Nov 5

Nov 5 Sumita Ghose’s Rangsutra is a unique enterprise partly owned by Indian artisans

The Global Indian Times Interview

November 5, 2022

Rangsutra was founded by Sumita Ghose to try and provide regular work to artisans in rural India. Based in Gurgaon, near Delhi, it sells kurtas, scarves, jackets, home furnishings and other goods, produced by more than 2,000 artisans in the states of Rajasthan, Uttar Pradesh, and Jammu & Kashmir. The sales enable artisans to work throughout the year to support their families. Rangsutra has 125 full time employees.

Ghose, who is the managing director of Rangsutra, earned a BA in economics from Elphinstone College, Mumbai, and an MA in economics from Mumbai University. In this interview, Ghose chats about the benefits of a being a private business, partly owned by a co-operative of artisans, finding customers, including IKEA and FabIndia, her lack of business background, and lessons learned.

GIT: What goods do you sell? Why?

Ghose: We sell hand-crafted, hand-embroidered pillow covers, curtains, mats, and other home furnishings. Also, garments, mainly for women, for everyday work wear as well as for festive wear.

Customers in India appreciate the handicraft traditions of our country and are willing and able to pay a small premium for our products, compared to buying machine-made products. They can exchange products that do not meet their size or other expectations, within 15 days; or can return the product if damaged. Rangsutra bears the return shipping cost.

GIT: How are the goods advertised and sold?

Ghose: We currently do not have the funds for advertising and marketing campaigns. We promote our brand and products through Instagram and Facebook. We also take part in exhibitions and trade shows in India to try to attract new retail partners.

Currently, roughly 70% of our sales are home furnishing products which are made for Sweden’s IKEA. About a quarter of our sales go to FabIndia, Jaypore, Reliance, Swadesh, and other retailers in India. The retailers sell the goods under their label through their stores. We recently started an online sales channel and run a small store in Delhi. Such direct sales to consumers account for about 5% of our revenues.

GIT: How are the prices set? What portion goes to the artisans?

Ghose: We set the prices on a cost-plus basis. About a third of the price goes to paying the artisans, another third covers the cost of raw materials and Rangsutra’s operations; the rest goes towards improving our operations and buying handlooms and other infrastructure, reserve capital and profits.

We pay the artisans per piece of work, based on the time we estimate they take to weave or embroider or stitch. We also ensure that the wages paid are at least those stipulated by labor laws in the state - and more wherever possible.

We buy the goods and pay the artisans. We do not take goods on consignment and so the artisans do not face the fear of unsold goods. Many of the artisans, who own shares in Rangsutra, also get paid an annual dividend from the profits.

GIT: Where were the artisans selling their goods prior to Rangsutra?

Ghose: Some of them were selling through the URMUL Trust, a network of social organizations seeking to bring social and economic change in the lives of the people in the harsh, inhospitable desert regions of western Rajasthan. Others were selling to buyers working as brokers for stores in major Indian cities.

GIT: How were you able to convince the artisans to sell through Rangsutra?

Ghose: Prior to founding Rangsutra, I worked at URMUL for eight years. The trust was founded and funded by the URMUL Dairy, a co-operative of farmers. My late husband Sanjoy Ghose was the founding Secretary of the trust.

So, I knew many of the artisans. They are widely scattered over 200 kilometers, across villages in the Thar desert in the Bikaner, Jodhpur and Jaisalmer districts in the state of Rajasthan.

I was inspired that the artisans not only trusted me with getting them a fair price for their crafts, but that many of them also agreed to invest alongside me as co-founders of the company.

GIT: How much more do the artisans make per piece selling through you compared to earlier employers?

Ghose: According to our estimate, an artisan earns 50% more on each piece that we buy from them, compared to what they earned previously. And more importantly, once we accept an artisan as a supplier, they get year-round regular work, in comparison to the sporadic work they found earlier. Hence many artisans double their annual income – in some cases more than double – once they start selling to us.

GIT: How do you ensure quality? Do you return defective goods to the artisans?

Ghose: We conduct regular workshops to train the artisans to focus on quality along each step of the process. And we have craft managers in each village who closely monitor the work of the artisans to ensure our products have very low levels of defects.

GIT: What role do artisans play in the business?

Ghose: Rangsutra works very closely with the artisans – jointly designing and developing new products; purchasing all-natural cotton, wool and silk yarn and other materials in bulk at wholesale prices; and sending the yarn to handloom weavers, to weave the fabric. The fabric is then stitched - and for some products hand embroidered - by other groups. The weavers, tailors and embroiders are all part of our group of artisans.

We also train those without skills thereby enabling them to work as artisans.

GIT: How many have been trained so far? Is it free training? Do the trainees get a stipend?

Ghose: All our artisans have completed at least one training workshop – upgrading skills; or on product development; or that of a village craft manager, supervising a group of 20 or 30 artisans. The training ranges from three days for product development or a craft manager’s post, to three months for learning how to stitch garments on a sewing machine or weave.

There is a small stipend to cover travel costs and we also provide meals during the training. We believe that artisans should come voluntarily and with an intention to learn, and not just to get a stipend.

GIT: Is there a waiting list of villagers seeking training? If so, how do you select new artisans?

Ghose: Yes, given the high level of unemployment in rural India, there are many who would like to join our training programs in UP and Rajasthan. We hire them only if they show some basic level of hand skills and, more importantly, if we have sufficient work for them.

In Jammu & Kashmir, we have a contract to set up two clusters of artisans in areas that were devastated by floods in 2014. We are guiding artisans to invest and become co-owners of local producer companies which we helped set up. In the future, if we can get regular work for them, we may invite some of them to also become shareholders in Rangsutra.

GIT: When did you start Rangsutra? Why?

Ghose: I got the idea to set up Rangsutra while on a sabbatical, a Fulbright Fellowship on Conflict Resolution at the Eastern Mennonite University, Virginia, USA, in 2001-02.

In July 1997, my husband and colleague Sanjoy Ghose was abducted in Majuli, an island at the mouth of the Brahmaputra River in the state of Assam, India, by local members of the United Liberation Front of Assam (ULFA). At the time, members of the ultra-nationalist ULFA were physically attacking non-Assamese, mainly Bengalis, to try to drive them out of the state.

Earlier that year, about 30,000 men and women volunteers, led by Sanjoy, raised the height of the riverbank, for the length of about a mile, by piling stones and soil and planting shrubs to hold the soil together. The barrier reduced the flood erosion that year. In the process, it apparently deprived local contractors, ULFA and other politicians and bureaucrats from pocketing millions of Rupees that were allocated by the government for annual flood protection and relief measures.

We heard that the ULFA leaders were unhappy with our success. I later learned that Sanjoy was killed by his abductors.

Sumita Ghose, left, with late husband Sanjoy at his graduation from Oxford in 1986

In the years that followed, I still had hope of finding Sanjoy alive. I also tried to make sense of the injustice and violence faced by Sanjoy and our team. The Fulbright Fellowship gave me the opportunity to reflect on these issues.

While writing a paper on Organizations for the 21st Century, and inspired by a session on Appreciation Inquiry, I came up with a rough plan for Rangsutra: to address the problem of lack of work and livelihoods for rural artisans in India.

I was also inspired by the operations of AMUL, the milk co-operative set up by farmers in Gujarat state. One of its key values, which we also try to follow in our work, is respect for the producer and respect for the customer.

In 2003, upon my return to India, I spoke with several social workers and business operators, who were working with rural artisans, to figure out how I should proceed. In December 2004, we launched Rangsutra Craft Duniya Producer Company. However, Indian laws do not permit such companies to raise funds from private investors. So, in July 2006, we registered Rangsutra as a private company; then, as more artisans began investing to become part owners, we changed it into a Public Limited Company.

Today around 2,000 artisans are shareholders in Rangsutra. Our goal is to provide regular, year-round work to rural artisans in India so they and their families have a sustainable livelihood.

GIT: How much was the initial investment? Who invested?

Ghose: Initially, 1,000 artisans invested Rs. 1,000 each. I invested Rs One million, which I borrowed from friends. So, we started with Rs. Two million.

Later, FabIndia, through its subsidiary Artisans Micro Finance, invested a big amount and now own a roughly 30 percent share of Rangsutra. FabIndia, based in Delhi, was founded in 1960 by John Bissell, an American who was working in India with the Ford Foundation. It is India’s largest private vendor of natural, hand-made home furnishings, apparel, jewelry, personal care, and organic food products derived from traditional crafts and knowledge. It helps us with design, quality control, raw materials, and other inputs.

Another investor is Aavishkaar Capital, a Mumbai based Social Impact fund, which owns roughly 20%. So, the artisans and I own roughly half of Rangsutra and the two investors the other half.

GIT: Did you or anyone else on your team have any prior business experience?

Ghose: When we started, none of us had any business experience. We came from the non-profit sector, working on social and economic development programs and empowerment of rural communities. We had experience in rural communities dealing with handlooms, crafts, health, and education issues but not on the business aspects.

GIT: Was the lack of business experience a plus or a minus?

Ghose: Overall, it was a plus. Not having any business experience or MBA degrees, we focused not on profits but on building an efficient supply chain: providing design, measurements, and raw materials to the artisans; training the artisans; and getting finished goods from the artisans delivered to customers.

The minus was that initially we were too lenient about the quality and so ended with a large stock of unsold items rejected by customers.

GIT: To get sales contracts from IKEA and FabIndia, as well as attract major investors, you must be a good salesperson?

Ghose: I am inspired daily by the work and dedication of our artisans, especially the women. I also see that we are creating better lives for ourselves, our families, and communities by collaborating. Rangsutra is a unique hybrid of co-operative ownership and work combined with the dynamism of a business enterprise. I assume all this comes across to the owners and managers of potential clients during our meetings.

Also, clients like our focus on the environment. All our operational units and offices are solar powered, except in Delhi. Rangsutra buys all-natural cotton from sustainable sources. While we prefer natural dyes, we ensure that there are effluent treatment plants in place when chemicals are needed for the dyeing of yarn or fabric.

GIT: What is the toughest decision you had to make?

Ghose: To accept an order for the sake of providing work to our artisans, with Rangsutra being unable to cover operational costs, let alone make a profit. Sometimes we take on such contracts to enter a new product market or for a new, potentially major customer. But fortunately, in most other cases, we can refuse such orders.

GIT: Do you now seek business and operations advise from others? If so what is their background?

Ghose: Yes, we seek advice. For instance, from Siva Devireddy of Go–Coop on building an e-commerce platform and developing an in-house enterprise software. We also hire consultants, including Promantia and Frappe, to execute such work.

GIT: What lessons have you learned from setting up Rangsutra professionally and personally?

Ghose: Professionally I think the most important thing is to have a leadership team who work as peers and who bring a variety of experience and strengths to the organization. Also, that timely decision making is vital.

Hmmm… personally I have learned that there is truth in the saying: where there is a will there is a way. I have also learned the importance of being able to communicate well in order to build lasting relationships and partnerships with our artisans, suppliers, buyers, customers and, of course, with my colleagues.

GIT: If you were to start all over again, would you do anything differently?

Ghose: I cannot think of anything that I would do differently. Our journey has been very organic. So, we were rarely in a situation where we had to take a decision between two very opposing directions.

GIT: What are the long-term goals?

Ghose: To work with artisans in all the states of India. We are also seeking retail partners in the U.S., Canada, United Kingdom, the Middle East, and Australia, including to sell to Indian immigrants in those regions.