The Carpet Export Promotion Council is a Company set up under Companies Act and limited by guarantee and was registered at Kanpur in February, 1982.

The Objectives of the Council are:

• To provide commercial useful information and assistance to its members in developing new markets and increasing their exports;


• To offer professional advice to members in areas of technology upgradation, quality and design improvement standards and specification, product development, innovation, etc.;


• To attend the problems of the Members for redressal with appropriate authorities.


• To organise visits of delegation of its members abroad with a view to explore overseas market opportunities;


• To organise participation in trade fairs and buyer-seller meets in India and abroad;


• To promote interaction between the exporting community and the Government both at the Union and State levels;


• To build up a statistical data base on exports and imports of the country as well as other international trade statistics for dissemination to the members and submission to the govt. from time to time.


• To attend to Child Labour issues on monitoring & registration of looms and issuance of Kaleen Labels.


• To execute the marketing assignments of UNDP Carpet Project.


• To handle management of Welfare Projects under the Child Welfare Activities.


• To make projection for future development of the industry.

EXPORT PERFORMANCE OF CARPETS, RUGS, DRUGGETS INCLUDING NAMDHAS:

Figure Rupees in Crores (Figures US Dollar in Million)

Region Wise Analysis

On the basis of direction of exports following four regions are identified for analysis of export performance:

Europe (including Germany & Scandinavian Countries)

According to the statistics compiled for country wise exports from India in the year 2000-01, the share of our exports to Europe is 43.07% (Germany accounts for 24.53%, Scandinavian 4% and Rest of Europe 14.59%). Germany registered a decline of 8.3% in value term whereas the decline in Europe was only 2.9%. The reasons for decline in German Market is because of piling of stocks with German Importers. Germany is importing carpets of different quality. The share of India in terms of volume for carpets less than 350 knots is around 49% whereas it is having the share in value of only 33%. The German Market for medium and low knottage carpets (less than 350 knots) is dominated by Nepal and India. The Nepal is getting more price for similar products from India. The competitive edge is because of the status of poor country given to Nepal without payment of any duty. For Carpets above 350 knots in the German Market is being supplied mainly by Iran and India. India is having 38% share in volume whereas 21% in value. The Iran which is having 22% share in volume having 40% share in value.

The German Market for Silk Carpets is again dominated by India and China. China is having 52.3% share in volume and 42% share in value whereas India is having 33.7% share in volume but only 19% share in value. The analysis above in German Market clearly reveals that although we are having a strong grip in the market in various qualities of carpets but we are not having grip on unit value realisation. We are not getting the right price for our products because of our lack of marketing skill of the exporters. The under cutting by exporters and too much supply to one buyer without assessing the capacity of the buyer to sell is placing us in an disadvantageous position.

The Bhadohi and Mirzapur are the main supply area of carpets and floor coverings in wool to Germany and other European countries. Lack of resources to keep stock and pressure of banks for payment of interest on export credit is forcing them to sell on lower unit value realisation.

The Suggestions for arresting the declining trend and improving the unit value realisation are:

• Liberalized export credit both for pre-shipment and post-shipment to be made available to the manufacturers/exporters on concessional rate of interest. Govt. may also like to write to RBJ not to insist for repatriation of export proceeds within 180 days and grant extension upto 360 days in hard pressed cases.


• The rate of interest on Export Credit is very high as compared to China where the interest rate for export is only 3% to 4% and repayment is relaxable upto 12 Years.


• The Indian Exporters should also look for alternate buyer and offer products in new design stressing more on quality.


• Stress on use of Kaleen Label for restoring the confidence of the importers.


• A warehouse facility to be provided to the exporters for temporary storing their consignments on refusal of payment by the buyers to avoid auctioning by the customs.


• Extensive participation in fairs & exhibition to be suggested for increasing demands particularly in Scandinavian Countries.


• Regular publicity for image building

USA & Canada

According to the statistics compiled for country wise exports from India in the year 2000-01, the share of our exports to USA & Canada is 45.33% (USA accounts for 43.55% whereas Canada accounts for only 1.78%). There is an increase of 19.03% in exports to USA & Canada during the year 2000-01 compared with the figures of 1999- 2000. USA consumes around 28% of the world import of carpets & floor coverings. The major portion of import of carpets and floor coverings into USA is of knotted carpets accounting for 38% whereas other woven carpets accounts for 29.8% and tufted accounts for 27%. There is an overall increase of 19.73% in import of carpets and floor coverings into the USA. The major competitor of India in carpets & floor coverings is China followed by Pakistan, Nepal and Turkey. The imports of carpets and floor coverings is largely controlled by a group of importers based in New York. The market in the USA for carpets and floor coverings is unevenly distributed. Most of the parts in the USA are almost nonexistence markets for carpets and floor coverings. The American consumers are choose about colours and fashion dominate the sale of carpets and floor coverings into the USA. The position of Indian Carpets till 2000 was very comfortable because of embargo on import of carpets from Iran which has lifted since February, 2000.

Canada is relatively small market for carpets and floor coverings. Iran is dominating the market because of embargo in USA. India is No. 2 but the market has not grown much over the last 3 years.

Suggestion for promoting the exports and increasing share:

• Although India has a sizable portion of US Market but still there is tremendous scope for expansion of the market by exposing the products to the consumers.
• Since participation in fairs & exhibition by the suppliers in US Market is not relished by the importers, it is proposed that specialized Indian Exhibition either directly or in collaboration with Importers or Departmental Stores be arranged extensively especially in South of America around Dallas and Houston and West of USA i.e. San Francisco and Seattle.
• Extensive publicity is required for generating consumer awareness.


• Ware House facility for temporary storing of goods by individual or by group of exporters.

South East Asian Countries (including Japan and Australia)

The South East Asian Region because of climatic conditions and economy have not developed for carpets and floor coverings. Although Japan has grown small market for carpets and floor coverings but Indian exporters have not been able to penetrate much in this market because of dominance of China and Pakistan. These countries account for only 4.2 1% of the total exports of carpets and floor coverings from India. The main competitors in these markets are China and Pakistan.

The reasons for our exporters not penetrating much in the markets are:

1. Distant location and edge of competitors because of proximity in the markets;


2. Slow moving of economy in the region;


3. Climatic conditions.

Suggestions:

• Freight subsidy to be provided for exports to South East Asian Countries;


• Storage facility to be provided for exporters to sell product to alternate buyers in case of refusal;


• Special emphasis to be made for promotion of carpets & floor coverings in the Region.

Rest of the World including LAC

The share of exports of Indian Carpets and Floor coverings to rest of the world including LAC accounts for only 7.3 9% which clearly shows that these markets remained un-explored.

Since Government of India is paying special emphasis for promotion of exports to LAC and Carpets & Floor coverings from India have huge potential for expansion the following suggestions are being made:

• To Lower down the Tariff Structure be taken up in Bilateral Trade Agreement;


• Fashion Oriented and less expensive products to be promoted i.e., Woven Durries, Chain Stitched Rugs, Woven Carpets, Tufted Carpets & Art Silk Carpets.

Conclusion

The Indian Carpet Industry has potential for expansion since adequate skilled manpower & raw-material is available, requirement for capital is almost negligible, Indian Products are acceptable all over the World and are at par on quality and competitive in prices. We have tremendous flexibility and adaptability. We have large range of products to offer. India can supply carpets & floor coverings strictly in accordance with the requirement of consumers.

The only weakness is marketing and fore-sightedness of the exporters besides resources. Generally the exporters are small in comparison with our competitors thus having limited resources. Indian exporters have so far been making carpets as per orders of Buyers and have not paid much attention or priority on keeping inventory for spot sales. The trend in buying has undergone a radical change switching over to stock buying rather than placing orders.