How Capacity Building Augments Growth Of Geographical Indications
A) Skills and Training The India
– EU IP Dialogue should include capacity building excises via training, exchanges for GI. This can be facilitated via the European Union Intellectual Property Office (EUIPO) and the IP Awareness department under the DPIIT. An example of collaboration along these lines is AFRIPI - the EU GI engagement in Africa.
Enabler: National Institute of Design may conduct a wide range of courses for artisan skilling and development for the MSMEs involved in GIs.
Enabler: Another example along similar lines is the Footwear Development and Design Institute. FDDI conducts a wide range of professional programs in footwear design & production management, creative designing CAD/CAM, fashion merchandising & retail management, leather goods & accessories design, fashion design, and business management, etc. thus, providing trained high-class professionals, managers, fashion designers, technologists to the footwear industry, and helping keep pace with growing demand.
B) Artisanal Clusters and designated GI manufacturing zones
Economic Clusters are geographic concentrations interconnected businesses, suppliers, and associated institutions in a
particular sector. By gathering into clusters and undertaking joint actions, manufacturers increase their productivity
and competitiveness. It is estimated that 400 modern small-scale enterprises and 2000 rural and artisan-based
clusters exist in India. For example, the knitwear cluster of Ludhiana, the Gems and Jewellery exports clusters from
Surat and Mumbai, and Paithani clusters from Maharashtra. However, challenges such as enhancing competitiveness,
access to global markets, safeguarding intellectual property remain. The already designated MSME and Artisanal
clusters could be extended to GI manufacturers.
There are already a number of existing schemes on a pan India basis that address economic clusters for artisans and MSMEs. These should be extended to Gi manufacturers.
1) Micro and Small Enterprises- Cluster Development Programme – Government of Maharashtra Govt. of India, Ministry of MSME has announced the scheme for Micro and Small enterprises for enhancing their productivity and competitiveness as well as capacity building. The objectives include capacity building, market development activities, management development and technology up-gradation, the establishment of common facility centre (CFCs), enhancement of the productivity and competitiveness of micro and small enterprises, facilitation of economies of scale in terms of deployment of resources and build the capacity of MSEs through the formation of Self Help Groups, Mutual credit guarantee funds, etc. The scheme has set priorities for three special categories: Cluster should have a suitable presence of
-Women entrepreneur
-Entrepreneur belongs to SC/ ST/ OBC/ Minorities etc.
-Micro enterprises. (Clusters of micro and village enterprises have the provision of enhancing financial support
by 10%)
Recommendation: to add GI producers into the priority list for special categories to encourage a significant representation and active participation.
2) Mega cluster scheme or the Comprehensive Handicrafts Cluster Development Scheme (CHCDS). The focus of the CHCDS initiative is on integration of scattered artisans, building their grass root level enterprises and linking them to SMEs in the handicrafts sector to ensure economies of scale. The mega handicraft clusters having more than 10,000 artisans will be selected for overall development under this scheme.
The Mega Cluster Scheme was launched by the Central Government - Ministry of Textiles. It is an approach to scale up
the infrastructural and production chain at Handicrafts clusters. It aims at the clusters which remained unorganised and
have not kept pace with the modernisation and development. This scheme can assist GI producers in the informal
sector to move towards the formal sector through actions taken on the basis of the proposed components along with
assistance in other forms such as capacity building, standardisation and marketing.
From the proposed components of the mega cluster, the following components can go hand in hand with the
recommendations around digital manufacturing, skills and training and creating marketing linkages as proposed earlier
in this paper under the headings standardization, scaling up production and capacity building.
3) PM Mitra Parks- PM MITRA , inspired by the 5F Formula encompasses - Farm to fibre; fibre to factory; factory to fashion; fashion to
foreign is intended to generate ~1 lakh direct and 2 lakh indirect employment per park. The Government has approved
setting up of 7 Mega Integrated Textile Region and Apparel Parks with a total outlay of Rs. 4,445 crore in a period of 5
years to enable the following:
1. Core Infrastructure: Incubation Centre & Plug & Play facility, Developed Factory Sites, Roads, Power, Water and Waste Water system, Common Processing House and other related facilities e.g. Design Centre, Testing Centres etc.
2. Support Infrastructure: Workers' hostels & housing, logistics park, warehousing, medical, training & skill development facilities.
Recommendation: The Central government has stated their willingness to converge with other Central or State
Government Schemes supporting the textile sector. This collaboration can be extended to promote the growth of
GIs by providing a designated space in the PM Mitra Parks for assistance with core and support infrastructure
facilities. This will increase competitiveness for GIs in the textile industry by helping them achieve economies of
scale and create job opportunities as intended by the objectives of the scheme.
4) National Institute of Fashion Technology (NIFT)- creating a cluster development program for handicrafts.NIFT with support from the Ministry of Textiles, Office of Development Commissioner (Handlooms) and Office of Development Commissioner (Handicrafts) has developed and implemented a new Craft Cluster Initiative Program. Through this initiative, NIFT aims to reach out to the artisans and craftsmen at the grass-root level. The students of NIFT work closely with artisans and craftsmen involved in the initiative and assist them through knowledge dissemination and exposure to urban markets and design intervention, innovative designs and forming linkages with new markets. The artisans and weavers are also invited to NIFT campuses for exposure workshops, demonstration workshops, exhibitions and craft bazaars where they get an opportunity to interact with the craft experts, upgrade their product and design knowledge and understand consumers in the urban markets.
Recommendation: NIFT may continue efforts to work with craftsmen also with a specific focus on approaching
more GI producers connected with the handicrafts and fabric sectors. Moreover, in this process, NIFT may assist
more craftsmen to obtain GI tags through continued knowledge dissemination, technology and skill development.
Enabler: Ministry of Commerce and Industry
Enabler: RUDSETI – Rural Development & Self Employment Training Institute can assist in training
entrepreneurs by assisting in methods listed under their goals – creating awareness on self-employment, resource
utilisation and capital build-up, demystification of technology)
Enabler: Registrar for Geographical Indications, DPIIT
C) Finance
a. Cash flow management Cash flow will always be a constraint for GI product manufacturers, we recommend the SEBI model of T+2 is followed, this will ensure the entrepreneur has working capital based on the off-take of their produce. Once the entrepreneur or manufacturing unit gets the necessary scale, Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTSME) facilities must be extended.
b. Microcredit
Microcredit is a common form of microfinance that involves extremely small loans given to individuals, most times from low-income backgrounds to help them become self-employed or grow a small business. “The unique feature of MSMEs is that they are widely dispersed across sectors of the economy producing a diverse range of products and services to meet local as well as global markets. Needless to mention that the contribution of MSME is 8 per cent of GDP, 45 per cent of manufacturing output, and 40 per cent of exports of the country and uniquely they are the least investment-driven with high returns. Employment creation is next to agriculture, thus the MSME sector has the potential of tapping individuals to associate with economic activities by way of self-employment”
c. GST
As per the GST for MSMEs booklet 2019, GST cuts were proposed on handicrafts and textiles along with benefits for the entire MSMEs industry. However, due to COVID-19, the handicrafts industry has taken a hit and as quoted by an article focused on the handicraft artisans' hope for a GST cut, “Artisans in the handicraft sector are looking for greater tax relief to overcome the financial impact of the economic downturn and the Goods and Services Tax (GST) rates. Mysuru is one of the major hubs for handicrafts and supports nearly 5,000 to 6,000 families who are mainly engaged in wood inlay works, furniture, and the making of idols. But the imposition of GST – which is 18% for furniture and 12% for wall hangings, inlay works, and other decorative items – has hit the artisan community hard. There is no GST on making small idols of gods and goddesses but the bulk of revenue for artisans comes from furniture and inlay works.”
