2. 2.

Objectives of the proposal 12

3. 3. About the venue of the Buyer Seller Meet 20

4. Target countries for reverse BSM 27

5. Need for Reverse BSM 39

6. Target Beneficiaries 45

8. Response received from the BSM 46

9. Recommendations 53

***************************
India has a vast production base for handicrafts (including carpets ),
handlooms, jute and jute products etc. The growth in these sectors has been
phenomenal in terms of employment and foreign exchange earnings. The
Handicrafts, handloom and jute sectors have contributed substantially to the
foreign exchange earnings. The growth of these sectors for the last five years
is significant. The Indian Cottage sector has seen rapid growth in the past and
is currently a Rs.60,000 crores plus industry.

In-spite of a vast production base in the above sectors, the opportunity for
international marketing of these products is not adequately available to the
Indian manufacturers / exporters.

Because of the higher marketing cost involved for introduction of any new
product in the foreign market, exporters are unable to undertake aggressive
marketing. Besides, the cost of participation in an international event abroad
is very high. It has also been observed that these events give opportunity
only to a handful of exporters who can spare substantial foreign exchange.

• • The total World trade in Handicrafts, Gifts & Decorative is

estimated at US$ 235 billions of which China accounts for 71 billion
whereas India at 3 billion.

• • Currently, marketing efforts of Indian exporters are driven by individual

relationships and an India-specific integrated approach is lacking, which can be
substantiated from the facts that individual exporters take part in international
events and fairs establishing contact with the importers and are increasingly
using the Internet for establishing new contacts.

• • The need for an India specific cottage sector initiative was felt that could
attract leading importers and stores to India.

• • Most of the developed nations and even developing countries like China
have set up national level, wholesale trade Marts to provide a fillip to the
cottage sector exports.
Epch.1

The world economy is no longer monopolized by the developed

countries. The Western world has now realised that without Africa,
Asia there can be no globalization. Since economic growth in
developing and transition economies remains higher than growth in
advanced countries, it is probable that within the next two decades the
global economic map will change more than it has done over the last
20 years. Business firms in Brazil, China, India and Poland continue to
gather momentum and they will gradually become major players in
international markets. This will mean a fundamental change in the
global corporate landscape.

An important aspect of the globalization process is the rapid change

regulations affecting the international marketing environment. The
world trading system is constantly spinning over new opportunities and
creating new threats. Certain tariffs and quotas are removed but new
technical norms, phytosanitary measures and anti-dumping actions are
rendering the export trade more difficult for companies in emerging
economies. While numerous subsidies are being eliminated and the
bureaucracy of customs procedures curtailed, new rules on intellectual
property rights, certification requirements or complex domestic
regulations require export managers to respond to new regulatory
challenges. The positive aspect of globalization is that the trend
boosts productivity and living standards is most countries. It is often
considered the force that enabled the world’s poorest nations in the
1950s to rise to their place today among the more advanced
economies.

It is in this backdrop that strategies for the export sector at macro

level have been formulated for the next 5 years which would be co-
terminus with the 10th Five Year Plan period. These strategies are in
the nature of board directions giving a road map for the export sector
in the Medium Term.

Policies and programmes specifying step-by-step sequence of action

necessary to achieve the major objectives will have to be formulated
based on this Strategy Document.

The Medium Term Export Strategy outlined by Government of India

also provides attempts to provide this direction by focussing not only
on products in which we have a revealed comparative advantage, but
also identifying products which have real comparative advantage
based on the potentialities. It is an attempts to provide a realistic mix
of macro policies with sector specific policies and provides attainable
goals with appropriate checkpoints.
Epch.2
The cottage sector including handicrafts, silk, jute and carpets has
over the years contributed significantly to the employment and foreign
exchequer of the country.

However, despite the large production base the market at international

level is still unexplored. The biggest constraint which the sector faces
is the marketing of their products, especially in this era of globalization
of information technology which has major influence.

The forces of globalization have created an environment of

international competition throughout the world, leaving few niches of
protection for the inefficient.

At the same time, the large-scale use of international marketing

techniques is revolutionizing the way the world does business. It is in
this environment that small and cottages sector have an increasingly
critical role to play.

The basic reason is lack of focussed and aggressive international

marketing network. The value of International Marketing Tools for
the small scale sector
in general and cottage sector in particular is becoming increasingly
manifest, not only from the functional point of view but also from the
perspective of many opportunities that focussed marketing offers its
users for participating in growing world trade.

In view of above background EPCH has envisaged a integrated

international marketing initiative to launch an Aggressive Focussed
Export Promotion Measures for quantum jump in the export earnings
from the handicrafts sector which is the largest provider of
employment in the country.

The proposal primarily aimed towards Aggressive Launching of Indian

Cottage products by way of organzing Theme Shows throughout the
year and motivate major overseas buyers, importers, departmental
stores, chain stores and prominent journalists, editors of specific trade
magazines to attend these shows.

A proposal under title “International Marketing Linkages for Handicrafts

and other allied Products through Reverse BSM & Publicity Campaign“
has been envisaged for providing a platform for round ‘O’ clock international
marketing of handicrafts, jute, silk, carpet and other synergy products and
submitted to the Ministry of Commerce & Industry, Govt. of India.
Epch.3
The Empowered Committee of Ministry of Commerce in its meeting held on 24th
January, 2005 has approved the proposal under Market Access (MAI) scheme for
100 buyers for each BSM in 1st year for following 4 Buyer Seller Meets:
1. 1. Indian Furnishing, Floorings & Textiles Expo (IFFTEX)
2. 2. Indian Fashion Jewellery & Accessories Show
3. 3. Stationery & Paper Products
4. 4. Deco Festive India,06

The basic objective of launching of this specific project is to target

Focused Buyers, Focused Countries & Focused Products. Today
Indian Handicrafts & Gifts is a general terminology which includes
thousands of product categories and overseas buyers are not able to
source the products as per their requirements and choice. The reason
behind is that the Indian Handicrafts & Gifts Fair being organized by
EPCH for 4 days is not able to cater participation of large number of
the products and similarly the overseas buyers are also not able to
source in a short period due to the multi complexity of the product
groups.

The need of today is to organize shows on product specific themes on

regular intervals and target the specific buyers from different
countries.

The broad objectives of the proposal is to provide institutional support

to cottage, small scale and SMEs engaged in exports in their marketing
efforts through long term planning and creation of support facilities.
The priority areas will be:

1. 1. Creation of new and improvement in the existing international

marketing techniques / export opportunities of the cottage sector
and SMEs exporting units.
2. 2. Efficient utilisation of present potential of exporting small scale
sector by creating a new concept of export marketing.
3. 3. Creating an atmosphere of awareness of the concept of round
“O” clock international marketing through permanent contact point
i.e. India Expo Mart which is the first State-of-Art infrastructure
facility created for the cottage sector in the international markets.
 Epch.4

4. 4. To create a link between Indian craft industries which have

limited international marketing facilities and the consumer market
of Europe & USA and other developed nations.
5. 5. Development of international network of marketing and product
development expertise with the help of international product
designers, trend-setters etc.
6. 6. To bring together buyers and sellers around the world through
out the year with focused publicity.

• • ADVANTAGES FROM INTERNATIONAL BUYERS POINT OF

VIEW

- - A permanent contact point for buyer seller interaction.

- - Reliable source of supply.
- - Preference to buy from the country of origin.
- - Ability to visit as per buyers' convenience.
- - Efficient utilization of limited time of the buyers.
- - Opportunity to source a large assortment of products and meet
a large number of sellers at a single location.

ADVANTAGES FROM EXPORTERS' POINT OF VIEW

- - Cost effective utilization of international marketing expenditure.

- - Opportunity for exporters located at remote places of these
states to met International buyers.
- - Opportunity to meet a large number of overseas buyers at a
single location throughout the year.

• • ADVANTAGES FROM GOVERNMENT'S POINT OF VIEW

- - To achieve higher exports of cottage sectors which includes

handicrafts, silk, jute, carpet and other synergy products.
- - To promote new products and languishing crafts.
- - To promote new exporters / entrepreneurs and small & cottage
exporters.
- - To promote new craftsmen.
- - To promote design development.
- - Increased share of export earnings from the sector which have
tremendous potential but due to lack of focussed export promotion
measures can not be substantially achieved.
- - To benefit the artisan, the actual manufacturer, from the
exports.
- - To increase employment opportunities.

Epch.5
- - To improve the level of livelihood of craftsmen.
- - To launch Indian cottage sector in the world market for the first
time in an integrated manner among the leading importers,
departmental stores, buyers etc.
- - No such effort have been made till date by any Governmental
agency for the international marketing of the cottage sector with a
definite business plan and an objective to increase the share of
Indian Exports through state-of-art infrastructural international
marketing hub.

• • OTHER OBJECTIVES

- - To establish specific integrated approach for cottage crafts which

is lacking and currently marketing efforts of exporters are driven by
individual relationship.

- - Urgent need for specific cottage sector initiative that would

attract leading importers to India which otherwise have China as a
major destination point since no such facility is available in India
where an overseas buyers can source their requirements round “O”
clock.

- - To bring buyers from round the world throughout the year and
create new marketing opportunities for cottage sector.

- - To create aggressive international marketing strategy.

- - To fill the gap of inadequate infrastructure specially in the

remote craft pockets.

- - To achieve a quantum jump in the export earnings with the

enhanced flow of trade.

VENUE FOR THE REVERSE BUYER SELLER MEETS – INDIA EXPO

MART & CENTRE

The international trade fairs in India being organized by EPCH etc.

provide a greater opportunity for a large number of foreign buyers to
visit and meet a large number of exporters at one place.

However, the future of international trade fairs in India has to undergo

a change. Buyers prefer to visit the country as per their own
convenience and they cannot coincide their visit every time with the
dates of trade fairs in India.

Epch.6

As such, there is a need for a permanent contact point throughout

the year where all potential importers or wholesalers can visit any time
during the year and look for supplies which dispenses their needs for
carrying high inventory. This kind of permanent contact point can create
a window for our products by ensuring:

a) Permanent contact point throughout the year

b) Reliable supply
c) Quick turn-over
d) d) Capacity to absorb new techniques and designs.

Based on the above issues and theme of upcoming centralized export

marketing centres as already been incorporated in Dallas (USA),
Utrecht, The Netherlands, Japan, Shanghai etc. the idea of setting up
India Expo Mart came into existence.

On the basis of the analysis of participation in various international

fairs, organising Indian Handicrafts & Gifts Fair and various and feed
back from the member exporters which are approximately 25,000 in
number, there was strong justification for setting of this ambitious
project.

The sector especially the target product categories i.e. handicrafts,

handloom, jute, silk and similar product groups which are basically
small and cottage level in general is not equipped with inherent
expertise for Export Marketing and Development to respond to the
changing trends.

• • It is this background that India Expo Mart (IEM) has been

conceived.

• • IEM is thus envisaged as a nodal point where foreign buyers can

meet cottage sector exporters round the year and where periodic
exhibitions fairs could be organised.
• • The India Exposition Mart has been conceptualised as a
permanent display point for exporters in the cottage sector.
• • This mart is a unique way of bringing together buyers and sellers
from around the world throughout the year and would fulfill the
following key objectives:

  New marketing opportunity for the cottage sector –

nodal point of contact thereby reducing the effort involved in
establishing contacts
Epch.7

  Benefit of smaller exporters who find it difficult to

participate in international fairs

  Promoting Indian cottage sector & artisans by

arranging special events

  India Exposition mart has been conceived along similar

lines are trade marts in cities such as Dallas, Brussels and
Shanghai. The mart would help eliminate a key infrastructure
bottleneck and will help improve the competitiveness of Indian
exports.

  It would more importantly help sustain the exports of

Indian Handicrafts, which have shown robust growth in the
recent past.

  The exclusive presence of cottage crafts & synergy

products at such a nodal point will be able to get a focussed
export marketing opportunities without any substantial efforts as
India Exposition Mart is supported to be future hub of sourcing
from the buyers all over the world.

TARGETED COUNTRIES FOR INVITING OVERSEAS BUYERS /

IMPORTERS / JOURNALISTS FOR REVERSE BUYER-SELLER
MEETS

The product groups accounting for a major share of exports are

carpets, embroidered goods, hand-printed textiles and artmetalware
which, in themselves, account for over three quarters of India’s export
turnover of handicrafts.
In the span of five years since 2000-2001 export of handicrafts grew
from the level of Rs.8490.16 crores to Rs.13032.70 crores in the year
2004 - 2005.

The principal export destinations for handicrafts (including carpets) are

U.S.A., Germany, France, U.K., Japan, Italy, Canada and The
Netherlands with over 31 per cent of export value in 2003-2004 being
accounted by the U.S.A. alone. The prominent EU countries listed
above together accounted for another 30 per cent of the export value.
As single country destinations, U.S.A., Germany and U.K., among
themselves, accounted for one half of exports by value.

Epch.8
The exporting countries are wider in numbers and prominently include
China, S. Korea, Taiwan, Philippines, Malaysia, Indonesia, India, Sri
Lanka, Pakistan, Iran, Turkey, Mexico, Bangladesh and Vietnam.

In view of above it can be analyzed that limited Indian Handicrafts

products caters to a particular segment of market and hence there is a
urgent need to identify, explore and develop new international
markets, beside providing a push in the existing markets by
broadening the product base.

The analysis of country-wise share of handicrafts exports reveals that

Indian handicrafts are excessively concentrated in 3 markets: U.S.A.,
U.K. and Germany; India’s export penetration of handicrafts in
France, Netherlands, Italy, Switzerland, Canada, Japan and
Hong Kong is very low. These countries are other sizable markets
and there is no reason why Indian handicrafts cannot penetrate these
countries when they do so in the others.

COUNTRYWISE SHARE OF EXPORT OF

HANDICRAFTS FOR THE YEAR 2004-2005

Epch.9
U.S.A.

Largest market as it is the U.S.A. is principal destination for gifts &

decorative produced in various developing countries of Asia. The U.S.
A. market is well integrated across the whole nation, with retailing
controlled by large-sized chains. Consumers in U.S.A. are very price
conscious or price sensitive; price ranks above quality in consumer
considerations. Hence, Unit Value Realization (UVR) in this markets
trends to be lower than in other countries.

Marketers consider it to be a valuable destination for low and medium

value items, Owing to its multiethnic composition with a large
presence of Asians, including Indians and other South Asians, the
U.S.A. market has scope for traditional decorative items, The U.S.A.
market keeps growing in population size unlike Japan and European
Countries and multiethnic immigration continues.

Epch.10
U.K.

Compared to the previous two (USA & Germany), U.K is relatively

smaller markets in total size. But UK features amongst top 5 end
markets for 8 items out of which Indian scores as a major supplier in
the case of 3 items in UK and France do not import from India
decorative in such quantities as they do from else where. In U.K there
is a good degree of import taking place from European Countries.

GERMANY

Once the thriving economy in Europe, the German market tended to

be very sophisticated but recession and costs of unification have
depressed consumer aspirations and spending. Thus this market has
turned to Asian providers for cheap goods. Such as handicrafts wares.
All said and done markets for such goods are tending to decline.

Quality is the key of German consumer consideration. There is

emphasis on articles that are natural and authentic. Wall decoration
are very popular amongst Germans so also statutes and figurines.
Epch.11
FRANCE

Epch.12
THE NETHERLANDS

ITALY

Epch.13

AUSTRALIA
JAPAN

Epch.14
NEED FOR ORGANIZATION OF REVERSE BUYER SELLER MEETS

The Indian handicrafts are sold in the international market due to its
unique artistry work and traditional work. But in present scenario the
new and newly develop items by our neighboring competitors
countries like, China, Taiwan, Philippines and Malaysia etc. are
gradually replacing the traditional Indian handicrafts. Due efforts
have been made in this direction and the liking of Indian cottage
products is continuously increasing in the world market and the sector
is witnessing a average growth of around 15% since last 10 years.

These competitor countries unlike India are also extremely active in

promoting their trade. Chinese, Korean, Philippines, Thailand,
Malaysia, and Taiwan participate in almost all the international fairs
and also big in numbers.

Whereas Indian participation in international fairs is very less and

always very small in number. Beside this, most of the South East
Asian Countries exporter have their counterparts in these importing
countries who have either showrooms or warehouse and are in
position to supply the goods on immediate delivery basis.

There are mainly two types of retail channels in operation, commercial

channels and alternative channels. Commercial channels comprise
different types of stores, with exclusive and non-exclusive features
such as department stores, specialty stores, independent retailers, etc.
whereas alternative channels comprise organisations with idealistic
attitude towards handmade goods from developing countries. They
deploy a commercial bridge to help craft organisations in developing
countries to sustain themselves financially by creating markets for
them in developed countries.

The proposal envisages organization of 4 Buyer Seller Meets in

1st year targeting 11 major countries and motivating
approximately more than 100 products specific overseas buyers /
journalist for each show.
Epch.15
Further, vigorous publicity campaign has been launched in all these
markets for backward linkages for creating an environment of
awareness in those targeted countries so these theme shows can be
projected as a
hub of sourcing among all the buyers in the years to come.

The publicity campaign mainly comprises Development and mailing of

corporate fliers to the major importers, procurement of database,
organization of seminar, workshops for foreign media, embassies,
consulates, advertisements at strategic locations, development of
websites, road shows in major markets, video films.

However, strong & urgent need has been felt to organize the buyer
seller meet through organization of product specific shows to support
the manufacturer and exporters of the cottage sector.
Four Reverse Buyer Seller buyer meets on the following product
groups have been organized from 19 – 22 January, 2006 at India Expo
Mart & Centre, Greater Noida in first year. Prominent Buyers /
Journalists have been invited from the targeted countries.

1. 1. Indian Furnishing, Floorings & Textiles Expo (IFFTEX)

2. 2. Indian Fashion Jewellery & Accessories Show
3. 3. Stationery & Paper Products
4. 4. Deco Festive India,06

• • The entire cottage sector of India including small and medium

manufacturers, artisans, craftspersons, exporters of handicraft,
handloom, jute, carpet, silk and other similar product groups
through increased export earnings which means more livelihood to
the rural based craftsmen who are in-fact the backbone of the
entire sector. The more export orders means better livelihood
opportunities to the craftspersons. No such focused effort have
been made to project Indian cottage sector in the world market in a
systematic manner by motivating major players in the world market
to visit India to source their requirements from the hub which is
open 365 days.
Epch.16
Four product specific shows have been organized from 19 – 22
January, 2006 at India Expo Mart & Centre and number of buyers /
importers / journalists have been invited from the targeted countries
viz. USA, UK, Germany, France, Italy, Japan, Canada, The
Netherlands. Following good responses have been received:

• • The leading importers of the world got the option of sourcing

variety of product range from a single nodal point which otherwise
was not feasible.
• • Enhanced export earnings due to international marketing
facility.
• • Increased foreign exchange earnings to the country which have
negligible share of exports in the world imports despite vast
production base.
• • Effective business development and efficient utilization of
marketing expenditure.
• • Increased flow of overseas buyers (Who prefer to shop at the
country of origin) who will have the time and effort of reaching the
handicraft production centres scattered all over the country.

PARTICIPATION IN REVERSE BUYER-SELLER MEETS (RBSMs)

More than 600 Number of manufacturers, exporters participated in the

RBSMs on following product categories:
1) Indian Furnishings, Floorings & Textiles
2) Indian Fashion Jewellery & Accessories
3) 3) Stationery and Paper Products
4) 4) Festival decorative products

AREA
An area of more than 10,000 sq. mtrs was covered by the exhibitors.

PRODUCT CATEGORIES

A wide range of product categories were exhibited by the exhibitors

which was displayed in a tasteful manner receiving an encouraging
response from the overseas buyers.
Epch.17
OVERSEAS BUYERS
More than 2000 overseas buyers from various countries like USA,
Germany, Colombia, Brazil, Span, Canada, Italy, Turkey, Argentina,
Poland, Uruguay, China, France, Australia, Venezuela, Portugal,
Netherlands, South Africa, UK and Russia visited the product specific
RBSMs.

BUYERS VISITED UNDER MAI ASSISTANCE

More than 600 buyers were identified and recommended to visit the
product specific RBSMs under MAI scheme and were provided air
tickets and hotel.

These buyers have been identified through the established consultants

from all over the world and screening has been made on the basis of
performance and obtaining details of the vendors with whom they are
working. These proformas were further scrutinized by a team
comprising trade and industry and on the basis of recommendation,
these buyers were provided air tickets as well as local hospitality. The
components of the air tickets has been from the MAI and hotel were
given by EPCH so as to make the event successful.

IMPORTANT BUYERS
Some of the top buyers who visited RBSMs are listed below :

1. 1. CARREFOUR/ COLOMBIA,

2. 2. OLIMPICA / COLOMBIA

3. 3. COMERTEX / COLOMBIA

4. 4. URBAN OUTFITTERS (200 STORES) / USA

5. 5. WISTERIA (MAIL ORDERS)/ USA

6. 6. ROOTS (160 STORES) / USA

7. 7. LOBLAW STORES (100 STORES) / USA

8. 8. ABC CARPETS / USA

Epch.18
 9. 9. OVERWAITIA GROUP /USA

10. 10. COSTCO / USA

11. 11. MUDO CONCEPT / TURKEY

12. 12. GUNTHER LAMBERT GMBH / MONCHENGLADBACH /

GERMANY

13. 13. GUNTHER LAMBERT GMBH / MONCHENGLADBACH

GERMANY

14. 14. INESS CONFECTION SA / TUNIS

15. 15. KANGAROO GMBH / BAD OLDESLOE / GERMANY

16. 16. KRIEGER HANDEL GMBH & CO. KG / SCHOENEFELD /

GERMANY

17. 17. KRIEGER HANDEL GMBH & CO. KG / SCHOENFELD

GERMANY

18. 18. LAMBERT FLAGSHIPSTORES GMBH / MUCHEN /

GERMANY

19. 19. LAMBERT FLAGSHIPSTORES GMBH / MUCHEN /

GERMANY

20. SCOTTOS OF STOW LIMITED / LONDON / UK

• • More than 600 prominent buyers / importers / journalist have
been invited for the shows.
• • Approximately Rs.428.00 crores business generated during the
shows.
• • Approximately 2200 foreign buyers visited the shows.

Epch.19
1. 1. To motivate and invite potential buyers from the focused, non-
focused countries, financial assistance for Reverse Buyer-Seller
Meet is essential.

2. 2. The assistance has increased the visit of buyers including top

importers from the traditional as well as non traditional markets.

3. 3. In this competitive world and when other countries are providing

assistance for visiting the potential as well as established buyers,
such incentives is important in order to increase the share in
exports.

4. 4. The visits of buyers, journalists to the shows enlighten them

with the culture, tradition, availability of skill in the country which
ultimately induces for import.

5. 5. The assistance provided towards air fare, hotel may also be

provided for the extra days i.e. before and after the event which
enable the visiting buyers to visit the units and understand about
the products and can add new to the ideas.

6. 6. The assistance should be provided for a single event to the

maximum 200 buyers for one show in order to attract large number
of buyers for larger business

7. 7. The assistance for inviting buyers may also be considered for the
professionals on various subjects on exports strategies, consumer
preferences for education of the exporters, entrepreneurs with the
view to produce the products as per the requirement of the
consumers.

8. 8. The assistance to invite persons from trade organizations,

importers, journalists may be provided for brand promotion of the
product.