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THE MAGIC CARPET
Carpets have always been a revenue earner for India. From the beginning of this millennium, the industry seems to have been riding a successful wave. If the small exporter is given a little more assistance in terms of infrastructure and export benefits, the industry will do even better.
The carpet industry is one industry in India that is almost totally export-oriented. The cottage industry earns foreign exchange to the tune of 2,400 crore rupees per annum. But although India ranks number one in terms of volume of exports, it is only in third place in terms of value share, after Iran and China. India faces stiff competition from these two countries - China with respect to both quality and price, Iran as regards quality of the carpets. Nepal, which gets a tax waiver because of its poor nation status, can afford to price its carpets low, and so, it is, along with Pakistan and Turkey, emerging as a competitor.
The industry has been doing well in this decade, crossing the 2000 crore mark each year. Last year the export performance in terms of value was 2300 crore rupees. In the first five months of the current financial year exports have been to the tune of 870-odd crore rupees. The recent export order from Swedish retail giant IKEA has given an added fillip to the carpet industry. Ikea, which has a presence in 32 countries worldwide, has indicated that it will be buying carpets for its retail chain from India. The demand, for about four and a half million pieces, is massive. The multinational also plans to buy printed quilt covers and some metalware from India. With all this, the exports to Sweden are expected to increase by 30% a year for the next few years. The large importer has countries vying for custom and India's bagging this account and being placed eighth among 55 supplier countries is, literally, a big deal. Ikea is known for the social audit it conducts with its refusal to source products from countries that indulge in child and bonded labour. This new state of affairs will reflect favourably on India, especially since there was a taint of child labour law flouting against it in earlier years.
Market preferences
India is famous for its hand knotted carpets, which fetch very high prices as compared to woven and tufted ones. The technique still is largely influenced by the Persian style. Little wonder as Indians learnt the art of carpet weaving from the Persians brought in by Emperor Akbar in the sixteenth century. But lately the demand for hand knotted carpets has been declining across the world, the trend leaning slowly towards other handmade floor coverings like rugs, handloom and cotton dhurries, coir mats, hand woven carpets, hand tufted rugs and dhurries, chenille rugs, jutemats and coverings, hand knotted cotton and wool rugs, handwoven carpets, chain stitch rugs, ikat mattresses, jacquard rugs, etc. Despite this trend, India has managed to retain its position in terms of export value. All the same, it is also now looking more closely at these other floor coverings.
Trends in design
Carpets are fast becoming an addition to the list of things that are affected by fashion fluctuation. It is increasingly seen that they are as subject to fads and fashions as any sartorial accessory or home décor item. In colour choices, muted beiges and light natural tones are, although still popular, gradually being replaced by bright, vibrant colours. People are ready to have the same colours on their carpets and floor coverings as they have on the rest of their home textiles. Thus pinks, reds, bronzes, rusts, etc. are becoming quite popular. Also gaining popularity is a touch of metallic colours like gold, silver, or bronze being woven into the pattern for a rich and sumptuous look.
Even more than looks, comfort seems to be of prime consideration now. So carpets with a softer and more luxurious feel are the present rage. As regards texture, the low and high pile will never go out of fashion, of course, but slowly, shags, friezes, and loops are regaining favour.
Carpet manufacturers are also trying out different yarns in the manufacture of the carpets. Other than the traditional and highly appreciated wool and silk, softer yarns are now in the market.
USA is the single largest importer of carpets and floor coverings from India, buying up more than 47 percent of India's total carpet exports. As the US market is heavily influenced by fashion trends, awareness of this trend is useful. The next largest importer of Indian floor furnishings is Germany where the demand is for silk carpets. India enjoys 38% of the German market for fine carpets, i.e., carpets with high knottage - 350 knots and above per square inch. Iran is its competitor. The bulk of India's exports are in the low and medium knottage range, accounting for almost half of the volumes. In this range India faces competition from Nepal in its German market.
Problems facing carpet exporters
India clearly does not lack in terms of quality where its carpet exports are concerned but the fact remains that it leads only in export volumes, not in export value. One reason is lack of marketing skills of the small exporter. This results in low unit value realisation. It partly stems from the manufacturer's lack of resources to store stock, and the pressure he faces from the banks to pay interest on export credit.
The industry being rural-based is in need of good infrastructure facilities like telecommunication, networking, uninterrupted power supply, etc. This is lacking. Only Bhadohi has been declared a Special Economic Zone. Others like Mirzapur in Uttar Pradesh, and other manufacturing areas in Jammu and Kashmir, Rajasthan, Andhra Pradesh, Karnataka, etc. also need to come under this umbrella. Manufacturers also need to be kept aware of world market requirements, so that they ensure capability of meeting them. The issues facing the manufacturer and exporter of carpets need to be addressed by the government. For some reason they have not been given due importance although the industry generates a lot of foreign exchange and is also a source of employment to thousands.
What can be done
The small exporters can be assisted to participate in fairs and exhibitions abroad, in export promotion tours, etc. As publicity overseas requires a lot of money, this, as well as the cost of freight, can be subsidised.
Market research results can be made available to the small exporter. Besides helping him gauge export needs this can also spare him exploitation by the big importer. When the exporter does not know the true market, he tends to supply all his products to one supplier without really ascertaining that importer's capability of selling off the lot. Also, big importers come down heavily on them when they cannot find an alternate buyer. In such cases warehousing facilities would prove very beneficial. The expenses incurred in setting up one would soon be broken even given the loss it compensates.
Then, of course, a revision of tariff structures to favour the small exporter more would be very beneficial indeed.
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