In Punjab, A Handcrafted Box Modi Gifted Trump Reveals Depth Of India's Economic Slowdown

Prime Minister Narendra Modi with US President Donald Trump in June 2017 at the White House in Washington D.C. (Photo: Xinhua News Agency via Getty Images)

HOSHIARPUR, Punjab — When Prime Minister Narendra Modi visited the White House bearing gifts in 2017, one of his presents to US President Donald Trump was a lustrous rosewood chest filigreed with delicate inlay carved in Hoshiarpur. First Lady Melania Trump was gifted Kashmiri shawls, a silver bracelet from Himachal Pradesh and tea and honey from the Kangra Valley.

The gifts were meant to showcase India’s vibrant handicraft industry, but three years on, the artisans who crafted the box say a perfect storm of bad government policy, demonetisation, the Goods and Services Tax, and international environmental regulations on wood exports have hobbled their industry. 

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Today, as economists puzzle over the precise causes of the Indian economy’s precipitous slowdown, the plight of Hoshiarpur’s woodcarvers suggests that, broad brush macro-economic decisions apart, reviving each sector will require attention to detail, focused policy tweaks, and international lobbying of the sort the Modi government has proved incapable of thus far. 

At the surface, the impact of each policy misstep appears small — but taken, together, artisans say, these decisions have had a cascading impact that has brought a 300-year-old industry to the brink of extinction.

“These are craftsmen who have created masterpieces worth lakhs that were once sold in the international markets and given as gifts to the head of states,” said Rupan Mathuru, a winner  of the government’s annual “Shilp Guru” awards for master craftsmen. “Some of them are even working as bonded labour with some export houses as they have taken advance loans which they cannot repay in this life.”

Shammi Lal, a 61-year-old award-winning inlay craftsman, said the crisis in wages and employment had meant skilled wood carvers were migrating to the Middle East to work as ordinary carpenters. (Photo: HuffPost India )

CITES and Vriksh

Dalbergia sissoo and Dalbergia Latifolia, commonly known as north Indian Sheesham and Rosewood, form the foundation of Hoshiarpur’s famous wood-inlay industry. The wood is hard and doesn’t warp with changing seasons, making it an ideal base for intricate carving and inlay work. While Hoshiarpur was once famous for ivory inlay, elephant tusk has long been replaced by acrylic chips as fine as 3 millimetres in width. 

In 2017, the international Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) included all kinds of rosewood on a list of restricted trade items. The decision was taken after several Latin American countries protested that surging demand from China was decimating rosewood forests across the world. 

The impact was keenly felt in India: while southern Indian rosewood, or Dalbergia latifolia, is considered a vulnerable tree species; the northern Indian counterpart Sheesham, the Indian government and the handicrafts lobby has argued, should be exempt.

Wood inlay craftsmen of Hoshiarpur have responded to the economic slowdown by trying to find Sheesham substitutes, and focusing on the domestic market instead. But local wood isn’t hard enough to produce fine carvings. The result? Bigger designs, cheaper products and lower earnings for craftsmen. (Photo: HuffPost India )

In August 2019, the Indian government lobbied to get sheesham removed from the list of restricted species, but failed. In the meantime, India’s opposition to the inclusion of rosewood under CITES meant Indian rosewood exporters could no longer export with a CITES certificate. Instead, the Indian government created its own international compliance certificate called Vriksh that, exporters say, has created a fresh set of hurdles and bureaucracy.

The Vriksh certificate is intended to ensure the wood used in the handicrafts is legally, and responsibly, sourced. Instead, craftsmen said, it has empowered a middle layer of wood-traders who have inflated the prices of wood.

“We are also facing shortage of raw material and unable to procure adequate Sheesham wood through legal means despite it being in abundance in India” said Sajil Jain, proprietor of Kanhya Lal Brij Lal, a 165-year-old manufacturing firm in the traditional Dabbi bazaar in the city. 

Craftsmen have responded by trying to find Sheesham substitutes, and focusing on the domestic market instead. But local wood isn’t hard enough to produce fine carvings. The result? Bigger designs and cheaper products and much lower earnings for craftsmen. 

“The finest work has motifs as small as 3mm with an acrylic sheet of 2 mm width. It used to take two months to complete an inlay on a small wooden elephant of 10 inches height. Now artisans are using motifs as big as half an inch to complete the work to cut time and to increase productivity,” said Matharu. 

But while the intricate wooden rosewood elephant was priced at Rs 25,000, the newer cheaper elephant is priced at as little as Rs 5,000 in the whole sale market. 

Demonetisation and GST

“No one want to  buy expensive stuff as they now have to furnish proofs like PAN and Aadhaar details at the time of purchase,” said Rajiv Plaha, a retailer in the Dabbi Bazaar. “Customers refrain from buying expensive stuff fearing scrutiny by the IT department and other enforcement agencies.” 

The GST, in the meantime, has created its own problems.

“Initially, the handicraft industry was exempted from the sales tax but later  the government imposed 6% VAT on the wooden handicrafts,” said Madhu Sudan Jain, a Hoshiarpur-based exporter. “In 2018, a GST of 12% levied on the wood inlay items has caused a huge setback to the industry.”

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Another exporter, who preferred to remain unnamed, said government departments like the state-run Central Cottage Industry Emporium outlets in metro cities were failing in their tax obligations to craftsmen and traders.

“They pay the price after deducting the GST amount from the actual sale amount and pay us only after we file our GST returns in three to six months time,” said the exporter, who claims the government owes him Rs 6 lakh in back-taxes.  

The confusion around GST refunds has affected exporters across the Indian economy, but handicrafts — which are cash-intensive businesses with significant working capital constraints — have been particularly hard-hit. 

This table carved in Sheesham wood has over lakhs of depressions manually filled with acrylic material . A Hoshiarpur-based artist took six years to complete this masterpiece. (Photo: HuffPost India )

Labour flight

The struggles of the handicraft industry have meant that skilled craftsmen are now looking elsewhere for work. Shammi Lal, a 61-year-old award-winning inlay craftsman, said the crisis in wages and employment had meant skilled wood carvers were migrating to the Middle East to work as ordinary carpenters. 

“I am only an artist and do not know how to find customers online or file GST returns,” Lal said. “How do you expect me to run a business of my own? I can’t even get an approval to avail my state awardee pension of Rs 3.500 in the last 15 years.” 

Saying this, Lal lit a wooden lamp he had made himself, and turned his attentions to an elephant carved out of sheesham wood. 


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This article originally appeared on HuffPost.