The last year proved to be a dismal one for the Indian carpet export sector with business volumes shrinking drastically due to contraction in international demand as a result of the global recession.
In addition, unfavourable tax policies and lack of adequate aid from the government made matters worse for small-scale units dominating the sector. The market scenario has not changed much this year, and exporters of luxury items like floor coverings are anticipating a challenging year ahead.
Exports on a downslide
The total exports from the carpet sector plunged by 23.15% in 2008-09, dropping from Rs 3524.73 crore registeredin the previous financial year to Rs 2,708.73 crore in 2008-09. In dollar terms, carpet exports fell by 31% to $600.06 million for 2008-09 as against $875.71 million recorded in 2007-08.
“Dwindling demand in key western markets such as the US and Europe and liquidity constraints are largely responsible for the fall in carpet exports last year. Besides, low-priced floor coverings supplied by neighbouring countries like China, Pakistan, and Nepal rendered Indian small-scale exporters uncompetitive in the global market, leading to erosion of their profit margins,” comments P Kumar, proprietor of Milan Carpets Industries, a small-sized carpet firm in Gwalior.
With the demand in key markets showing no signs of revival, the first few quarters of the current financial year are also expected to be sluggish for the domestic carpet export sector.
“The first two quarters will be challenging for small-scale exporters in the floor covering industry. A recovery in the export market is likely to take place only in the second half of the current financial year or even later depending on global economic cues. However, we have sought government aid and are taking initiatives to bail out small units from the ongoing crisis,” says Ashok Jain, Chairman of Carpet Export Promotion Council (CPEC).
With prospects for the carpet export sector appearing bleak, SMEs in the industry are advised to tread with caution and turn their attention to new B2b Marketplaces like Brazil, Russia, South Africa and Commonwealth of Independent States (CIS) to boost their flagging sales. The carpet exporting units must also look at ways for enhancing their competitiveness so that they can come back stronger when the market rebounds.
Source: http://www.bestsyndication.com/
In addition, unfavourable tax policies and lack of adequate aid from the government made matters worse for small-scale units dominating the sector. The market scenario has not changed much this year, and exporters of luxury items like floor coverings are anticipating a challenging year ahead.
Exports on a downslide
The total exports from the carpet sector plunged by 23.15% in 2008-09, dropping from Rs 3524.73 crore registeredin the previous financial year to Rs 2,708.73 crore in 2008-09. In dollar terms, carpet exports fell by 31% to $600.06 million for 2008-09 as against $875.71 million recorded in 2007-08.
“Dwindling demand in key western markets such as the US and Europe and liquidity constraints are largely responsible for the fall in carpet exports last year. Besides, low-priced floor coverings supplied by neighbouring countries like China, Pakistan, and Nepal rendered Indian small-scale exporters uncompetitive in the global market, leading to erosion of their profit margins,” comments P Kumar, proprietor of Milan Carpets Industries, a small-sized carpet firm in Gwalior.
With the demand in key markets showing no signs of revival, the first few quarters of the current financial year are also expected to be sluggish for the domestic carpet export sector.
“The first two quarters will be challenging for small-scale exporters in the floor covering industry. A recovery in the export market is likely to take place only in the second half of the current financial year or even later depending on global economic cues. However, we have sought government aid and are taking initiatives to bail out small units from the ongoing crisis,” says Ashok Jain, Chairman of Carpet Export Promotion Council (CPEC).
With prospects for the carpet export sector appearing bleak, SMEs in the industry are advised to tread with caution and turn their attention to new B2b Marketplaces like Brazil, Russia, South Africa and Commonwealth of Independent States (CIS) to boost their flagging sales. The carpet exporting units must also look at ways for enhancing their competitiveness so that they can come back stronger when the market rebounds.
Source: http://www.bestsyndication.com/
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