Euro zone crisis to hit UP handicraft sector

The emerging sovereign crisis in euro zone is likely to have a sizeable impact on handicraft exports from Uttar Pradesh.

European countries account for almost 35 per cent of the export destinations for India.

UP alone accounts for almost 40 per cent of total handicraft exports from India. If we include carpets, then UP with its carpet belt of Bhadohi and Varanasi, accounts for 60 per cent of the total exports.

“As per preliminary assessment, the impact on the handicraft exports from UP due to the euro zone crisis could be in the region of over 10 per cent,” UP Export Promotion Bureau joint commissioner Prabhat Kumar told Business Standard.

The handicraft sector had hardly recovered from global slowdown, especially in the US.

Export Promotion Council for Handicrafts (EPCH) vice chairperson Anoop Shankhdhar said the adverse impact on handicraft export could be almost 25 per cent.

“The exact impact on the sector could be known only by July-August, when the status of payment commitments from clients in European countries gets clear,” he added.

He informed exports from Saharanpur, Moradabad, Kanpur, Bhadohi, Noida and Aligarh in UP would be hardest hit as Europe was one of the prime destinations for these export hubs.

“When the US market was weak, Europe had supported the sector. However, now it is double whammy for exporters,” he noted.

By the latest collated figures, handicraft export from India came down from about Rs 14,000 crore in 2007-08 to Rs 8,180 crore in 2008-09 due to global recession.

However, National Handloom Development Corporation (NHDC) MD J K Baweja noted the exporters had learnt to deal with such situation in the aftermath of US sub prime crisis.

“The exporters are already exploring other markets in Asia, Arabian countries and Latin America to insulate them from regional economic crisis hitting a region,” he noted.

UP has a rich heritage in handicraft, including art metal ware, wood ware, hand printed textiles, zari, imitation jewellery and miscellaneous handicraft items.