The country's handicraft sector faces multiple challenges like inadequate finance for entrepreneurs and lack of innovation in designs, compounded by skill gaps, resulting in lower-than-expected export earnings.
Besides, unorganised supply chain, limited competitiveness and weak country branding are also contributory factors for this sluggish state of the promising sector, according to industry insiders.
However, they said the sector holds huge potential on the back of buyers' focus shifted from major exporting countries like China and Vietnam due to higher cost to countries like Bangladesh.
Besides, Bangladesh is abundant in natural resources for handcrafted items and affordable labour that indicates prospects of better earnings from the sector if provided with necessary policy support.
Bangladesh's handicraft exporters' earnings have fluctuated in the past five fiscal years (FY) between FY 2020-21 and FY 2023-24, according to data available with the Export Promotion Bureau.
They got export receipts of $42.83 million in FY 2021-22 as global buyers showed special interest in eco-friendly and natural artefacts during the trying times of the Covid-19 pandemic.
However, the figures witnessed ups and downs in the next two fiscals.
Sources said during Covid pandemic global buyers reduced their spending on apparel and other items and showed increased interest in eco-friendly goods.
They said the local handicraft sector is mainly driven by jute, bamboo and cane, followed by pottery, puppetry and crafts like embroidery and tapestry.
A Bangladesh Bureau of Statistics survey shows about 44-per cent handicraft establishments are bamboo and cane-based.
As many as 73,542 handicraft establishments are in operation across the country and 97.6 per cent of them are household-based.
The industry is dominated by female entrepreneurs who own 51.2 per cent of the establishments.
Entrepreneur and former FBCCI director Rashedul Karim Munna believes the sector can fetch more foreign currencies if existing challenges are well-addressed.
Mr Munna, managing director of Creation Private Ltd, says his company exports mostly export jute diversified products as well as coconut fibre, recycled garment offcut and palm-tree straw.
Sharing an experience of a recent visit to a major global expo-Ambiente Fair-in Germany, he said international buyers are currently looking for potential countries as alternatives to China due to higher tax imposed by the Trump administration.
"All global buyers are now keeping that taxation issue in their mind. For example, a US buyer has to pay 50-per cent higher tax on average while buying from China," he said, adding that this trend paves the way for more focus on other countries like Bangladesh.
"Besides, Bangladeshi handicraft export is growing fast to EU countries, the UK and Japan, thanks to GSP facilities," mentioned Mr Munna.
One of the positive aspects of Bangladesh is comparatively lower labour cost than China as monthly average salary there has almost doubled from $300 to $600 in recent years.
"However, their productivity is much higher-almost four times-than a Bangladeshi worker," cited the entrepreneur as he explained that Chinese use modern machinery for making.
He identified Bangladesh's limitation in large-scale production and complexities related to compliance management as some challenges.
He underscored the need for country branding, establishment of large-scale production facilities, design innovation and capacity enhancement.
Sources said Bangladesh exports handicraft merchandises-the list includes handmade attires and various household items made of natural ingredients like clay, jute, cane and seaweed-to more than 50 countries.
According to a study by the global think tank Credence Research, the global demand for handicrafts was valued at $1005.49 billion in 2022 and is expected to double around $2317 billion in 2030.
The market is expected to grow at the compound annual growth rate (CAGR) of 11 per cent between 2023 and 2030.
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