India Craft & Promotional Gifts Industry

An Expert's View about Gifts, Games and Toys in India

Posted on: 6 Apr 2010

India’s craft and promotional gifts industry is an emerging sector that provides employment to almost 6 million people.


Although the line is large, its export capability remains under developed.As a result, the country claims a meager 1 percent share of the world’s handicrafts exports.


Nevertheless, a number of competitive advantages are seen to help develop the industry into one of India’s reliable export sectors. These strengths include high value-addition ratio, which allows suppliers to use low-cost materials and turn them into high-value finished products.


Another key advantage is low capital requirement that allows small businesses with limited funding to gradually develop into export-capable enterprises.


The bulk of the industry’s exports are shipped to the US and the EU, particularly the UK, France, Germany and the Netherlands. The UAE is another key overseas market.


Craft and promotional gifts from India come in a wide array of materials and styles that combine modern and traditional design features. Metal crafts dominate exports as it accounts for more than a quarter of total handicrafts revenue. Wooden crafts take up close to a fifth of turnover.


The majority of craft and promotional gift suppliers in India are small or midsize enterprises owned by local entrepreneurs. Most companies have been in operation for at least two decades, with a few having been in existence since the 1950s.


The capital, Delhi, and the states of Uttar Pradesh and Rajasthan are the main sourcing centers. Aside from these locations, companies maintain production facilities in West Bengal, Punjab, Kerala, Tamil Nadu and Uttarakhand states.


The industry recorded a dramatic 48 percent decline in the past year because of diminished demand due tothe global economic crisis. Aside from this, the line is faced with a number of challenges brought about by its low development level.


Foremost is insufficient institutional support for workers in terms of training and skills development regarding modern design trends. Higher material and labor costs are another cause of concern in the industry.


The following are some of the key trends we see in India’s craft and promotional gifts industry:

• Due to higher production costs, the majority of suppliers expect to raise prices in the next six months. While some will be keeping quotes level, none of suppliers featured in this report  will be cutting prices.

• Better business prospects are expected in the next 12 months as key markets recover from the economic downturn. As a result, many companies expect overseas turnover to grow significantly.

• Suppliers will continue to target the EU as their main export destination. An increasing number of makers are shifting focus to new markets.



The above is extracted from the Executive Summary of China Sourcing Report: India - Craft & promotional Gifts


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Posted: 06 April 2010

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