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Carpet exporters weave new plan to beat slump

Source: PTI
October 29, 2008 17:06 IST
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Global recession has forced Indian carpet exporters to change their business strategy, which now focuses on cutting prices using alternative quality, an exporters' body has said.

India's carpet exports declined to $50 million in September this year from $74 million a year ago. Almost 50 per cent of the country's exports go to the US, which is witnessing the worst economic crisis after the Great Depression of 1929.

"We are focusing on a new range of carpets which are cheaper and can be easily affordable by the common man," Carpet Export Promotion Council Chairman Ashok Jain told PTI.

Costs can be reduced by 'alternative quality' and producing different varieties, he said.

As the situation is worsening in the US, exporters are facing order cancellation, industry officials said.

"Carpet is a luxury product and not a necessity," Jain said.

Besides devising alternative products for the US market, the industry would focus on alternative markets as well.

"Russia, Latin America, South Africa and the Gulf are the upcoming markets. We would like to increase the exports in these countries," he said.

The exporters also find a high level of import duties in Brazil, Argentina and Chile as a trade deterrent.

In Argentina, import duty is 40 per cent plus 12 per cent value-added tax, while in Chile, the import duty is 44 per cent plus VAT.

The industry has managed to log in overall growth from $321 million in April-September, 2007-08, to $381 million in the first half of the current fiscal, While the September performance turned negative.

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