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CDR file
                                 Review of Exports
                            During 2007-08 (April- March)
According to the provisional data available the exports of Handicrafts have shown a decrease of Rs.3276.09 crores,
from Rs. 17288.14 to Rs. 14012.05 crores, a decrease of 18.95% in rupees term. In dollar terms, the exports have shown
the decrease of US $ 330.12 millions i.e. the exports decreased by 8.66% over the similar period in 2006-2007. Details
are as under:-

        Itemwise Export Share of Handicrafts during April-February 2007-2008

                      Art Metalware 24%                                    Shawls as Artware 2%
                      Woodware 7%                                          Zari & Zari Goods 2%
                      Handprinted Textiles & Scarves 13%                   Immitation Jewellery 3%
                      Embroidered & Crochetted Goods 36%                   Misc. Handicrafts 13%

       Statement Showing Provisional Export Figure of Handicrafts during the Period April- March 2007-2008
                           compared to the Corresponding Period of April- March 2006-2007               US$ at the rate of*
                                        Rupees in Cr.        Increase/           US$ in Millions          Increase/
                                                              Decrease                                    Decrease
               Items                2006-07      2007-08         in %          2006-07       2007-08          in %
                                                                 over             (April - March)             over
                                       (April - March)        2006-07                                      2006-07
                                                                              *45.3607      *40.2513
 Artmetal Wares                      4135.06      3308.05      (-)20.00         911.60        821.85          (-)9.85
 Woodwares                           1180.02      1038.92      (-)11.96         260.14        258.11          (-)0.78
 Handprinted Textiles &
 Scaraves                            2465.18      1773.93      (-)28.04         543.46        440.71        (-)18.91
 Embroidered &
 Crochetted Goods                    5860.35      5145.16      (-)12.20        1291.94       1278.26          (-)1.06
 Shawls as Artwares                   216.82       213.56        (-)1.50         47.80         53.06       (+)11.00
 Zari & Zari Goods                    392.45       349.23      (-)11.01          86.52         86.76         (+)0.28
 Immitation Jewellery                 386.09       351.32        (-)9.01         85.12         87.28         (+)2.54
 Misc. Handicrafts                   2652.17      1831.88      (-)30.93         584.68        455.11        (-)22.16
 Total                              17288.14     14012.05      (-)18.95        3811.26       3481.14          (-)8.66
   During the period, the exports of Art Metalware, Woodware, Hand printed Textiles & Scarves, Embroidered &
Crocheted Goods, Shawls as artwares, zari & zari goods, Imitation jewellery & Misc. Handicrafts showed a decreasing
trend of 20%, 11.96%, 28.04%, 12.20%, 1.50%, 11.01%, 9.01% & 30.93% in rupees terms respectively. In US$ term Art
metalwares, Woodwares, Hand printed Textiles & Scarves, Emb. & Crocheted goods & Misc. Handicrafts showed a
decrease of 9.85%, 0.78%, 18.91%, 1.06% & 22.16%, respectively whereas export of Shawls as Artware, Zari & Zari Goods
& Imitation Jewellery increased by 11.0%, 0.28% & 2.54% respectively. Overall a decrease in the rupee term was 18.95%
and in the US$ term was 8.66% The reason for decrease in exports is due to the impact of rupee appreciation, rising
interest rate, low realization on export proceeds and cancellation of orders.
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 Inside this issue...                                                                Chairman’s
 The EU Market for Bed Linen &
 Furnishing Textiles ........................ 4
 Highlights of the
 Foreign Trade Policy (2004-09) ....... 11
                                                           Dear Fellow Exporters,
 Business Opportunities ................. 12

 News Briefs ..................................... 13

 Membership Renewal ................... 15

 Impex Column ............................... 16

 Notifications .............................. 18

 Events Overseas ............................... 22

 Forthcoming Events .......................... 27

     Vol. No. II, Issue No. 10 (May, 2008)
     RNI Regn. No.: DELENG/2006/17029

Editor: Rakesh Kumar, Executive Director, EPCH
    Printed & Published by Rakesh Kumar
                    on behalf of

 Export Promotion Council for Handicrafts
                 Published at
   EPCH House, Pocket 6 & 7, Sector C, LSC
      Vasant Kunj, New Delhi - 110 070
      Tel: 26135256; Fax: 26135518/19
   E-mail:; URL:

          Compilation & Presentation by
      Establishments Promotion Bureau,
    A-15, Aditi Aptts.,16A, IP Extn., Delhi - 92
    Tel:22771211, 22246094; Fax:22733605

                Print Run 6,500 Copies

  CRAFTCIL is an in-house journal of the Export
 Promotion Council for Handicrafts (EPCH). The
contents of CRAFTCIL are collated for the benefit
of its members and the views expressed may not
   necessarily be those of the Council or the
                                                           Thanking you.
   Publishing Agency. Material appearing in
  CRAFTCIL cannot be reproduced without the
      prior permission of EPCH in writing.
                                                        (Sudhir K Tyagi)
                                                        Chairman, EPCH

                             For feedback and suggestions write in to:
                                                                                           CRAFTCIL • May 2008   3
F    eature

The EU Market for
Bed Linen & Furnishing Textiles
EU’s total consumption of bed linen can be estimated at Euro 9.7 billion, against 8.7 billion
in 2002. The seven major EU countries covered 81% of the total EU market, with Germany
still leading despite a fall in consumption during the period 2004-2006. In major EU
countries, growth in volume was stronger than growth in value, caused by slightly decreased
consumer prices.

     The EU imported 386 thousand tonnes of bed linen       Consumption Trends
at a value of Euro 2.3 billion in 2006, against 275              The market for household and furnishing textiles
thousand tonnes valued Euro 1.9 billion in 2002. Total      can be divided into a (residential or) consumer
imports increased, while production for the EU market       segment and a (commercial or) contract segment. The
decreased, which indicates growth of the import share       commercial or contract market has a completely
in the slightly increasing consumer market. Total EU        different market structure from the consumer market.
imports of bed linen increased 25% (in terms of value)      Bought by a population of almost 492 million, it
during the period 2002-2006, of which 8% increased          indicates that per capita consumption of bed linen
during 2004-2006. Germany remained the leading              amounted to Euro 19.70 in 2006.
importer of bed linen accounting for 23% in terms of
                                                                In the major EU countries, it can be assumed that
value in 2006, despite a slight decrease (in volume and
                                                            quilt or duvet covers accounted for 50% of total
in value) in imports in the period 2005-2006. Germany
                                                            expenditure, quilts for 18%, fitted bottom sheets for
was followed by the UK, France, Belgium, Spain, Italy and
                                                            10%, top sheets 4% and pillowcases for 8%. It should be
The Netherlands.
                                                            noted that covers are mostly offered in combination
    A strongly increasing part of imported bed linen        with pillow cases.The use of duvets, including fitted
into the EU came from Developing Countries(DC): 53%         bottom sheet(s), pillowcase(s) and a duvet cover has
in 2002, 56% in 2004 and 59% in 2006. Leading suppliers     increasingly replaced the use of blankets combined
of bed linen were: Pakistan, Turkey, China and India.       with fitted bottom sheet(s), pillowcase(s) and top sheet.

4   CRAFTCIL • May 2008
Consumption of bed linen in the EU, 2002-2006 (Euro million)
                                      2002        2004             2006         Annual change              Per capita
                                                                                  in %, 2002-06         2006 (in Euro)
Germany                              1,809       1,845             1,814                 + 0.1%                    22
United Kingdom                       1,567       1,664             1,768                 + 3.2%                     29
Italy                                1,272       1,320             1,419                 + 2.9%                     24
France                               1,268       1,327             1,384                 + 2.3%                     23
Spain                                  772         843              948                  + 5.7%                     21
Belgium                                234         241              257                  + 2.5%                     24
Netherlands                            387         343              316                   - 4.6%                    20
Other EU countries (20)              1,409       1,578             1,766                 + 6.3%                     12
EU                                  8,718       9,161             9,706                  + 2.8%                     20
Sources: Euromonitor and Eurostat (2007)

                                                                           Changes in the EU Consumer Market
Factors affecting Consumer Demand
                                                                           Globalisation: The supply chain has
Economic Climate: Spending on bed linen is influenced to a great           become global now. Magazines are
extent by the general economic climate. Many purchases are not             becoming more international in their
essential and, at a time when the economy is weak, expenditures can        coverage and trade fairs such as Heimtex
be deferred until conditions improve.
                                                                           are organised in different parts of the world
Demographics: During the last 5 years, the EU population has grown         (Germany, India, Japan, Russia, USA).
from over 482 million (mid-2001) to 492 million (mid-2006). In 2006,       Designers like Donna Karan, Giorgo Armani,
Germany had the largest population within the EU with 17% of the           Ralph Lauren operate worldwide, while
total, followed by France, the United Kingdom and Italy with roughly       interior department store Ikea from Sweden,
12% each. These four countries together comprise 54% of the total          is an universally recognised brand.
EU population.
                                                                           Changes in the Distribution System: Trade
Number and Size of Households: The number of households in the             structure is changing in all EU countries.
EU, is expected to grow further in the coming years to 205 million in      Independent retailers lose market share to
2010 from current 200 million. Low birth rates, a declining propensity     specialists chains, including interior
to get married and an increased number of divorces are affecting           department stores; clothing chains like
the size of households. There is an above average number of one-           Esprit, Benetton, Next, H&M introduced bed
person households for the EU in countries like Germany,                    linen in their product range, but also
Scandinavian countries and The Netherlands. More than two-person           furniture chains, DIY chains, hyper and
households account for the largest share in Italy and Spain.
                                                                           supermarkets added bed linen (sometimes
Housing Stock: In West European countries there will be a gradual          on an irregular base) to their product range.
slowdown in construction while in Eastern Europe the outlook is            Concentration on retail as well as on
distinctly brighter. Besides when new housing starts, house moving         wholesale level led to more competition,
level affect sales of bed linen.                                           driving prices down.
Climate: Sales of warm bedding tend to be lower in warmer climates.        As a result, retail chains, buying and selling
Social Trends: An increasing percentage of working women results           organisations, wholesalers and
in their own incomes, in this way sales of household textiles (such as     manufacturers are sourcing abroad, to keep
bed linen) tend to be higher.                                              down costs and maintain margins.

                                                                                           CRAFTCIL • May 2008        5
                                 The growing influence of        Other criteria include:
  Italy is still the             fashion: The bed linen          • Non-residential building capacity and new buildings in
  leader in                      markets in the major EU           the health and hospitality sector.
  manufacturing bed              countries varied strongly       • Number of patient beds in the health sector.
  linen in the EU.               from traditional to             • Number of rooms and bed places in tourist
                                 modern. Prints are most           accommodations.
  Other EU countries             popular for quilt covers,       Production
  with a significant bed         while single (uni) colours -
                                                                      The manufacture of bed linen has been moved to a
  linen industry are             light or dark- are popular
                                                                 large degree out of the EU to low-wage countries, partly
                                 for bed sheets. The
  France, Portugal and                                           through the growth of traditional imports and partly
                                 demand for pillowcases
  Germany.                                                       through the initiatives of EU manufacturers in
                                 mainly depends on the
                                                                 transferring the location of their production, in order to
  Manufacturers in the           buying pattern, usually
  EU focus on high               single colour, which
  value products with a          matches sheets but also
                                                                 The trend in
                                 printed, matching duvet
  high design content.                                           the market
                                 covers.                         towards
Factors affecting demand in the                                  greater
EU Contract Market                                               individualisation
     The commercial or contract market has a completely          of products led
different market structure from the consumer market. It          to some
can be divided into governmental organisations like              output being maintained in the EU. Italy is still the leader
defence, health and hospitals etc. and commercial                in manufacturing bed linen in the EU. The 'made in Italy'
organisations, like hotels. Several of these criteria are also   trademark has become more of a 'design in Italy' concept
valid for the contract market. For example, changes in the       with production migrating to Eastern Europe or North
demographic structures have a direct impact on                   Africa, to take advantage of the lower labour costs. Other
consumption and leisure behaviour, resulting in higher           EU countries with a significant bed linen industry are
demand for household textiles.                                   France, Portugal and Germany.

Some selected drivers of demand for bed linen in the EU, 2002-2006, in 1,000 persons/beds
                                 Population                    In-patient beds          Bed places in tourist
                           Mid-2002        Mid-2006           2002           2006         2002          2006
Germany                      82,488           82,375            732            694        1,671         1,690
United Kingdom                     59,328            60,550            237             231           1,188          1,102
France                             59,778            61,229            467             441           1,207          1,233
Italy                              57,157            58,820            254             228           1,930          2,056
Spain                              41,314            44,121            146             142           1,395          1,597
Netherlands                        16,149            16,346              81             79            177             196
Belgium                            10,333            10,541              56             55            161             169
Other countries (20)             157,295             157,87            984             929           3,176          3,550
EU                              483,842           491,852            2,957          2,799         10,905          11,593
Sources: Euromonitor (2007)

 6      CRAFTCIL • May 2008
    Manufacturers in the EU focus on high value                      Importers operate mainly nation-wide and demand
products with a high design content; they export on a           exclusive distribution rights for the whole country.
global scale by supplying to the higher segments of the         Importers/wholesalers in the classical sense are faced with
market and source basic products in lower-cost                  fierce competition within the distribution system and the
countries. Other strategies include investment in new           strong position of textile brands. The importers can often
manufacturing and information technology in order to            only position themselves by a low price strategy e.g. by
keep costs down; the setting up of retail activities, like      sourcing in DCs. Foreign manufacturers will often set up
Zucchi by Bassetti, Descamps stores and Inditex by Zara         their own sales organisations or work through an
Home; use of licensed brand names (Zucchi includes Pierre       exclusive importer for the market. The latter company may
Cardin, Yves St Laurent, Christian Dior and many others); new   in turn sell through a network of regional wholesalers or
product development, like easy-to-care products, anti-          agents in major countries like Germany, the UK, France,
microbial fabrics (increased demanded by sufferers from         Italy and Spain. Big retail chains buy directly from domestic
asthma and allergies) and environmental-friendly textiles.      producers, but usually import for their own account.
Opportunities and Threats                                       Textile Service Companies
     To satisfy the requirements of importing companies in          Textile service companies operate on the commercial
the EU, exporters in DCs will be facing increased demands       market with products such as workwear, household
for higher quality and requirements concerning the              textiles (including bed linen), industrial wipers and mats.
environment and labour conditions. Buyers' instructions         Important customers of these service companies can be
on sizes, colours and other specifications should be            found in the health sector (hospitals) and in the
followed precisely by the exporter.                             hospitality sector (hotels).
    Besides the traditional lower range market segment,             Agents: The sales agent with a role of just presenting
the largest middle-range market segment may also offer          samples to potential customers does not take title to
good opportunities for exporters in DCs.                        merchandise. The purchasing agent is widely used by
     Advantages of the new EU states in terms of lower          retail organisations and importing wholesalers, due to
wages and shorter routes will largely disappear, due to the     their wide net of contacts and knowledge of the foreign
alignment of the wage structure and the fact that the           markets. They do not carry their own stock but purchase
textiles industry will no longer be competitive there. This     solely on the request of their customers to get the
has already happened in the regions of the 'old' EU states.     commission.

     Markets for bed linen in most of the EU countries are           Retail Trade: Bed linen is retailed across the EU
referred to as buyer's markets. Importers of bed linen are      through a variety of retail formats depending upon
faced with excess supply, especially from Asian countries.      country and region. Each of these formats will have a
Competition is therefore primarily to be found among            different merchandise assortment and will, of course, be
other producers of bed linen exporting to the EU.               selling at different prices.
                                                                Department Stores: sales are mostly brands and at the
Trade Channels for Market Entry
                                                                upper price level. Only a small part forms private labels.
Importers/Wholesalers                                           Examples: Debenham (UK), Galerie Lafayette (France), etc.
     Wholesalers, with an estimated 50 % purchases play         Variety Stores: with middle to
an important role in distribution. They are generally used      low pricing, they
by manufacturers of cheaper mass market and                     mostly sell their
standardised products. Manufacturers of classic and             own label, but may
exclusive higher-priced textiles sell mainly directly to        have some branded
retailers or through own outlets (owned or franchised). In      merchandise.
the major EU countries, wholesalers are specialised either      Examples: Marks and
in household textiles or furnishing textiles.                   Spencer or BhS in the UK, etc.

                                                                                                 CRAFTCIL • May 2008      7
Interior Department Stores: bed linen forms part of the         in Germany and The Netherlands) or selling
assortment of these retail organisations, besides home          organisations.
furniture, furnishings and all kinds of accessories.            Home Shopping Companies: including mail-order
Examples: Ikea and Habitat and in the lower segments, Leen      catalogues and computer based mail-order (Internet), are
Bakker, etc.                                                    liable to offer a relatively broad assortment of both own
Specialist Household Textile Chains: it is in this group that   label and brands. The internet, computer-based mail
the widest selection of brands will be found, outside the       order, is a relatively new phenomenon, so the format is
biggest up-market department stores.                            still settling down. The biggest success is formed by
Examples: Descamps, Geneviève Lethu.                            original mail-order companies based on their knowledge
Specialist Furniture and Furnishing Textiles: it includes bed   and experience in this specific logistical process and
furniture in the assortment or bed and bedding chains.          methods of collection.
Examples: Ka International, Roche Bobois, etc.                  Examples: Quelle and Otto in Germany, Grattan and Freemans
                                                                in the UK, Wehkamp in The Netherlands and, La Redoute and 3
Independent Retailers: with less than 20 stores, buying
                                                                Suisses in France.
takes place directly from manufacturers, wholesalers,
agents and often they are members of buying (especially         Value Retailers and Discounters: today these are strong in
                                                                bed linen, because of the desire stemming from a part of
                                                                the consumer world which is not influenced by either
 Selecting a Suitable Trading Partner
                                                                fashion or brand awareness, to buy either anonymous or
       The best place to meet potential trading partners        cheap own label. To them, price is the main criterion.
 is at a household (and furnishing) textiles trade fair. At     Examples: ( Peacock, Matalan and TK Max in the UK, Zeeman
 trade shows you have an opportunity to talk to                 in The Netherlands, etc.
 potential partners on a face-to-face basis and assess
                                                                Super and Hypermarkets: became a player in the bed linen
 whether or not you would like to work with them.
                                                                sector and operate mostly through own labels or
     You could also identify potential partners from the        unbranded items.
 exhibition website beforehand or from a catalogue.             Examples: Asda and Tesco in the UK, Lidl and Aldi (Germany),
 When selecting them (e.g. importer/wholesaler) try to          Carrefour and Casino (France).
 find out:
                                                                Other Channels: include street markets and wholesale
 • What kind of bed linen they sell.                            Cash & Carry formula. Examples: Makro/Metro (Germany).
 • To which target groups they sell.
                                                                Price Structure
 • In which areas they are well represented in their
                                                                     The effect of the market position, often indicated as
   country. If they are exporting, to which other EU
                                                                low, medium and high, results in different margins on
   countries they sell.
                                                                consumer end price, based on one CIF (Cost, Insurance
 • To whom they sell e.g. small or large retailers,             and Freight) price for
   department stores, buying groups, etc.                       different market
     Although you may initiate a communication by               segments. A multiplier
 post or e-mail, it is recommended that you have some           of between 2 and 4 on
 personal communication before a trading partner is             the manufacturer's
 selected. In this regard, you could also contact Business      price should be used to
 Support Organisations (BSOs) in EU countries or the            calculate an
 commercial department of your own embassy, to see if           appropriate final
 they have any useful contacts. They might even have            consumer price.
 some knowledge of the contacts you may have made               Elimination of the
 independently.                                                 wholesaler, for instance

 8    CRAFTCIL • May 2008
in the case of clothing multiples, department and variety        knitted bed linen 6%. These percentages remained rather
stores and home-shopping companies, does not always              stable during the period under review and even in some
lead to a lower multiplier.                                      years before.
Trade Imports and Exports                                        Exports
Imports                                                              The EU member states exported 160,170 tonnes of
     The EU imported 386 thousand tonnes of bed linen            bed linen valued at Euro 1,399 million in 2006 (161,380
at a value of Euro 2.3 billion in 2006, against 275 thousand     tonnes, valued at Euro 1,376 million in 2004), resulting in an
tonnes valued Euro 1.9 billion in 2002. The average import       average export price of Euro 8.74 per kg (Euro 8.53 in
price decreased from Euro 6.83 per kg. in 2002 to Euro           2004). This export price indicates a high added value and
6.07 in 2006, caused by factors like intensified price           that bed linen is intended for the higher priced segments.
competition among suppliers and a cheaper US dollar.                 The leading EU exporter remained Portugal (20% of
Total imports increased, while production for the EU             total EU exported value) despite a fall of 11% during the
market decreased, which indicates growth of the import           period 2004-2006. Portuguese exports amounted to Euro
share in the slightly increasing consumer market.                367 million in 2002, Euro 309 in 2004 and Euro 275 million
     Total EU imports of bed linen increased 24.6% (in terms     in 2006. Another important exporting country was Italy
of value) during the period 2002-2006, of which 8.4% during      (12% of total EU exports), followed by Belgium (9%),
2004-2006. Intra-EU trade grew from 36% in 2002 to 39%           Germany (9%), France (8%), Poland (7%), Romania (5%),
in 2006 (mainly imports from Portugal, Germany, Belgium,         the UK (5%) and Spain (4%). About 27% of the exported
France and Romania). A strongly increasing part came from        value went to countries outside the EU in 2006. Leading
DCs: 53% in 2002, 56% in 2004 and 59% in 2006. Leading           destinations were USA (13% of total exported value),
suppliers of bed linen were Pakistan, Turkey, China and India.   Switzerland (5%), Norway (1%), Russia, Canada, UA
   In terms of weight, an estimated 65% of imported              Emirates, Saudi Arabia, Croatia and Japan.
bed linen was cotton-made in 2006. Almost 34% of total               Exports by EU countries include the so-called re-
imports of bed linen concerned woven/printed cotton              exports: imported products, which are exported to other
bed linen; woven/not-printed cotton bed linen 25% and            (mainly other EU) countries. The volume of re-exports is

EU imports of major bed linen products from DCs in 2006, in Euro million
                 Woven/                      Woven/                Woven/printed                        Woven/not printed
          printed cotton          non-printed cotton              man-made fibres                         man-made fibres
Total                829    Total                620      Total               293                 Total               205
from DCs             420    from DCs             379      from DCs            209                 from DCs            150
of which from               of which from                 of which from                           of which from
Pakistan             142    Turkey                84      Pakistan             70                 Pakistan             52
Turkey               133    Pakistan              78      China                52                 China                30
India                 58    China                 52      India                28                 India                18
Bangladesh            41    India                 39      Bangladesh           26                 Turkey               18
China                 18    Egypt                 32      Turkey               23                 Bangladesh           16
Moldova                8    Bangladesh            30      Morocco               3                 Egypt                 5
Egypt                  5    Moldova               15      Myanmar               2                 Macedonia             4
Brazil                 4    Tunisia               14      Indonesia             2                 Tunisia               2
Turkmenistan           3    Indonesia             13      Tunisia               2                 Albania               1
Tunisia                2    Turkmenistan           7      Other DCs             1                 Other DCs             4
Morocco                1    Vietnam                4
Other DCs              5    Other DCs             11
Source: Eurostat (2007)

                                                                                               CRAFTCIL • May 2008          9
important for countries like Germany, Belgium,           To satisfy the requirements of
Denmark and The Netherlands, while re-exports in    importing European companies,
the other major EU countries are more limited,      exporters in DCs will be faced with
but growing.                                        increased demands for higher
Opportunities and Threats                           quality and environmentally
    An increasing share of bed linen imports into   friendly products. Provided an
the EU came from DCs: 53% in 2002, 56% in 2004      exporter has the right strategy and
and 59% in 2006. Imports from DCs will grow         a carefully thought out development plan, there is no reason
faster than total imports in the coming years,      why these challenges cannot be met.
mainly to the detriment of other (EU and non-EU)    Price Developments
countries. Import prices will be under pressure         Average import prices of bed linen decreased from Euro 6.35
and the very slight increase in average import      in 2004 to Euro 6.03 in 2005, followed by an increase to Euro 6.07
prices will put further pressure on EU producers.   in 2006. Import prices of woven cotton bed linen were around
                                                    8% higher than woven synthetic items and more than 20%
                                                    higher than knitted items.
                                                        The average price developments are different in each
                                                    importing major EU country. Average prices decreased
                                                    particularly in Spain, the UK, Belgium and The Netherlands, which
                                                    can be partly attributed to imports of bed linen by value
                                                    retailers, discounters and hypermarkets. However, there are still
                                                    wide differences between average prices paid in each country.
                                                    For example, import prices in France were almost 39% higher
 Useful Sources                                     than in Italy in 2006, partly caused by sub-contracting, mainly on
 Trade Associations                                 CMT (Cut, Make and Trim) base, by Italian manufacturers.
 Euratex -                              Please note that these trends should be interpreted with
 Eurostat -                 care, as changes in imports do not reflect the demand in these
 Wholesalers                                        countries. Imports can change abruptly because of re-exports to
                                                    neighbouring countries, building up stock by distribution
                                                    centres for the following year, the establishment or departure of
                                                    manufacturers or large retailers in a particular segment of the
                                                    bed linen market.
 Leading Trade Fair
                                                    Market Access Requirements
                                                         As a manufacturer in a developing country preparing to
 Trade Magazines                                    access an EU country, you should be aware of the market access
 Textil Wirtschaft -               requirements of your trading partners and the national
 Textiles Outlook International -                   government in question. Requirements are demanded through                       legislation and through labels, codes and management systems.
 Journal du Textile -                               These requirements are based on environmental, consumer             health and safety and social concerns. One needs to comply with
 European Textile Services Association              EU legislation and have to be aware of the additional non-                                legislative requirements that trading partners in the EU might
                                                    request. Further more, cultural awareness is a critical skill in
 Information on tariffs and quota
                                                    securing success as an exporter.                                                                       Source: CBI, Netherlands

10   CRAFTCIL • May 2008
F        ocus

                     Highlights of the Foreign Trade Polic y (2004-09)
                     Highlights         oreign
                                       For              olicy
                    as per Annual Supplement released on 11.04.2008
                              referenc to Exports Handicraf    afts
                         with reference t o Expor ts of Handicraf ts

    The Annual Supplement to the Foreign Trade Policy, 2004-09 was released by the Hon'ble Minister of Commerce
& Industry, Mr. Kamal Nath on 11.04.2008. The Foreign Trade Policy contains nothing special for the handicrafts
sector but it has made continuation of the existing provisions and some steps towards further liberalisation of the
existing provisions which will benefit exporters including exporters of handicrafts. The highlights in this respect are
given below:-

1. Duty Entitlement Passbook Scheme (Depb)
    To impart continuity and stability to our foreign trade regime, DEPB Scheme is being extended till May 2009.

2. Refund of Service Tax
    The Government has already announced refund of service tax on almost all the services, which are directly
    relatable to export production and supply. Some services related to export, which do not attract service tax
    have also been clarified through a Circular. A few remaining issues regarding refund of service tax will also be
    resolved shortly.

3. Relief to Sectors Affected by Rupee Appreciation
    a.    Interest subvention provided last year to sectors affected by rupee appreciation and to SMEs, has been
          extended by one more year. This is applicable to the handicrafts sector as well.
    b. Reduced average export obligation under EPCG, for sectors, which have witnessed decline in exports in the
       previous year.

4. Export Promotion Capital Goods Scheme (EPCG)
    a.    The customs duty payable under EPCG Scheme has been reduced from 5% to 3%.
    b. To improve export competitiveness of Indian exports, all exports made towards fulfillment of export obligation
       under EPCG scheme will now be eligible for incentives/rewards under promotional schemes.

5. Focus Market & Product Schemes
    a.    Coverage of FMS has been increased and additional 10 countries have been included. These are Mongolia,
          Bosnia-Herzegovina, Albania, Macedonia, Croatia, Honduras, Djibouti, Sudan, Ghana and Colombia.

6. Substantative Measures taken to facilitate Exports
    a.    Withdrawal of the requirement of submission of non-availment of MODVAT certificate in case of quantity
          based advance licence issued prior to 1.4.2002. This step is likely to lead to closure of approximately 7000 old
          advance licences.
    b.    A few additional ports have been included under Export Promotion Schemes. This will help in reducing costs
          and adhering to delivery schedules. Some more ports are also under consideration.

                                                                                              CRAFTCIL • May 2008        11
7. Measures to Reduce Transaction Cost to
                                                                    BUSINESS OPPORTUNITIES
                                                                              Rouvoclass Trading

     a.     Advance Authorisation Scheme and EPCG

                                                                              Contact: Dinos Andreou
            Scheme will be EDI enabled through the                            P.O. Box 42691, Larnaca, Cyprus
            electronic message exchange with effect from                      Telephone: (357) 24-62 12 12;
            1.7.2008. This will do away with the present                      Telefax: (357) 24-62 21 16
            requirement of physical verification and
                                                                              ARTIBOLAS DE DALIA COSTA

                                                                                                                       Unique Beads &
            registration at Customs end.

                                                                                                                        Craft Supplies
                                                                              Contact Person: Dalia Costa
     b.     W.e.f. 01.01.2009, all existing EDI ports will be                 Rua A. Pereira Afonso, 22-3 Dto.,
            treated as a single port and there will be no                     P-2490-522 Ourem, Portugal
            requirement of TRA under Advance                                  Telephone: (351) 964-20 01 35;
                                                                              Email Address:
            Authorisation Scheme.
     c.     Payment of duty under EPCG scheme through
            debit of duty credit scrips under the promotional                 HAPPYLIFE
                                                                              Contact Person: Torvald Farebo

            schemes or DEPB w.e.f. 1.1.2009.
                                                                              Styrbordsgatan, 6,
     d. Application fee for duty credit scrips and for                        S-652 27 Karlstad, Sweden
        EPCG Authorisations reduced from Rupees 5 per                         Telephone: (46) 73-908 23 57
        thousand to Rupees 2 per thousand. The
                                                                              D.P. STOCK
        application fee for Importer-Exporter Code
                                                                              Contact Person: David Padgett

        Number has been reduced from Rupees 1000 to                           24, Rue Des Roses,
        Rupees 250.                                                           F-67880 Innenheim,
     e.     Reduction of fee in case of supplementary claims                  Telephone: (33) 3-88 95 70 76
            from 10% to 2%.                                                   Telefax: (33) 3-88 95 79 43

8. Procedural Simplification                                                  SEA-PACX INTERNATIONAL
                                                                              Contact Person: John Vaifoou


     a.     EOUs shall be allowed to pay excise duty on                       10 Blaine Street
            monthly basis, instead of the present system of                   #4, Seattle, Wa 98109, USA
            paying duty on consignment basis, subject to                      Telephone: (1) 206-355-1889
            conditions/ documentation to be notified by                       Telefax: (1) 206-349-6489
            Deptt. of Revenue.
                                                                                                                  Giftware & Bath
                                                                              KATCH IMPORTS

     b. Prorata enhancement/reduction in CIF value or                         Contact Person: David Katch

        duty saved amount beyond 10% has been                                 2333 Mira Vista Avenue,
                                                                              #10, Montrose, CA 91020, USA
        allowed under EPCG scheme, by Regional
                                                                              Telephone: (1) 310-492-6650
        Authorities under DGFT.
                                                                              Telefax: (1) 310-492-6650
     c.     Central Excise to issue installation certificate
                                                                              STUDIO 9 LTD.
                                                                NEW ZEALAND

                                                                                                                       Linens, Quilts &

            under EPCG Scheme within 30 days of intimation
                                                                              Contact Person: Naveen Jain
            by the exporter.
                                                                              2/177, Great South Road,

     d. Split-up facility under DFIA Scheme introduced.                       Greenlane, Auckland,
                                                                              New Zealand
     e.     The limit of duty free import of samples has been
                                                                              Telephone: (64) 9-529 5559
            increased from Rs.75, 000 to Rs.1, 00,000.                        Telefax: (64) 9-529 5559

12        CRAFTCIL • May 2008
N     ews
Furniture retailing in US hit                              UNIDO launches a special cane and bamboo project
by Sub-Prime Crisis                                        for the North East
     With the US economy heading for recession             United Nations Industrial
amid the sub-prime crisis, retailers shopping the          Development Organisation
furniture market there are facing the toughest             (UNIDO) project titled Promoting
business they have seen in years and, as a result, are     Livelihood in North Eastern India:
counting on landing bargains like never before to          The Cane & Bamboo Networking
help fill their floors and stimulate traffic. They want    Project was launched by Mr. Mani
quality, quick delivery, special designs and special       Shankar Aiyar, Minister for
pricing. They don't want to carry a lot of stock and       DoNER and Chairman, NEC in
some may trim their supplier ranks to help them on         presence of Dr. Kandeh Yumkella, Director General, UNIDO at a
that front. Some retailers say price increases from        function at the UN House, New Delhi. Representatives of the
Asian sources may further open the door to                 Department of Industrial Policy and Promotion, Ministry of
domestic producers, especially those who can come          Commerce & Industry, and the office of the Development
close on price and beat importers on delivery. And         Commissioner, Handicrafts, Ministry of Textiles, Government of
the overseas sources that are offering mixed               India, were also present on the occasion.
containers also will have an advantage with retailers
                                                           In the keynote address, Dr. Yumkella said that the Cane &
desperate to keep their inventory levels down and
                                                           Bamboo Project would be an excellent opportunity to further
their margins up. There are all the tell-tale signs that
                                                           strengthen the long-term partnership between UNIDO and
the US is turning into a buyer's market. The retailer
                                                           the Department of Industrial Policy & Promotion, the Office of
will try to cut back on the number of containers it
                                                           the Development Commissioner, Handicrafts, Ministry of
flows and will look closely at Asian and other sources
                                                           Textiles and the North Eastern Council. The Project could help
with mixed container programs. With high home
                                                           to overcome the sufferings of North Eastern India by
foreclosure and repossession rates in several US
                                                           providing jobs especially to unskilled young people.
states, the sales are down.
                                                           Earlier, Mr. Kamesh Salam, Director, Cane & Bamboo
    As against this, the suppliers may be forced to
                                                           Technology Centre (CBTC) made a presentation on Phase I of
seek price hikes, because they can only absorb so
                                                           the Project. NEC has appointed CBTC as the implementation
many increases in their own costs. Almost every
                                                           wing of North Eastern Regional Bamboo Mission with focus
Chinese company is giving price increases, and times
                                                           on employment generation, economic competitiveness and
are tough. This could help domestic producers regain
                                                           sound ecology.
market share.
                                                           Mr. R K Falguni, Secretary NEC dealing with Phase II of the
     Even so, the shopping list is fairly long and
                                                           Project stated that it aimed at poverty alleviation and
includes contemporary styles, which are gaining
                                                           environmental sustainability by initiating programmes that
traction in the market with the focus on youth and
                                                           contributed to economic empowerment, particularly among
home entertainment. Retailers still have decent
                                                           the most disadvantaged areas of the country. It also laid
traffic, but to get people to pull the plug - it's hard
                                                           stress on training for weaker section, especially women, to
with everyday layoffs, restructuring. Some retailers
                                                           empower them with technical and entrepreneurial skills and
are resorting to deep discounting, liquidation sales.
                                                           increase their access to services and markets. He announced
No wonder some retailers are looking for closeouts
                                                           that the Project would be implemented over a period of four
and discounted goods - hot prices that can help its
                                                           years with an estimated project cost of USD 2.31 million which
team close customers. For example, some retailers
                                                           will be contributed by DIPP, NEC, DC(H) and UNIDO.
focus on upholstery category, because consumers
tend to replace it more often than case goods.             India is the second richest country after China in terms of
Retailers are looking for value and quick delivery         bamboo genetic diversity, with nearly 28% production from
such as merchandise to arrive in 30 days or less and       North Eastern States. Hence, this Project will play a crucial role
the imports make that harder.                              in changing the social-economic scenario of the region.

                                                                                              CRAFTCIL • May 2008        13
                                Fashion Jewellery Trends - Eternally Changing

                                Fashion jewellery trends
 Wood ornaments               have undergone radical
 have become                  changes in the recent
                              years. Earlier, variants of
 desirable and                the conventional
 fashionable. Shell           jewellery to suit the times
 fashion jewellery            were popular among
                              people. Now, jewellery
 trends have been in          that adorns other parts
 vogue for years and          of the body from the
                              parts on which
 they still continue
                              conventionally Jewellery
 with flashy                  was worn has become the
 ensembles.                   new rage. Jewellery
                              makers have become
 Gemstones have                                                 Jewellery has always been the reflection of one's
                              innovative in showcasing
 risen in their fame                                        fashion sense and attitude like that of outfits. Trends
                              their creativity in fashion
                                                            keep changing every week, as more and more people
 and are emphasising jewellery trends that                  enrich themselves with fashion updates and practices.
                              reflects the changing
 their presence in            times. Jewellers who used         Fashion jewellery trends were limited to the wealthy,
 many fashion                 to cater to the changing      fashion trends have now become accessible and
                              trends in making              affordable to the masses. Fashion jewellery is inclusive
 jewellery sets.
                              necklaces, bracelets, etc.    of all types of conventional jewellery like earrings,
                              are now figuring out new      necklaces, bracelets, etc., and outrageous jewellery like
patterns for making attractive navel rings and belly        body piercing jewellery.
button rings. Jewellery that compliments the                    Rich, bold and unique designs are considered
ensembles perfectly is immensely famous among               trendy. Necklaces, bracelets, earrings, etc., in different
people, today.                                              shapes and sizes, hitherto not in vogue have become
                                                            piece de résistance of the general public. Wood
                                                            ornaments have become desirable and fashionable.
                                                            Shell fashion jewellery trends have been in vogue for
                                                            years and they still continue with flashy ensembles.
                                                            Gemstones have risen in their fame and are
                                                            emphasising their presence in many fashion jewellery
                                                            sets. Pearl, diamond and platinum jewellery are never
                                                            outdated, for they are timeless. The precious and semi
                                                            precious stones set in gold, platinum or cheap metals
                                                            render the jewels with a unique sheen that is
                                                                Antique jewellery has resurrected and speaks
                                                            volumes on the ethnicity, style and attitude of the one
                                                            who dons it.

14   CRAFTCIL • May 2008
M          embership

                                                        Annual Membership Renewal - 2008-2009
       The Council notifies its members that the Annual Membership with the Council for the year 2007-08 expires on 31-3-2008.
The Annual Membership Subscription for the year 2008-09 becomes payable on 1-4-2008. Hence you are requested to renew your
Membership for the year 2008-09 by remitting the amount of Rs. 2,500/- (Rupees Two thousand five hundred only) by a Cheque /
Demand Draft / Banker’s Cheque in favour of “Export Promotion Council for Handicrafts” payable at New Delhi. Also, forward your
Export Performance for the last 3 years in the enclosed Proforma. We look forward to your continuing membership with EPCH. If you
have any query about your membership, please contact the Council.

 The Executive Director,
 Export Promotion Council for Handicrafts,
 “EPCH House” Pocket 6 & 7, Sector-C
 Local Shopping Centre, Vasant Kunj,
 New Delhi - 110 070
                                                                Subject: Annual Membership for the year 2008-09
 Name & Address of the Firm                              : .........................................................................................................................................
                                                         Tel. (with STD code) : ..............................................................................................................
                                                         Fax (with STD code) : ..............................................................................................................
                                                         E-mail : ................................................................................................................................
 Membership Number                                       EPCH/MEM/......................................... /...........................................................................
 Contact Person:                                         ......................................................................................................................................
                 Year of Export                                              Item of Export                                     Export Performance ( Amount in Rs.)

                 2005-2006 (April-March)
                 2006-2007 (April-March)
                 2007-2008 (April-March)
     Cheque/Demand Draft/Banker’s Cheque No. ............................................... dated......................................................                                  Amount
 Rs. 2,500/- (Rupees Two Thousand Five Hundred only) drawn on : ..............................................................................

    I / We hereby solemnly declare that the above mentioned facts are true to the best of my/our knowledge. We further declare
 that our membership is liable to be cancelled in the event of wrong declaration about export performance of Handicrafts given
 by us.
 Dated ........................                                                        Signature with Name & Designation
                                                                                                    affixing Rubber Stamp

                                                                             (Please complete the following details)
 (Fill up address of your Company here)                                                                                                                                        FOR EPCH OFFICE
                                                                                                               Received Cheque /Demand Draft/Banker’s Cheque No.
                                                                                                               ....................dated ............................for Rs. ........................
                                                                                                              Subject to realisation of cheque/Demand Draft/Banker’s
                                                                                                                                    Cheque, official receipt of above payment
 ......................................................................                                                                                     will be sent in due course.

                                                                                                                                                            CRAFTCIL • May 2008                        15
I      mpex
 This column is compiled by Consultant [EXIM Policy] of EPCH. It contains recent Public Notices, Notifications and Circulars
                of DGFT, CBEC and Department of Revenue. If a handicraft exporter has question[s] to ask on
                  Foreign Trade Policy, he/she may please write / e-mail to EPCH at

     Impex # 1                   Annual Supplement of Foreign Trade Policy 2004-2009 released                                      DGFT

                                It is customary now to announce the Foreign Trade Policy (FTP) for five years in the first instance and
No new scheme/                  then issue an Annual Supplement to it each year. The fourth and last Annul Supplement to the FTP 2004-
measure to combat               09 was released by the Union Commerce and Industry Minister in New Delhi on 11th April, 2008.

rising rupee. But               The highlights of the Annual Supplement released on 11th April 2008 and applicable to handicraft
                                sector export as well are given below:
several innovative
                                1.     DEPB Scheme Extended Till May 2009.
steps to pep up the             2.     Income tax benefit to 100% EOUs under section 10-B of IT ACT being extended for one year
exporters. Also no                     beyond 31st march 2009.

scheme measure                  3.     Additional duty credit of 2.5% for export under VKGUY.
                                4.     Relief to sector affected by rupee appreciation-interest subvention extended by one year.
                              (it will benefit the handicraft export sector as well as the handicraft sector is one of the notified sector
       affected by rupee appreciation)
5.     EPCG scheme-customs duty Reduced from 5 to 3%.
6.     Sudan, Ghana, Columbia among 10 countries added in Focus Market Scheme.
7.     Additional ports included under Export Promotion Schemes.
8.     Several measures to reduced transaction costs-EPCG scheme to be EDI enabled.
9.     Procedural simplifications announced-EOUs allowed to pay excise duty on monthly basis.
10. The limit of duty free import of samples increased from Rs. 75,000 to Rs. 100,000.
From the above highlights it will be seen, that there is nothing specific or special for handicrafts but handicraft will benefit from all the
above as they are applicable to handicrafts also among other sectors.
The ‘Special Focus Initiatives’ contained in Chapter 1B of FTP 2004-09 have been continued as they were and are given below for
ready reference for readers of Craftcil :
(a) New Handicraft SEZs shall be established which would procure products from cottage sector and do finishing for exports.
(b) Duty free import entitlement of tools, machinery and equipment, trimmings and embellishments shall be 5% of FOB value of
    exports during previous financial years. Entitlement is broad banded, and shall extend also to merchant exporters tied up with
    supporting manufacturers.
(c) Handicraft EPC is authorised to import trimmings, embellishments and consumables on behalf of those exporters for whom
    directly importing may not be viable.
(d) Specific funds would be earmarked under MAI & MDA Schemes for promoting Handicraft exports.
(e) CVD is exempted on duty free import of trimmings, embellishments and consumables.
(f )   New Towns of export excellence with a reduced threshold limit of Rs. 250 crore shall be notified.
(g) Machinery and equipment for effluent treatment plants shall be exempt from customs duty.
It may be said that the Revised Edition 2008 of FTP 2004-09 does not contain any new scheme/measure to give relief to the exporters
against the rising rupee. While this appears to be true, the exporters should not lose sight of the fact that quite a bit of relief had been
given to the exporters before the release of Revised Edition by way increased Drawback Rates, increased DEPB Rates, interest
subvention and exemption of service tax on a number of taxable services used by exporters.

 16     CRAFTCIL • May 2008
 Impex # 2                                  DEPB Scheme extended ‘till further orders’                                                  DGFT

DGFT issues two                 DEPB Scheme of DGFT is quite a popular scheme with exporters. But many importing countries
                                object to it as WTO incompatible. Some importing countries imposed countervailing duty while
Public Notices and              some threatened to do it. Lot of efforts have been made by the govt. during the last four-five years to
Department of                   bring out a suitable alternative to it.The same have not succeeded so far. But the Minister of Commerce
                                and Industry is also firm that unless a good substitute is found to replace it, the DEPB Scheme
Revenue issues                  continue.
Custom Notification             Now the DGFT has issued two Public Notices no. 133 and 134 both at 29th March, 2008 and
to extend the DEPB              Department of Revenue has issued a Custom Notification No. 41 dt. 31-03-2008 to extend the DEPB
                                Scheme ‘till further orders’. The Commerce and Industry Minister announced the extension of DEPB
Scheme ‘till further
                                Scheme till May 2009 on 11th April 2008 while releasing the Annual Supplement to the FTP 2004-09.
                                DGFT has not issued on 11th April 2008 any book containing the ‘Schedule of DEPB Rates’. But
                                containing the ‘Schedule of DEPB Rates’. But as per DGFT Public Notice 134 dt. 29-3-2008, the
‘Schedule of DEPB Rates shall continue to be operative till further orders.
The schedule of DEPB Rates on export of handicrafts noticed by Public Notice No: 17 dt. 12-7-2007 continue to be inforce till further
orders and are given below for ready reference of the readers.

Product Group: Handicrafts
Product Code: 68
 Sl.No.   Description                                                                                          DEPB Rate         Value Cap
   1.     Brass Artwares                                                                                            5
   2.     Brass Fittings                                                                                            5
   3.     Electro plated nickel silver ware (EPN)                                                                   5
   4.     German silver scrap excluding EPNS Wares                                                                  5
   5.     Hand Knotted/Woven/Tufted wool carpets, Indo-Tibetan
          carpets, Hand made Wool Druggets (Durries)                                                                4
   6.     Handicrafts made of galvanised iron articles with brass fittings
          containing 60% brass scrap and 40% G.P. sheets                                                            5
   7.     Artistic & Decorative crafted stone product (Handicrafts) made                                            6
          out of granite.

  Impex # 3                      Cut off date for filling application for import of Sandalwood                                          DGFT

DGFT issues Policy                 The procedure for import of Sandalwood (Exim Code No. 44039922 of ITC (HS) classification of
                                   Import and Export Items 2004-09) is given in DGFT Policy Circular No. 23 dt. 31st Dec. 2007.
Circular clarifying
                                   Now DGFT has issued a Policy Circular No. 32 dt. 13-03-2008 containing the clarification that the
that the last date for             last date for making application for import of sandalwood would be 31st July for each licensing
making application for             year.
                                   Extracts from DGFT Policy Circular No. 32 dt. 13-03-2008 referred to alone are given below:
import of Sandalwood
                                   It is hereby clarified that in terms of para 3 (i) of the aforesaid Policy Circular (No. 23 dt. 31-12-2007), the
is 31st July for each              last date for making applications would be 31st of July for each licensing year. Thereafter, further
licensing year.                    application would be considered on “first come first served” basis, provided the earmarked quality has
                                   not been exhausted.

                                                                                                             CRAFTCIL • May 2008              17
N       otifications
                          Ministry of Finance makes amendments in
                        Notification related to service Tax for Exporters

                Copy of Ministry of Finance Notification No.3/2008, dated 19th February, 2008
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central
Government hereby makes the following further amendments in the notification of the Government of India in the Ministry
of Finance (Department of Revenue) No.41/2007-Service Tax, dated the 6th October, 2007 which was published in the Gazette
of India, Extraordinary, Part II, section 3, sub-section (i) by number G.S.R. 645(E) dated the 6th October, 2007, namely:-

In the said notification, in the Schedule, after Sr.No.9 and the entries relating thereto, the following shall be inserted,

 (1)              (2)                             (3)                                               (4)
“10.   section 65(105)(f )      Services provided by a courier             (i) the receipt issued by the courier agency specifies
                                agency to an exporter in relation to       the importer-exporter (IEC) code number of the
                                transportation of time-sensitive           exporter, export invoice number, nature of courier,
                                documents, goods or articles               destination of the courier including name and
                                relating to export, to a destination       address of the recipient of the courier, and
                                outside India.
                                                                           (ii) the exporter produces evidence to link the use
                                                                           of courier service to export goods.

11.    section 65(105)(zzp)     Services provided to an exporter in        (i) export goods are transported directly from the
                                relation to transport of export goods      place of removal to inland container depot or port
                                directly from the place of removal,        or airport, as the case may be, from where the
                                to inland container depot or port or       goods are exported,
                                airport, as the case may be, from          (ii) invoice issued by the exporter in relation to
                                where the goods are exported.              export goods shall indicate the name of the inland
                                                                           container depot or port or airport from where the
                                                                           goods are exported,
                                                                           (iii) details of exporter's invoice relating to export
                                                                           goods are specifically mentioned in the lorry
                                                                           receipt and the corresponding shipping bill,
                                                                           (iv) exporter shall declare in the refund claim
                                                                           indicating whether such service has been received
                                                                           from the said service provider for purposes other
                                                                           than for export.

12.    section 65(105)(zzzp) Services provided to an exporter in           (i) export goods are transported directly from place
                             relation to transport of export goods         of removal to inland container depot or port or
                             directly from the place of removal,           airport from where the goods are exported,
                             to inland container depot or port or          (ii) invoice issued by the exporter in relation to
                             airport, as the case may be, from             export goods shall indicate the inland container
                             where the goods are exported.                 depot or port or airport from where the goods are

 18    CRAFTCIL • May 2008

                                                                              (iii) details of exporter's invoice relating to export
                                                                              goods are specifically mentioned in the lorry
                                                                              receipt and the corresponding shipping bill,

                                                                              (iv) exporter shall declare in the refund claim
                                                                              indicating whether such service has been received
                                                                              from the said service provider for purposes other
                                                                              than for export."

2.     This notification shall come into force on the date of its publication in the Official Gazette.
                                                                                                                (Unmesh Wagh)
                                                                                    Under Secretary to the Government of India

Note: The principal notification was published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number
      G.S.R. 645(E) dated the 6th October, 2007 and was last amended by notification No.42/2007-Service Tax, dated the 29th
      November, 2007 which was published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) by number G.S.R.
      739(E), dated the 29th November, 2007.

            Copy of Ministry of Finance Notification No.17/2008, Service Tax, dated 1st April, 2008

G.S.R. (E). In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the
Central Government hereby makes the following further amendments in the notification of the Government of India in
the Ministry of Finance (Department of Revenue) No.41/2007-Service Tax, dated the 6th October, 2007 which was published
in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 645(E) dated the 6th October,
2007, namely:
In the said notification, in the Schedule, after Sr. No.12 and the entries relating thereto, the following shall be inserted,

 (1)              (2)                                           (3)                                  (4)
“13. section 65(105)(h)          Services provided by a custom               exporter shall produce,
                                 house agent in relation export
                                                                             (i) invoice issued by custom house agent for
                                 goods exported by the exporter.
                                                                             providing services specified in column (3)
                                                                             (a) number and date of shipping bill,
                                                                             (b) description of export goods,
                                                                             (c) number and date of the invoice issued by the
                                                                             exporter relating to export goods,
                                                                             (d) details of all the charges, whether or not
                                                                             reimbursable, collected by the custom house agent
                                                                             from the exporter in relation to export goods.

                                                                                                      CRAFTCIL • May 2008          19
                                                                              (ii) details of other taxable services provide by the
                                                                              said custom house agent and received by the
                                                                              exporter, whether or not relatable to export goods.

 14. section 65(105)(zm)         (i) services provided in relation to         exporter shall produce evidence to link the use of
                                 collection of export bills,                  services specified in column (3) for goods exported.
                                 (ii) services provided in relation to
                                 export letters of credit such as
                                 advising commission, advising
                                 amendment, confirmation charges.

 15.    section 65(105)(zzb)     Services provided by a commission            (i) exporter shall provide agreement or contract or
                                 agent, located outside India, and            any other document, requiring the commission
                                 engaged under a contract or                  agent located outside India to provide services to
                                 agreement or any other document              the exporter in relation to sale of export goods,
                                 by the exporter in India, to act on          outside India,
                                 behalf of the exporter, to cause sale
                                                                              (ii) exporter shall declare the amount of
                                 of goods exported by him.
                                                                              commission paid or payable to the commission
                                                                              agent in the shipping bill,
                                                                              (iii) commission sought to the remitted is not on
                                                                              export or a canalized item, project exports, or
                                                                              exports financed under lines of credit extended by
                                                                              Government of India or EXIM Bank, or exports made
                                                                              by India partners towards equity participation in
                                                                              an overseas joint venture or wholly owned
                                                                              (iv) documents evidencing actual export or goods,
                                                                              (v) documents evidencing actual payment of
                                                                              commission to the commission agent,
                                                                              (vi) refund of service tax shall be restricted to actual
                                                                              amount of service tax paid or service tax calculated
                                                                              on two per cent of FOB value or export goods,
                                                                              whichever is less.”

 2.     This notification shall come into force on the date of its publication in the Official Gazette.
                                                                                                                     (G.G. Pai)
                                                                                    Under Secretary to the Government of India
Note. The principal notification was published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number
      G.S.R. 645(E), dated the 6th October, 2007 and was last amended by notification No.3/2008-Service Tax, dated the 19th
      February, 2008 which was published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R.
      94(E), dated the 19th February, 2008.

 20    CRAFTCIL • May 2008
CRAFTCIL • May 2008   21
E     vents overseas

                              EPCH makes vibrant display at
                         International Home & Houseware Show
                                           16-18 March 2008; Chicago, USA

    The International Home & Houseware Show in
Chicago is considered to be the world's foremost event
to source a broad global offering of houseware products
& designs, sought by consumers around the world. The
show follows four highly focused display categories, i.e.
Dine & Design Expo, Clean Contain and Outdoor Domain
Expo, Wired & Well Expo and Global Crossroads -
showcasing innovations in home décor, giftware, textiles,
furniture, etc.
     Besides, the event offers state-of-the-art education
programmes like the annual Industry Breakfast - new for
the houseware product show as well as Design Center
Plus information progammes on the latest colours by
renowned designers. This edition of the three days show          His Excellency, Mr. Ashok Kumar Attri, CGI, Chicago, USA
attracted more than 60,000 visitors from over 100                interacting with a craftperson. Also seen are Mrs. Attri and
countries, all focused on buying and selling the latest           Dr. Sandeep Srivastava, Addl. Development Commissioner
products at the world's largest home good market place.                (Handicrafts) during their visit to India Pavilion
     EPCH took its contingent of nine registered
exporters of the Council, seven Master Craftspersons of
various crafts and one entrepreneur sponsored by
O/o DC (Handicrafts). The Master Craftspersons also gave
a live demonstration of their crafts. There were crafts like,
embroidery on shawls from Gujarat, miniature painting
from Rajasthan, dry flowers & potpourri from
Chattisgarh, Kantha embroidery from Bengal, wood
carving from Sahranpur, coconut carving from South
India and tie & dye from Gujarat. The masterpieces
produced by the Master Craftspersons were immensely
appreciated by the visitors. The live demonstration of
crafts enabled visitors to learn more about the
handicrafts as well as the creative scope of various raw
materials available in India. Overall, the participation of
EPCH facilitated awareness about Indian products as well
as brand image of its skills & traditions. The Master
Craftspersons on their part gained information on
colour, design and utility preferances in many buyer            HE Mr. Ashok Kumar Attri alongwith Dr. Sandeep Srivastava
                                                                    and Mrs. Attri during their visit to India Pavilion

 22   CRAFTCIL • May 2008
                                                                                                 events overseas

    Buyers enquire about kitchenware at India Pavilion                    A view of buyers at India Pavilion

   There were several enquires that are expected to take the shape of further negotiations. The participation of
about 100 countries in the show enabled the participant Master Craftspersons to see the wide range of utilitarian
products of gifts being produced by our competitors and the requirement of consumers.
     The India Pavilion was graced with the visit of Mr. Ashok Kumar Attri, Consul General of India, Chicago, USA.
Dr. Sandeep Srivastava, ADC (Handicrafts) also visited the Indian Pavilion. Besides appreciating and encouraging the
participants from EPCH, the Consul General also assisted the Master Craftspersons in getting their contacts with the
local Association and interested parties for procuring traditional handicrafts and gifts items.

                                                  ITPO to organise
                                     India Pavilion at California Gift Show
                                                July 18-21 2008, Los Angeles

     India Trade Promotion Organisation (ITPO) is organising an India Pavilion at the California Gift Show being held
 at Los Angles Convention Centre from July 18-21, 2008. The show is managed by George Little Management (GLM)
 on behalf of DMG World Media.
     The display profile at the show includes : Fashion Accessories and Costume Jewellery (necklaces, earrings, rings,
 bracelets, scarves, hats, handbags, small leather goods, gifts, souvenirs, stationery, decorative home accessories,
 novelties, table top items, home textiles, pillows, picture frames, vases, ceramics, candles, greeting cards, paper
 products, desk accessories and perfumes, body lotions, etc.
     California Gift Show is an established show and draws participation of over 1200 exhibitors from 44 countries.
 The buyers to the show number 22,000 and represent 10,000 stores from 50 states & 39 overseas countries.
      US is the world's largest economy and is also the largest market of handicrafts. This country of 300 million is
 home to diverse communities, who long for the best products from diverse cultures. California is listed amongst the
 top 6 economies of the world and is about the size of mainland China, and larger than Brazil, Canada and Spain.
 California is also a major business hub in the US and is responsible for nearly 30% of the external trade of US.
 Needless to add, California is home to the wealthiest celebrities and Hollywood personalities. It is also a major
 trading centre with distribution network and linkages spread out all over the US, especially the West Coast.

                                                      For details contact:
                                              D.K. Nangia, Senior Manager, ITPO
                         E-mail :, Tel : 011-23331441, Mob : 09911510008

                                                                                          CRAFTCIL • May 2008         23
events overseas

                                 EPCH marks its presence at
                                 41st Cairo International Fair
                                          18-28 March 2008; Cairo, Egypt

    Cairo International Fair, the largest business to business and
business to consumer trade event in the Middle East and North
Africa, targeting every major manufacturer, wholesaler and
supplier of products and services, signed off on 28th March, 2008.
It was organised by General Organisation for International
Exhibitions & Fairs (GOIEF) at Cairo Fair Grounds to exhibit
products on segments like, agricultural & food processing,
electronic and telecommunication, handicrafts & art, machinery &
equipment, alongwith stalls from service sectors like finance,
banking, etc.                                                          Visit of H E Mr. Gopinathan, Ambassador of
    EPCH participated with a delegation of 6 members consisting                 India to Egypt at EPCH stall
of 5 National Award Winner Craftspersons and a manufacturer
     His Excellency, Mr. Gopinathan, Ambassador of India to Egypt
visited the Indian stalls and boosted the morale of participants.
Mr. Mazoomder, Consular of Embassy of India to Egypt also visited
the fair and interacted with the participants. All the participants
got generous enquiries for the products displayed. As Egypt is
one of the fastest growing market of the region with enormous
potential for Indian products, Indian companies have been a
regular participants of the fair. Cordial and warm relations          Mr. P D Mathur, Dy. Director, Office of DC (H)
between India and Egypt facilitate the demand of Indian goods in      in meeting with Ambassador of India to Egypt
the traditional Egyptian market.                                            at the Embassy of India at Cairo

                                                                      Mr. P D Mathur in Meeting with Mr. Mazoomer,
                                                                       Consular General (Commerce and Business),
                       Buyers at Indian stalls                                   Embassy of India Egypt

24   CRAFTCIL • May 2008
                                                                                                  events overseas

                              Gifts Expo Spring 2008 at Moscow
                                          24-27 March 2008; Moscow, Russia

     Eastern Europe's biggest international specialised
trade fair, Gifts Expo Spring 2008, was held during
24 - 27 March in Moscow’s Manezh Exhibition Complex by
Gifts Expo Ltd. with support of Gifts, Houseware &
Costume Jewellery Manufacturers and Suppliers
Association, Russia and Moscow Foundation for
Consumers’ Rights Protection. This trade fair is termed as
an effective business area for commercial contacts and
negotiations and professional exchange of business
information. Foreign companies presenting their
products at the fair are interested in searching partners &
distributors in Russia and consider the fair as the best
way to enter Russian market.
    The fair included specialised sections like gifts &        An EPCH official briefs visitors about the Council’s event
interior decoration, costume jewellery & accessories,
Christmas & festive decorations, houseware & dining
decor, business souvenirs & corporative gifts.
    About 300 companies presented around 700
trademarks at this event. There were companies from
Russia, CIS (Ukraine, Byelorussia), France, Italy, The Czech
Republic, Hong Kong, China, Taiwan, Philippines, India,
Vietnam, Chile, Slovenia, Latvia and Lithuania. National
pavilions were from India, Taiwan and Hong Kong.
    More participants are expected in the Autumn
version of the fair as it coincides with the festive buying
season.                                                                 Home decor arouses interest of buyers
    EPCH participated with 7 member exporters who
took along a variety comprising bags, purses, shawls,
giftware, houseware, incense, steelware items, etc. The
main purpose of the Council's participation was to take
Indian products to people who are willing to import from
India but are not aware about the import channel.
    In Russia, the costume jewellery market growth is
about 30-40% every year. Bijouterie and accessories have
20% of this market together with gold and silver jewellery
(50 %), hand watches (20%) and premium-level jewellery
(10%). The bijouterie market is far from saturated and
entry into the market is fairly easy. For the near future,               Buyers at a fashion accessories stall

                                                                                           CRAFTCIL • May 2008          25
events overseas
                                                                                                                                                      products made of different materials like metal, glass and
                                                                                                                                                      plastic. Ceramic and porcelain tableware is a particular
                                                                                                                                                      market favourite. The bijouterie demand is influenced by
                                                                                                                                                      fashion trends. The Russian promotional souvenirs
                                                                                                                                                      market has great prospects as well. According to
                                                                                                                                                      specialists' opinion, annual growth is close to 20%; in
                                                                                                                                                      some companies this index reaches 40%. So its volume
                                                                                                                                                      can exceed $ 1 mlrd by 2012 if the rate of growth is the
                                                                                                                                                      same as at the present time.
                                     Incense products find takers                                                                                         As for the New Year gifts market, the main trend is
                                                                                                                                                      the earlier commencement of consumer activity. The
                                                                                                                                                      other trends are the growing demand for expensive New
                                                                                                                                                      Year products and the increasing interest in exclusive
                                                                                                                                                      and original gifts.
                                                                                                                                                           In the near future the specialists expect the growth
                                                                                                                                                      of the market in quality as well as in quantity, increasing
                                                                                                                                                      number of specialised stores, development of network
                                                                                                                                                      structures and the entry of new players in the market.
                                                                                                                                                          The development of the market depends on habits
                                                                                                                                                      and traits of the Russian consumer. Recently the culture
                                                                                                                                                      of giving gifts has changed a lot by adopting some
         Buyers having a close look of the displayed products                                                                                         eastern traditions. New holidays in Russia have brought
                                                                                                                                                      new ways of making presents such as gift certificates.
specialists predict consolidation of small market
                                                                                                                                                      Packing sales are also catching on as customers are
participants and the division of the market between
                                                                                                                                                      preferring elegant and beautiful packaging over free of
several major market players in the rapidly developing
                                                                                                                                                      cost packaging (that also looks reasonably presentable).
hair accessories market. The entry of major international
players to this market is also possible and can't be                                                                                                      Market analysts note a recent increase in specialised
excluded. The tableware market volume is $ 550 - 660 mln.                                                                                             stores. Another tendency is the rapid development of
The Russian market of tableware is presented by                                                                                                       network structures for gifts products sales.

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