Renowned globally for its marble mosaics and stone carvings, Agra’s handicraft industry stakeholders are a worried lot after United States’ decision to impose 26 per cent tariff on these products. With over 80 per cent of Agra’s annual handicraft exports — valued at `1,500 crore — heading to the American market, the tariff issue has got alarm bells ringing among artisans, exporters and traders.
Tourists from the US, who form a significant chunk of foreign visitors to the world famous Taj Mahal, are also the biggest buyers of local handicrafts. These purchases are usually shipped directly to America from the emporiums in Agra, which number over 500. With the new tariff structure, there will be a 26 per cent difference between handicraft’s price paid in India and its cost on arrival in the US — making it a major deterrent for prospective buyers.
“This is a huge setback,” rued Prahlad Agarwal, President of the Agra Tourist Welfare Chamber. “Till now, exports were happening under a one per cent duty bracket through Harmonised System of Naming (HSN Code). But a sudden increase to 26 per cent will make our products uncompetitive in the American market.”
Rajat Asthana, President of the Handicraft Exporters Association, echoed these concerns, pointing out that the overall tax burden on Indian handicrafts will now rise to 31 per cent, including new US tariff and existing 5 per cent GST. “Many American customers don’t carry these artifacts back. They place export orders from home. With this hike, new orders will shrink, and previously placed orders — if dispatched after April 9 — will also attract this high tariff,” he explained.
Exporters are now adopting a ‘wait-and-watch’ approach, but fear that if the tariff remains in force, the entire handicraft sector may slip into recession. “We need urgent support from the Indian government. Either a drawback scheme must be provided or compensatory measures introduced. Without relief, this sector — already struggling under GST regime — will collapse,” Asthana said. This is the first time the industry had faced such a heavy blow in decades. With profit margins shrinking and input costs rising, many artisans and exporters fear layoffs and reduced production in the coming months.
