In the current globalized economy, there is a market for every product. Any organization country can identify the products that provide them a competitive advantage to engage themselves in export of that product. Handicrafts are one such category of items that have a huge potential for export, especially in the Indian Context. This is essentially because handicrafts cover a wide range of products. India is a nation with a strong cultural background - where diverse geographical areas come out with unique handicrafts of their own, which are very difficult to imitate, where technology cannot have a major role, and where the experience of the artisan is highly critical - all these factors provide a crucial competitive advantage. These factors also act as an entry barrier for the competitors. In spite of such competitive advantages, the Indian handicrafts export is just about 2 of the world market, as compared to 17 of China in the world trade. The present paper attempts to study the challenges in this regard and suggests focus areas for action. Keywords: Competitive Advantage, Handicrafts, Artisans, Entry Barriers