Saurabh Gupta | 27 Oct, 2009
Handicrafts exports is still fighting for its revival. The demand for handicraft goods in western countries is still not picking up and so the council is exploring other markets too, says EPCH Chairman Raj Kumar Malhotra in an exclusive interview to SME Times.

Excerpts of the interview...

We got to know a very surprising growth of handicrafts exports in the month of September 2009. Could you please shade some light on this?
R. K. Malhotra: India’s handicrafts exports increased by 177 percent in September this year, raising hopes of a turnaround in the country’s overseas trade that has been battling global recession for the last 11 months. Exports of handicrafts, 71 percent of which are picked up by customers in the US and EU, increased to $46.87 million in September this fiscal, against a mere $16.88 million during the same month a year ago.

So this means that now handicrafts export is reviving?
R. K. Malhotra: No…actually September month is the month when we are shipping all the Christmas season goods in this month so the figure immediately shoot-up and the actual figure will come out after Christmas i.e. after December or in new year.

We are still fighting for the revival of this sector because these figures are just misguiding. I am telling you that in September all the Christmas sale is already done actual figure will come after New Year when we actually get the sale figures for the whole year.

What council is demanding from the government?
R. K. Malhotra: We are advocating for 100 percent tax exemption on profits earned from exports of all handicrafts products for another few years so the sector can revive from global economic recession.

Previously under section 10A and 10B of Income Tax Act there was no income tax on exports of wood-based handicrafts but on 31 March 2009, the government has pulled back the 100 percent tax exemption on profits earned from exports of wood-based handicrafts. We strongly oppose this move of our government because the process of tax submission is very problematic in compare to the small amount of tax revenue.

We are demanding for exemption of service tax for the services related to exports and interest rate subvention for small exporters. Along with this we are also suggesting that the government is required to involve handicrafts sector in other subsidies and benefits, which are meant for other sectors.

Did you get some kind of assurances from the government regarding the same?
R. K. Malhotra: We had discussed this with the ministry of textile, but we didn't got any relief from them. The Ministry of textile said that this the issue related to the ministry of finance. The process of tax submission is also a hassle for small exporters too.

Now rupee is further appreciating in terms of USD. What is your said on this?
R. K. Malhotra: Yes very true…see as we all know that now rupee is further appreciating against USD, which affects exports of handicrafts and so we are looking towards the government for some kind of help in this direction.  

Do you agree that now demand is picking up in US and EU nations?
R. K. Malhotra: See the demand in EU and US is still not picking up and so we are trying to focus on new unexplored markets where the demand is still strong to offset the losses we are suffering due to lack of demand from major importers like US and EU. Major competing countries for India in the world market are China, Hong Kong, Thailand, Indonesia, Taiwan and Turkey.

What council is doing for promotion of small exporters?
R. K. Malhotra: Under the guidance of ministry of textile and Development Commoner (Handicrafts) we have undertaken regress steps of publicity and awareness programmes among exporters and lightened with the government schemes with a view to over come the recession and to explore the scopes of handicrafts exports . Handicraft expo is also a part of our publicity and awareness mission. With a view to enhance export growth from 2 percent to 4 percent we seek support form the government. We are also concerning the government to change the present schemes as per the requirement of the sector. Our small manufacturers are required to be more innovative and quality conscious.