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The Role of Craft-Based Enterprises in

‘Formalising' India's Informal Artisan Economy

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Business of Handmade (2021) explores the relationship between the informal economy and the cultural economy by studying 12 creative and social enterprises working in India's artisan sector.


Upto 200 million people in India depend on craft for livelihood.

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“India’s so-called informal economy comprises the bulk of the nation’s livelihood opportunities. The recent acknowledgement of creative and cultural industries as perhaps the largest sector globally gives even greater importance to India’s informal economy because these industries are located here. Of India’s creative and cultural industries, the handmade sector is clearly the largest and impacts anywhere up to 200 - 250 million participants.”

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India’s artisan sector is the 2nd largest employer after agriculture.

With 90 million new jobs needed in the non-farm sector by 2030, it’s time to revisit the role of micro and small enterprises (MSME) as the bridge between the formal and the informal.

Of the 5,600+ micro, small, and medium enterprises (MSME) clusters operating in the country, over 3,000 of them are craft-based. 



Unlike many countries in the Global North, craft is the manifestation of India’s identity, “a 5,000-year-old extant, unbroken, well-documented, civilizational, cultural heritage.”


With over 3,000 rich craft traditions to draw from, India’s artisan sector is creative, imaginative and brimming with potential. Craft is intertwined with the everyday and woven deeply into a community’s social fabric.

Unlike mass-manufactured products, every handmade creation is unique, and carries the signature of its maker. Products are shaped by the interplay of beliefs, histories, materialities, and unique processes.

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Stories of enterprises from India's artisan economy.

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The ways of working are as diverse as the regions, people and crafts of India.

We spoke to enterprises about working with artisans in informal conditions and the challenges of formalisation. Artisans, experts, and industry stalwarts shared what they value, customs that shape behaviour and culture, choices that drive business, and solutions that address sustainable production.

Heralding in the new formal'

UNDP observes that nature-based solutions can unlock $10 trillion in financial opportunities and create 395 million jobs by 2030.

The formal-informal interplay has the potential to be a safe space for a more equitable and inclusive dialogue between diverse stakeholders. With the right support, the small to medium enterprises working with India’s artisan economy can close the gap between the actual and the potential, and give impetus to the ‘new formal’.


Craft-Power to Craft-Poor

India was the world’s largest economy between 1000 A.D. to 1700 A.D. (Maddison, 2003). producing almost 25% i.e. a quarter of the global industrial output. Agriculture and the artisan sector, dominated this landscape. Scaffolded by indigenous technologies and innovations, they produced raw materials, textiles, metalware, and food products for local and global audiences. 

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In the 1700s, India's agricultural and labour-intensive manufacturing economy became increasingly vulnerable (Shah et. al, 2015, Williamson, 2013). A colonised India was forced to abandon her self-sustaining practices to become reluctant consumers of British-manufactured products. Her high quality exports were either banned or heavily taxed while British goods made up 3/4th of India’s imports, her artisans were compelled to deliver popular cottons and silks at below market rates, and her farmers were pushed to adopt agricultural practices that were untenable to meet Europe’s demand in exports. 

India’s approaches were described as “barbaric and backward in European theory” and a highly organised sector was steadily destroyed, leaving home-based industries to barely survive. Even if India wanted to keep up with the industrial revolution and the innovations of the West, she could not. 

300 years later, the economic breakdown of a nation was seemingly incurable — in 1950, India’s share of the world GDP was a mere 4.2%.


Today, the artisan sector in India commands $100 bn of the global share and reports 20% growth YoY in exports.

With the right investment and policy support, the potential is immense — for jobs, inclusion, and sustainable growth.

Choosing handmade also means safeguarding India’s creative and cultural capital — one that originates from and is rooted in the uniqueness of people and place.

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The Role of Craft-Based Enterprises in ‘Formalising’ India’s Artisan Economy

Business of Handmade

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