Wooden handicrafts are specialized skills passed on from one generation to the next. The term 'wooden handicrafts' refers to a wide range of wooden items carrying utilitarian and artistic value that are made by hand, or with the use of simple tools. Indian wooden handicrafts reflect unmatched workmanship, fine designs, and subtle elegance. This makes India one of the chief exporters of wooden handicrafts in the world market.

According to the classification of Indian industries, a small scale industry is defined as an industry that is:

• Not registered under the Factory Act
  
• Investment in fixed assets does not exceed Rs.60 lakhs
  

Small scale industries are classified into two categories :

• Modern small industries like powerlooms etc.
  
• Traditional industries like handlooms, sericulture, khadi, coir, and handicrafts.
  

Wooden handicrafts fall in the category of small scale traditional industries.

Role In Indian Economy
The wooden handicrafts industry plays an important role in the Indian economy. This industry requires low capital investment and other resources. The wooden handicraft sector provides a high ratio of value addition, and has emerged as one of the major sources of foreign exchange earnings for India.

Indian wooden handicrafts are much sought after the world over, and form an important export commodity of India. Although India's handicraft exports show a consistent increase of sixteen per cent every year, its share in the international market is not more than two per cent.

The Indian wooden handicraft sector is the second largest employment provider (after agriculture). It employs about six million artisans. Women constitute a large section of the handicrafts industry, including people belonging to the weaker sections of society.