Zero Tariffs, Unclaimed Preferences: Free Trade Agreements and the Net Value of Market Access for India’s Handloom and Handicraft Artisans

Debangee Karmakar; Mitesh K. Patel

Zero Tariffs, Unclaimed Preferences: Free Trade Agreements and the Net Value of Market Access for India’s Handloom and Handicraft Artisans

Author(s)	Ms. Debangee Karmakar, Mr. Mitesh K. Patel
Country	India
Abstract	India's recent free trade agreements (FTAs) with the UAE, Australia, the United Kingdom and the European Union promise zero or sharply reduced duties on textiles and handicrafts. Yet 67 per cent of India's 31.4 lakh handloom households earn under Rs 5,000 a month, and only an estimated 20 to 30 per cent of eligible Indian exports claim FTA preferences. This paper asks whether tariff elimination reaches artisans once the fixed costs of proving origin and meeting technical standards are counted. Using official data from the Ministry of Textiles, the Press Information Bureau, the Ministry of Commerce and the Fourth All India Handloom Census (2019-20), it combines descriptive trend analysis with a preference break-even model: a claim is rational only if tariff saved exceeds compliance cost, so the minimum worthwhile consignment equals fixed compliance cost divided by the preference margin. Three findings emerge. First, exports of handloom products fell from US$369 million (2015-16) to US$269 million (2021-22), and total textile and apparel exports including handicrafts were 15 per cent lower in 2024-25 than in 2021-22 in dollar terms, so aggregate data show no artisan export dividend from the first FTA wave. Second, the UAE and Australia agreements do not cover India's main craft markets; the EU and UK agreements do, so the decisive test lies ahead. Third, under illustrative assumptions a 10 per cent preference margin and Rs 65,000 of fixed compliance cost make claims unprofitable for consignments below about Rs 6.5 lakh, a threshold far above what a cooperative of low-income weavers’ ships alone. The paper proposes cooperative-level origin certification, shared testing facilities, mutual recognition of geographical indications, and an artisan-ready path to the EU Digital Product Passport.
Keywords	free trade agreements; handloom; handicrafts; rules of origin; FTA utilization; geographical indications; Digital Product Passport; India
Field	Sociology > Economics
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-10-13

View / Download PDF File

About IJFMR Fees & Payment Current Issue Publication Archive	Submit Research Paper Track Submission Status Publication Guidelines Publication Ethics Peer Review & Plagiarism	Join as a Reviewer Editors & Reviewers Reviewer Referral Program Get Reviewer Membership Certi.	Website/Journal Policies Usage Policy Content Policies Privacy Policy

Contact Us		+91-9687-828-838	editor@ijfmr.com

International Journal For Multidisciplinary Research

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Zero Tariffs, Unclaimed Preferences: Free Trade Agreements and the Net Value of Market Access for India’s Handloom and Handicraft Artisans

Share this