Indian Handicraft Industry contributes very important role in Indian economy. For the proper functioning and operation of industry it is very essential to have some policies and regulation in place. In India, the Ministry Of Textile is responsible for the formulation of policy, planning, development, export promotion and regulation of the Handicraft Industry. There are several other bodies and organizations which help to formulate and execute these policies. All policies should be implemented for the greater development of the whole industry so that it can help to strengthen the economy.

Industrial Policy:

There are no restrictions regarding location for establishing manufacturing units.
All producers of handicrafts are exempt from obtaining Industrial License to manufacture. The delicenced undertakings, however, are required to file an Industrial Entrepreneur Memoranda (IEM) in Part 'A' with the Secretariat of Industrial Assistance (SIA), and obtain an acknowledgment. No further approval is required.

Trade Policy:

Handicraft products fall under the ITC (HS) code 97.
Paintings, drawings and paintings, domestic articles of wood etc. which come under 9701
Original engravings falling under 9702
Original sculptures categorized under 9703
Products under the code 9704 are freely importable.
Imports of items in 9705 are restricted.

Characteristics of Indian Handicrafts for exports; as defined by Govt. of India are:

They are quota free and neutral to fiber content or composition, barring 100% silk.
They include Garments, Made-up and clothing accessories.
Are produced in cottage industries.
Should not have zippers.
Must be ornamented using any one or more of the following Indian folk styles.
Hand painting, Hand printing, Batik, Tie and Dye, Kalamkari.
Hand embroidery, Crocheting.
Appliqu� work of sequins, wooden or glass beads, shells, mirror, ornamental motifs of textiles materials.
Extra wrap of welt ornamentation of silk, art silk or zari threads.
Should conform to shape and styles of each item as defined in the agreed list of different countries.
Should satisfy the dimensional aspects.

Tariff-non-tariff Policy:

Except for 9704, all the items under 97 attract a total import duty of 35.2 per cent. This includes a basic duty of 35 per cent and a special additional duty of four per cent. Items under 9704 do not attract any import duty.