India’s industrialization and participation in the modern world economy is decades old. Nevertheless, millions of Indians still depend on indigenous modes of production, traditional skills and techniques to make a living based on handmade products. These craftspeople and artisans are the backbone of the non-farming rural economy.
Despite some instances of well-known design houses using handmade products and successful crafts-based businesses such as FabIndia and Anokhi, the majority of craft production remains unorganized and informal with its full market potential untapped, especially by the artisan, who more often than not struggles for sustenance. Propelled by loss of markets, declining skills and difficulty catering to new markets, a large number of artisans have moved to urban centers in search of low, unskilled employment in industry.
One of the biggest issues in India is that our markets do not recognize the true value of craft. When this value is recognized, and people become willing to pay a higher price for craft-based products, it would translate into higher wages for weavers and craftspeople and act as a boost to millions of rural-based livelihood opportunities associated with this sector. The economics however is not as simple, as finally it comes down to the conflict between pricing and sales. If you out-price goods, you sell only a limited number. If you don’t give craftspeople enough work, it kills the craft. Sustainable livelihoods will ultimately depend on finding a fine balance between the two. For example: Fabindia follows an inclusive model of capitalism, placing craft at the center of the quest for profitability and growth.
Economic Opportunities :
- Employment and income: The crafts sector has the potential to provide stable employment and income generation to diverse communities and to those with different levels of education.
- Migration: Promoting hand production in rural areas can effectively check migration of rural labor to urban centers and prevent loss of skills.
- Economic growth: The global market for handicrafts is USD400 billion, of which India’s share is below 2%, representing a tremendous growth opportunity.
- Competitive advantage: Artisans can serve as key drivers of specialization and competence in precision manufacturing, similar to Japan and Korea.
- Low energy requirement: Production processes used in crafts typically have a low carbon footprint and promote the use of locally available materials as well as natural and organic materials where possible.
- Social Empowerment: Crafts production represents an opportunity to provide a source of earning and employment for the otherwise low skilled women, thereby improving their status within the household.
- Return for future generations: Investing in artisans leads to a trickle-down effect on improving the health and education outcomes for future generations of the most marginalized populations.
- Handicrafts embody India’s history and diversity: Over many centuries, an extraordinary legacy has nourished Indian crafts across religious, ethnic and communal boundaries. They highlight the country’s unique cultural mosaic and offer a powerful tool for pluralism and co-existence.
Artisans are usually structured into groups through in formal contacts between traders, master artisans and low-skilled artisans. More formal systems of artisans’ organization involve following types of entities:
Self Help Groups (SHGs) are set up with the help of external technical intermediaries such as non profits or through Government schemes, and typically comprise 10-20 artisans, usually women. SHGs serve as a form of social collateral, enabling artisans to establish linkages with input providers such as raw material suppliers, microfinance institutions and banks, and downstream players such as aggregators and retailers.
Producer Companies are created as a for-profit legal entity in the Companies Bill in 2002 to enable primary producers to participate in ownership and contribute equity.
Private Limited Companies are for-profit legal entities that allow artisans to participate in ownership as shareholders, while enabling external funders to invest capital.