India plans overseas warehouses to boost handicraft exports

Thursday, 12 September 2002, 19:30 IST
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NEW DELHI: India plans to set up handicraft warehouses in the U.S. and Europe to cut down delivery time for exports and to have better market access. Besides handicrafts, the warehouses will provide a platform for exporters of carpets, jute goods and gems and jewelery. The Export Promotion Council for Handicrafts (EPCH) has started work on a feasibility study to set up four warehouses initially, with the help of the commerce ministry. The EPCH will provide around 250 million for the project under its market access initiative. "The total project cost is estimated to be around 550 million, with the commerce ministry providing us the initial funds of around 250 million to lease and refurbish the warehouses. We hope to have four warehouses operational by June-end next year," EPCH executive director Rakesh Kumar told IANS. Warehouses have been set up by other countries in these markets. EPCH as the co-coordinating agency for handicrafts and other sectors is planning to set up two of the initial four warehouses in the U.S on the east and west coasts and one each at Hamburg in Germany and Rotterdam in Holland. The initiative is part of India's efforts to garner a one percent share of the global trade in handicrafts by 2007, up from 0.67 percent now. This would require a compounded annual growth of around 11 percent in handicraft exports. During 2001-02, for the first time, India's handicrafts exports registered a 2.67 percent dip to 67.69 billion. During April-August this year, the handicraft exports have shown an upward growth, with a 12.02 percent rise in rupee terms. In the first five-months of the current fiscal, 25.66 billion worth of handicrafts were exported, against 22.91 billion during the same period in 2001-02. "Having a warehouse in these port cities would enable exporters to give ready delivery within a week for some of the fast moving products, instead of the 100-150 days taken for deliveries now. This system would also reduce transaction costs as buyers would not be able to withhold payments with the immediate nature of deliveries," said Kumar. As warehouses are readily available in the chosen port cities, EPCH is planning to lease them to display and stock merchandise for ready supply to wholesalers and importers. The installation of a management and information system (MIS) will allow the exporters and buyers to keep track of the movement of the goods to and from the warehouses. "Initially, around 50 major handicraft, carpet and gem and jewelery exporters will be participating in the project, with more joining in later. The project aims to provide a permanent exhibition venue with back-up for fast delivery," said Kumar. The business plan envisages that the warehouse project would become self-sustaining propositions within three years with a revenue model in place. The exhibition venues would have on display some of the established products that have year-round appeal like candle-stands and planters. These constitute 40 percent of the handicrafts exported annually by India. These products are based on consumption patterns for various products each year. For new products, the warehouses would act as a pivotal point for exporters participating in major trade marts like Atlanta and Dallas. With backup warehousing in place exporters' costs of participating in any of the 18-20 global trade shows and marts, where Indian companies normally display their products to prospective buyers, would be reduced.
Source: IANS