Like Gupta, exporters in this labour-intensive Rs 4,000 crore cottage industry are eyeing markets in countries like Brazil, Turkey, Spain and Argentina.
Brazil, Turkey, Spain big on their horizons
MUMBAI: After a gloomy 8-9 months, Aditya Gupta has some reason to cheer. The 40-something partner of Sharda Exports, a Meerut-based carpet exports company, has found a way to counter slowing sales due to dollar depreciation - increase exports to the European Union and scout for new markets in South America, Australia and Africa. “That’s the only way we can hedge ourselves against the downturn in the US economy,” he says.
Like Gupta, exporters in this labour-intensive Rs 4,000 crore cottage industry are eyeing markets in countries like Brazil, Turkey, Spain and Argentina.
Till a little over a year ago, about 65% of the total carpet exports from India were to the US, says OP Garg, former chairman of the Carpet Export Promotion Council (CEPC). “US customers are in awe of Indian carpets which are handmade and fine in quality.”
The quality is decided on the basis of the number of knots per square inch. A carpet with 600 knots per square inch is finer and more popular with the foreign markets, than one with 100 knots per square inch. Indian carpets are mostly of the high-end variety and hence in great demand, especially in the US.
But with the rupee appreciating over 10.2% against the US dollar over the past 12 months, the industry had no option but to look at Middle East, South Africa, Australia, and South America.
Gupta says the rupee rise had eroded the profits of exporters by about 40-45% in the last 5-6 months.
Around 80% of the unorganised industry is concentrated in places like Meerut, Mirzapur, Varanasi, Bhadohi, Jaipur, and Srinagar. The 1,600 carpet units registered with the CEPC specialise in handmade carpets ranging from silk to wool; and employ about 3 million people.
“If exporters concentrate mainly on one particular market, then they have to face the brunt if there is a downturn in the economy of that country. And this is exactly what happened with the carpet exporters in India. Low margins from exports to the US meant low business and the closure of small carpet manufacturing units,” says Ashok Jain, chairman of CEPC.
“Exports to the US since the last 3-4 months have dropped to less than 49% of our total exports. The US is no longer our key focus market,” Jain says.
Garg says that despite US slowdown, the exports this fiscal have touched $850 million. “India is also the largest exporter of carpets, ahead of traditional exporters like Iran and China. And by going to more markets, we are targeting about $1 billion in exports by next fiscal,” he says. “Last year, through the Domotex trade fair in Germany, we noticed that several people from South America were showing a keen interest in Indian carpets,” he says.
g_priyanka@dnaindia.net
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}