PRESENTATIONON

CARPET SECTORSubmitted by:Apeksha SharmaAnjali JeewaniKanika SinglaKusha GuptaNeha SoodSupra Singh

INDIAN CARPET

• Indian Carpets are renowned the world over for their exquisite designs, subtle elegance, attractive colours and workmanship.

• The magnificence of Indian carpet weaving and the intricate patterns that have emerged from it have substantially increased India's carpet exports and placed it prominently in the international carpet map.

• Carpet weaving was brought to India by the great Mughal Emperor Akbar in the 16th century.

• Some of the most exclusive carpets were created during the Mughal reign, each carpet unlike the other but infused with a common magic of colours and design.

• The carpet weaver has gradually grown as an artist, a creator who could weave poetry in to his designs and every knot he tied, giving a touch of aesthetic beauty to his creations.

• A carpet weaver's skills are his own and the designs he evolves are from his mind to be translated in to beautiful form with the help of wool and silk.

TYPES OF CARPETS

• Hand Knotted Woollen Carpets : Bhadohi, Mirzapur, Khamaria, Ghosia,

Varanasi & Agra; Amritsar & Pathankot; Jaipur

• Tufted Woollen Carpets : Panipat

• Gabbe Woollen Carpets: Bhadohi- Mirzapur region( uttar pradesh)

• Handmade Woollen Dhurries: Bhadohi, Mirzapur, Agra, Jaipur, Panipat and Bangalore

• Pure Silk Carpets: Kashmir

• Staple/Synthetic Carpets: Srinagar(Jammu & Kashmir), Agra and Gwalior

• Chain stitch Rugs: Kashmir

PRODUCTION CENTERS• Uttar Pradesh: Varanasi, Bhadohi, Gopiganj, Khamaria, Ghosia,

Madhosingh, Mirzapur, Agra, Shahjahanpur. • Jammu & Kashmir: Srinagar, Baramulla, Anantnag, Jammu, Leh.• Rajasthan: Jaipur, Bikaner, Tonk.• Punjab: Amritsar.• Haryana: Panipat. • Madhya Pradesh: Gwalior.• Bihar: Obra, Danapur, Madhubani• Himachal Pradesh: Dharmshala.• West Bengal: Dargeeling.• Andhra Pradesh: Elluru and Warangal• Karnataka: Bangalore.• Pondicherry: Pondicherry

CARPET INDUSTRY IN KASHMIR• Kashmir is famous for its fine quality hand knotted carpets, which are

expensive and considered as lifelong investment.• Namdhas: The namdha is a specialty of Kashmir; these carpets are

embroidered with woollen thread that completely covers the base of Hessian.

CARPET INDUSTRY IN RAJASTHAN• Rajasthan is also known for making namdha that is appliquéd, printed or

embroidered. • Jaipur is the major manufacturing center in Rajasthan that share a

substantial part (15%) of total carpet manufacturing from India.

CARPET INDUSTRY IN ANDHRA PRADESH

• Prominent centers: Masulipatnam, Elluru and Warangal in Andhra Pradesh.

• In Masulipatnam, patterns used are named after the fruits and flowers like babul, guava, ambarcha etc.

• The carpets of Elluru and Warangal are the pride of Andhra Pradesh.CARPET INDUSTRY IN HIMACHAL PRADESH

• Carpets in Himachal have magnificent designs and durable texture.

DOMESTIC INDUSTRY

• Today, the carpets manufactured in India are mainly exported.• However only a small market for these carpets does exist in India.• As of now, over 509 million US $ worth of Indian carpets are

exported. The domestic market size is about Rs. 39.16 million US$.• The industry provides employment opportunities to more than

100,000 workers at their doorsteps who belong to the economically backward sections

• Today, it has more than 3 million artisans belonging to the rural areas of the country.

• The scope for capital investment is very less. • Almost up to 40% of the manufacturing cost goes in to the payment

of wages which is very rare in any other industry.• In order to give a boost to the industry, the United Nations

Development Programme set up a project here.

CARPET EXPORT PROMOTION COUNCIL• Founded in 1982, the CEPC was established by the

Ministry of Textiles of the government of India to promote the export of hand-knotted rugs and all other types and styles of floor coverings from India.

• For overseas buyers/importers, the CEPC acts as a bridge to help create meaningful business relationships with Indian exporters.

• The CEPC also advises the government about the proper strategies for carpet promotion, and its officials regularly visit the Council’s overseas members to explore possibilities for new markets and joint marketing opportunities.

INITIATIVES BY THE CARPET EXPORT PROMOTION COUNCIL

• The Carpet Export Promotion Council of India conducts 2 annual events under the aegis of Department of Handicrafts, Ministry of Textiles, and Government of India. These events enable Buyers and Sellers of Indian Carpets and Floor Coverings to come together.

• Event 1: Indian Carpet Expo in Delhi during the months of February/March every year.

The Carpet Export Promotion Council is organizing the 24th India Carpet Expo, from 17th to 20th February, 2012 in Hall No. 14, Pragati Maidan, New Delhi.

• Event 2: Indian Carpet Expo in Varanasi during the month of October every year.

LIST OF ACTIVITIES OF THE COUNCIL DURING 2011-12

Sl. No. Activity Date/Period1. Buyer Seller Meet in Domotex Middle East

Dubai

12-14 September 2011

2. ATF Show in Cape Town (South Africa) 16-18 November 2011

3. Combined Indian Textile & Clothing Exhibition in Kuala Lumpur, Malaysia 22-24 November 2011

4. Domotex Intl. Trade Fair in Hannover (Germany 14-17 January 2012

5. Intl. Furniture Fair/DECO ASIA in Singapore 9-12 March 20126. Buyer Seller Meet in Domotex Asia China

Floor in Shanghai (China) 27-29 March 20127. Display in Intl. Departmental Store in Tianjin,

Chin March 20128. India Carpet Expo in Varanasi 15-18 October, 20119. India Carpet Expo in Pragati Maidan, New

Delhi March 2012

• The Council is providing complimentary package to selected overseas carpet buyers as under:

• Two nights hotel accommodation to the 'Selected Buyers' for which last date for registration by buyers is 31st January, 2012.

• Air fare reimbursement to selected buyers under Special Focus for buyers from LAC, China, Iran and all African Countries –-

• For Buyers from LAC - Upto US $ 1500 or actual whichever is less.

• For Buyers from China, Iran and all African Countries - Upto US $ 800 or actual which ever is less.

SWOT ANALYSISSTRENGTHS

Artistic skills: • Major carpet centers have built huge network of artistic weavers.• Employment for millions of people directly and indirectly. Costs: • The labour costs in India are comparatively low. • Total cost of producing a carpet is low compared to countries like

Turkey, Iran without compromising on quality.Innovations:• Innovation is one of the major criteria for selling carpets. Flexibility: • Indian carpet industry can manufacture all kinds of carpets.• Carpets of any size can be manufactured in hand knotted

categories.

WEAKNESSES

Unorganized: • Indian carpet industry is highly unorganized.• A lot of activities are duplicated.• Hence, it increases the cost of production. • Also, it increases the time of delivery of carpets.

Marketing Channels: • Lack of proper marketing channels. • Manufacturers are dependent upon the buying agents. Infrastructure: • Very poor infrastructure.• Manufacturers do not have showrooms in the cities to showcase

their creations.

Professional Approach:• Lack professional approach for doing the business. • Majority of players do not respect delivery time and quality issues.

Internal Competition:• Tremendous competition among players on price front.• Willing to offer very low prices.

Intellectual Property Rights: • Many players in the industry copy designs from each others.• This demoralizes players from designing innovative products.

OPPORTUNITIES• Home furnishing market for low end carpets.• Attract more youth market.• Differentiation with China: Many players think that India

provides better option and flexibility. This kind feeling can further be tapped.

• Demand growth through cost cutting.• Image enhancement through organized operations.• The companies like IKEA, Wal-Mart, etc can offer larger

market.• Designing skills of India are being acknowledged at global

level and can be used as a marketing tool.• Providing stocking and warehousing services to various

players.

THREATS• If not handled properly, current rebound in

the industry may not be sustainable.• Unhealthy competition in the industry kills

each other.• Indian Carpet industry has not completely got

rid off of issues like Child labour.

EXPORT STATISTICSEXPORTS OF CARPETS, RUGS, DRUGGETS INCLUDING NAMDHAS

YEAR VALUE OF EXPORTSUS$ Million

2007-08 690.32

2008-09 530.49

2009-10 490.66

2010-11 549.99

COUNTRY-WISE EXPORT DATA FROM 2003-04 TO 2008-09 (PROV.) U.S. $ MILLION

SNO COUNTRY 2007-2008 2008-20091 Australia 15.54 15.22 Canada 14.74 8.923 France 14.11 10.824 Germany 160.67 135.855 Italy 26.32 5.656 Japan 14.86 10.87 Switzerland 2.27 5.958 U.S.A. 414.62 301.129 U.K. 45.48 24.85

10 Others 85.57 47.2Total 875.71 600.06

(Source: NIC, Ministry of Commerce Web-Site)

STATEMENT OF ESTIMATED EXPORTS FOR THE MONTH OF APRIL- MARCH 2008-09 IN COMPARISON WITH THE

APRIL- MARCH, 2007-08 (PRODUCT WISE)

Product Value Of Export (Value in US $ million)

2007-08 @40.2513

2008-09 @45.1410

% increase / decrease

Hand made woollen Carpet, Rugs, Daries etc. including cotton carpet

excluding handmade woollen tufted carpet

515.9 321.5 -37.68%

Handmade woollen tufted carpet 287.4 217.81 -24.21%Handmade silk carpet 55.12 46.65 -15.37%

Handmade staple/synthetic carpet 17.29 14.1 -18.45%Total 875.71 600.06 -31.48%

MAJOR EXPORT DESTINATIONS

Country 2006-07 2007-08 2008-09

U.S.A. 403.04 414.62 301.12

Germany 153.52 160.67 135.85

U.K. 41.61 45.48 24.85

Others 93.19 85.57 47.2

(FIGURES IN US$ MILLION)* SOURCE: CEPC

INTERNATIONAL TRENDS

• Europe (including Germany & Scandinavian Countries) : the share of our exports to Europe is 43.07%

• USA & Canada : USA is the largest export market. The share of our exports to USA & Canada is 45.33%

• South East Asian Countries (including Japan and Australia): Japan has grown small market for carpets.

• 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%.

• Present & Future Growth Drivers of the Industry:• Low – End Carpets, Modern Designs, New Markets

MAJOR COMPETITORS IN THE GLOBAL MARKET

1998 1999 2000 2001

Iran 547 520 647 537

India 378 341 351 330

China 365 346 249 227

Pakistan 126 122 217 211

Nepal 203 122 140 116

Turkey 101 97 98 98

In USD MillionsSOURCE: EXPORT IMPORT DATA BANK,EXPORT PROMOTION COUNCIL

Provisions in India’s Foreign Trade Policy

Some of the highlights of the new policy announced on 27th August, 2009 are given below for information of the Members.

• The incentive available under Focus Market Scheme (FMS) has been raised from 2.5% to 3%.

-To offset the high freight cost and other disabilities to select international markets with a view to enhance export competitiveness.

• The incentive available under Focus Product Scheme (FPS) has been raised from 1.25% to 2%.

-To incentivize export of such products, having high employment intensity in rural and semi urban areas.

-To offset the inherent infrastructure inefficiencies and other associated costs involved in marketing of these products

• ASIDE(Assistance to States for Development of Export Infrastructure and Allied Activities)

• Financial Assistance is being given by the Central and State Government for infrastructural development for exports

• Creation of new Export Promotion Industrial Parks/Zones (SEZs/AgriBusiness Zones) and augmenting facilities in the existing ones.

• Setting up of electronics and other related infrastructure in export conclave.

• Equity participation in infrastructure projects including the setting up of SEZs.

• Development of complementary infrastructure such as, roads connecting the production centres with the ports, setting up of Inland Container Depots and Container Freight Stations.

• MDA/MAI• MDA(market development assistance)-market incentive assistance and financial aid

given to exporters for participating in exhibition.• MAI(market access initiative)-Financial assitance are being given for market

feasibility study, trade fairs,warehousing etc• Trade Fairs and Buyer Seller meets abroad or in India, and Export

promotions seminars.• Market studies/surveys,• Setting up of showroom / warehouse,• Participation in international trade fairs,• Displays in International departmental stores,• Publicity campaigns,• Brand promotion,• Reimbursementof registration charges for• pharmaceuticals and expenses for carrying out• clinical trials etc., in fulfillment of statutory• requirements in the buyer country,• Testing charges for engineering products abroad.• Assistance for contesting AntiDumping• litigations etc.

• STATUS HOLDERS• The Government recognized ‘Status Holders’

contribute approx. 60% of India’s goods exports.

• Given double weightage to merchants as well as manufacturer exporters

• To incentivise and encourage Technological upgradation of export production, additional duty credit scrip @ 1% of the FOB value of past export shall be granted for specified product

• Exporters in Small Scale Industry (SSI) / Tiny Sector Cottage Sector, Units registered with KVICs / KVIBs, Units located in North Eastern States, Sikkim and Jammu & Kashmir, Units exporting Hand knotted silk carpets.

• A common simplified application form has been introduced for taking benefits under FPS, FMS, MLFPS and VKGUY.

• To simplify claims under FPS, requirement of ‘Handloom Mark’ for availing benefits under FPS has been removed.

• Town of Export Excellence• To maximize the potential of the industrial

cluster who contribute more than 750 crs and enabling them to move higher in the value chain and tap new markets

• Jaipur, Srinagar and anantnag.

QUALITY STANDARD MARKS

QUALITY STANDARDS

The problem of child labour has long been present in the carpet industry in India. Both government and the Non government organizations have taken many initiatives to curb this problem. In this venture, both these institutions are also supported by the international agencies also. Government on its front has passed many legislations like Child Labour (Prohibition and Regulation) Act, 1986, the formulation of a National Policy on Child Labour in 1987 etc. The initiatives of government and NGO's are now supplemented by welfare and rehabilitation activities undertaken by the social labelling programmes. There are four types of Labelling assigned to carpets :

• RUGMARK• Kaleen• Care and Fair• STEP

RUGMARK

• RUGMARK label, was the first Labelling programmes introduced in India in 1994.• It is Registered under Companies Registration Act.• Manufacturer who wish to obtain license of RUGMARK has to submit a complete list

of looms and/or sources of procuring their carpets to RUGMARK foundation.

KALEEN

• Kaleen is a Labelling programmes initiated by the government.• It is promoted by the Carpet Export Promotion Council (CEPC), under the ministry of

textiles. • CEPC also takes measures to eradicate the child labour and see the welfare of the

weaver in the carpet industry. • CEPC introduced the Kaleen label in 1995 for carpets to be exported as a hallmark of

commitment towards the eradication of child labour.• Exporters of the carpet have to obtain license from CEPC. It is mandatory.• The annual membership fee is determined by their annual turnover.

STEP

• STEP is a labelling system started by members of the carpet trade in Switzerland in October 1995.

• It is basically a company certification programmes, that aim to link Indian exporters and Swiss importers and consumers of carpets.

• STEP India office was established in May 1996.• STEP was established with the objective of providing socially just

conditions in carpet production and trade, progressive elimination of child labour and standard working and health conditions for the carpet workers.

CARE AND FAIR

• Care and Fair, just like STEP is a company certification programme and not a product labelling initiative.

• Care and Fair does not monitor the carpet production but relies on moral commitment of its members.