Capital Concerns: Essential Growth Needs for India's Handmade Sector

The global creative manufacturing and handmade (CMH) sector has been experiencing significant growth. Valued at USD 700 billion in 2022, it is projected to reach USD 1 trillion by 2024. This growth is fueled by a mix of market forces, particularly driven by conscious consumerism. Consumers increasingly favor products and processes that are environmentally sustainable, socially inclusive, equitable, regional, and artisanal, aligning with Sustainable Development Goal (SDG) 12, which promotes responsible consumption and production.

India's handmade sector is also expanding rapidly. In FY 2021–22, its exports reached USD 4.35 billion, marking a 25.7 percent increase from the previous year. Besides foreign exchange, a significant portion of the sector's revenue comes from domestic sales. In FY 2020–21, the Indian government estimated the value of the handicraft and handloom sector at INR 25,706.3 crore (approximately USD 3 billion). This figure is considered conservative due to the sector's nature, which spans both the formal and informal economies, including online retail, organized craft fairs, tourist markets, and doorstep sales. Recently, retail giants have boosted demand by expanding their social and artisanal business partnerships.

The CMH sector is second only to agriculture in terms of workforce size, employing around 200 million artisans. If the sector is streamlined, formalized, and enhanced with relevant technologies, it can generate significant benefits. These include contributions to the national GDP, the creation of additional livelihoods, the development of India's entrepreneurial ecosystem, and the advancement of various SDGs, such as climate action through greener supply chains and gender equality by empowering more women. The sector's potential is immense, but its progress towards new opportunities or a significant leap forward hinges on one crucial factor: finance.