies which dispenses their needs for carrying high inventory. This kind of permanent contact point can create a window for our products by ensuring:

a) Permanent contact point throughout the year

b) Reliable supply

c) Quick turn-over

d) Capacity to absorb new techniques and designs.

Based on the above issues and theme of upcoming centralized export marketing centres as already been incorporated in Dallas (USA), Utrecht, The Netherlands, Japan, Shanghai etc. the idea of setting up India Expo Mart came into existence.

On the basis of the analysis of participation in various international fairs, organising Indian Handicrafts & Gifts Fair and various and feed back from the member exporters which are approximately 25,000 in number, there was strong justification for setting of this ambitious project.

The sector especially the target product categories i.e. handicrafts, handloom, jute, silk and similar product groups which are basically small and cottage level in general is not equipped with inherent expertise for Export Marketing and Development to respond to the changing trends.

· It is this background that India Expo Mart (IEM) has been conceived.

· IEM is thus envisaged as a nodal point where foreign buyers can meet cottage sector exporters round the year and where periodic exhibitions fairs could be organised.

· The India Exposition Mart has been conceptualised as a permanent display point for exporters in the cottage sector.

· This mart is a unique way of bringing together buyers and sellers from around the world throughout the year and would fulfill the following key objectives:

Ø New marketing opportunity for the cottage sector – nodal point of contact thereby reducing the effort involved in establishing contacts