The Export Promotion Council for Handicrafts (EPCH), a non-profit organisation that aims to promote the export of Indian handicrafts, has anticipated that the country is likely to note around 3.5 per cent decline in its handicrafts export this year.
In addition to the GST (Goods and Services Tax) woes, the slow demand in the global market for the traditional products is also likely to impact the handicrafts export in 2017-18. The US, Europe, South America, Africa and China are the major export destinations of domestic handicrafts items that include houseware, home textiles, furniture, bamboo goods, fashion jewellery, etc. About 60 per cent of the country’s total handicraft exports go to the US and Europe.
Notably, exports from the sector, which employs about 7 million people, directly and indirectly, aggregated to Rs. 24,500 crores in 2016-17.
In view of the anticipated decline, EPCH Chairman O P Prahladka has urged the Government of India to immediately resolve the problems being faced by the textile traders related to refund of Goods and Services Tax.
Prahladka has reportedly also requested the Centre to kick-start a process to deal with the refund of taxes due to the liquidity crunch in the textile industry. “The handicraft exporters majorly in MSME sector are in crisis as about Rs. 3,500 crores are stuck,” he informed.
Further, the higher interest rates are making these exporters, who work on small capital, refrain from borrowing from banks. EPCH has requested the Government to increase the interest subsidy to 5 per cent from 3 per cent.
All these issues have impacted the handicrafts industry badly. Further, the Government is yet to fix any deadline for the GST refund.
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