Ten artisans close firms as new lump-sum taxes threaten handmade trades

Ten artisans have already filed documents to close their businesses, signalling a growing exodus of small craft producers across the country. Those most at risk are makers of souvenirs, filigree craftsmen and tailors — trades in which every finished piece is unique and takes hours or days of labour.

Unlike conventional retail, where stock turns quickly, handmade production is slow and profit margins are thin. For one-of-a-kind items that require long hours to complete, the recently introduced, drastic lump-sum taxes (paushali) have become an unbearable burden for many.

With winter approaching and the number of tourists falling to its seasonal low, these makers face what many describe as a fait accompli. To avoid losing the skills inherited from previous generations, a large number of artisans are already packing up their tools and moving their work into private homes.

Shift to online sales and growth of informal economy

Products that used to be displayed in authentic craft shops are increasingly sold via social networks and online platforms — a move that, while keeping incomes afloat, deepens the informal economy. The shift reduces visibility for traditional craft stores and complicates tax and regulatory oversight.

The few craftsmen who remain committed to staying legal warn that prices for handmade products will soon have to rise. The open question is whether domestic buyers will be able to afford that luxury amid a widespread economic squeeze.

Photo: press material from the event