"The mela has become a sumptuous feast of colour, culture and cuisine... And is a manifestation of nation's pride," he said in his inaugural address.
The fair, upgraded as an international event this year with 20 foreign participants and over 800 artistes and artisans, celebrates Karnataka as the theme state.
"I remember the first fair in 1987 which started on a small land of roughly 3 acres and though this has become part of cultural calender of India, our handicrafts sector faces several challenges that are hampering its growth," he said.
Welcoming the foreign participants, Mukherjee said, "Countries which are linked to us with proximity and cultural roots and their own rich culture are here and when they go back, they will go back with a part of India. I wish them a comfortable stay here."
Laying stress on the "highly decentralised" handicraft sector Mukherjee said, the "sector faces challenges like middleman, infrastructure and material shortage, outdated technology and facilitation to transport, access to credit among others which should be addressed".
He also congratulated Karnataka for displaying its architectural heritage and rich culture, making the fair a very special occasion.
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"While entering the fair, I saw stone replicas of World Heritage Sites like Hampi, Belur Gate, Hoysala Gate, and Karnataka's colourful cuisine and artecrafts. It is a great celebration of our history and heritage." he said.
Haryana Chief Minister Bhupinder Singh Hooda informed that "the span of the fair has been expanded from 630 huts to 734 huts.
"This year we have also introduced e-ticketing facility and CCTV cameras and also made the fair disabled-friendly."
Earlier, artistes dressed in the traditional Kannada outfits welcomed Mukherjee. He was offered the Mysore Peta (headgear) and handed a sandalwood-made garland with a traditional aarti.
Eminent artist and Rajya Sabha MP B Jayashree who handed over the garland told PTI, "It's a matter of great honour for Karnataka and its culture and I am feeling very proud."
Foreign participants in the fair include African nations like Namibia and Rwanda, Kazakhstan, SAARC nations, Thailand and Peru among others.
The president's scheduled 11:20 am visit was delayed by about an hour due to foggy weather as he was supposed to fly in at the venue in his chopper but had to travel by road instead.