Indian carpet industry sees a bright future outside India

The Indian carpet industry during the post-independence era has witnessed an export-led growth. Besides, export prospects of carpets basically depend on overseas demand and domestic supply potential. Employing over 2 million weavers, it is an old and well established decentralised sector, employing over 2 million weavers.

Despite being one of the largest producers and exporters of carpets across the globe, the unfortunate part is the demand for these handmade carpets and rugs have witnessed a downfall.

In spite of the booming handicrafts sector in India, the demand for carpets are pretty high in International markets as compared to our country, says Ashish Bansal of Heritage Export Co.

Further, the sector has made rapid strides during the post-independence era, especially during and after 70s in the wake of overseas demand which stimulated carpet production and exports.

As a consequence, exports which were worth around 3 crores in 1947-48 and 11 crores in 1970-71 registered a manifold increase and exceeded Rs 3,600 crores in 2006-07. But after 2007-08, there is a sharp decline in exports due to worldwide economic recession, as per a research report by Wool Research Association, Thane. 

Key Markets and Export destinations

In 2013-14, the total value of hand-made carpet exports was US$ 1,037 million. Indian handmade carpets are exported to over 100 nations and the US accounts for the largest share. For instance, around 40 per cent of the total carpet exports in 2011-12 were to the US.

Indian carpet has a special place particularly in the developed countries, which absorb 88-90% of Indian carpet exports. USA and Germany, the two largest and established markets for carpets together account for 76% of India's exports.

Besides, the other developed countries and only a few developing countries account for the rest of the part.

Furthermore, the industry is basically both export-oriented and labour intensive. Apart from generating foreign exchange, the industry provides employment to a large number of people.

Most of the carpet manufacturing in India takes place in the northern part of the country in the towns of Bhadohi, Agra, Jaipur, Srinagar and Danapur.

Expressing views on the prospects of the carpet industry, Aditya Wattal of Chinar International, said: “There is a huge demand for carpet and rugs in European countries. Besides, we also get orders for domestic market but still the comparison is very less as compared to the overseas demand."

Consumer preferences:

Over the years, there has been a change in consumer preferences in terms of design, material and price points.

“Nowadays, people prefer cotton rugs which are washable and are affordable,” said Adeel khan of New Age Rugs.

While, eCommerce and home furnishing industry are booming; the carpet industry in India is still dicey about its future prospects. However, the overseas demand for premium silk carpets are still there but certainly there is a dip in demand for these exclusives pieces in India, which has somewhere pushed the industry to move towards contemporary carpets, which are affordable and easy to maintain.

Besides, the demand for handmade carpets from India are battling it out with the machine produced carpets from other developed countries. We have tie-ups with big home furnishing and retail stores in AmerIca and we get maximum demands for colourful cotton, silk carpets and small size bright colour rugs, added Aditya Wattal.

‘As overseas consumers demand for colourful, printed rugs abroad, it makes it easy for us to produce exactly what they want. Also, we have rugs for Indian market that are prepared keeping in mind the Indian preferences and price sensitive market,’ says Damodar Gupta of Mittal Rugs.

To conclude, the carpet industry is presently going through a major change. Traditional markets are saturated while new markets are officering opportunities for growth. Modern designs and low end carpets like Hand-tufted carpets are attracting new customer base. However, the total sales in the carpet industry have been stagnant in terms of value. Hence, traditional model of carpet business is no longer relevant. There is no single kind of customer. The market can easily be segmented now. Product mapping with the consumer preferences is necessary for the future growth in the industry.