EUTR compliance stares Indian exporters

From 2019 wooden handicraft exports will require ‘legal timber’ certification, even from Indian sources

ShravanChopkar of Durg, Chhattisgarh, creates beautiful joint-less single-piece wooden articles like miniature temples and houses.

Indian exporters of wooden handicrafts and other wood goods face strict traceability norms in the European Union (EU) beginning 2019, which could dent their trade. Starting next year, the new strict rules require disclosure of the source of timber to discourage illegal logging globally.

Over the past two months, at least 80% of buyers in the EU, Australia and the US have asked for certificates declaring the source of the wood used in handicrafts and if any species was endangered while procuring it, according to the International Timber Trade Organisation.

“Wood consumers in the EU are conscious of the environmental aspect and want wood to come from legal sources because in Asian countries, there is illegal procurement of wood without any traceability,” said Mr Rakesh Kumar, executive director of the Export Promotion Council for Handicrafts.

Australia and the US have gone one step ahead, asking for proof of due diligence, he said, on the basis of their laws such as Australia’s Illegal Logging Prohibition Act and the US Lacey Act.

About 35% of India’s wooden handicraft exports go to the EU and 45% are dispatched to the US. Exports of wooden handicrafts grew 9% to Rs 4,267 crore in 2017-18. In the first six months of 2018-19, these shipments grew 33% to Rs 2,619 crore.

“We expect all our overseas buyers to ask for such compliance,” Kumar said. As per international norms, official permits are required to export handicrafts made of sheesham and rosewood.

This is weighing heavy on the Indian wood-based handicraft exporters, considering the adverse impact on the business due to an additional layer of regulation, resulting in cost escalation and extended business cycles, thereby hampering the competitiveness of the exporters.

Moreover, the norms indirectly cover others types of wood such as mango, babool and acacia as well. The other types of wood in India include ebony, neem, salwood, khair and poplar.

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