'High input costs hindering carpet exporters' global competitiveness'

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Namrata Kath Hazarika | 10 Jul, 2012
Indian carpet exporters are increasingly losing their competitive edge to Chinese and Pakistani traders due to spike in cost of production, said Carpet Export Promotion Council chairman S N Singh.

"The markets we are tapping at the moment are also accessed by countries such as Pakistan, Iran, China, etc. The challenge we are facing in India is with the cost of production. Production costs in all these countries are lower than India," he told SME Times

"Also high labour costs, shortage of workers, high diesel and petrol prices, increasing interest rates, etc., are major hurdles for Indian carpet exporters to compete with its global competitors," he added.

Faced by slowdown in key export markets, Indian carpet exporters are tapping new destinations such as China, Russia, Latin America, and Australia as these markets provide opportunities, the CEPC chief said.

"China has a strong buying power at the moment, which is a reason we are exploring the market. Russia is also providing good opportunity for Indian carpet exports. Australia is demanding low-price carpets. This is an opportunity for India to understand new markets and explore them as the US and EU markets are facing a slowdown," he said.

India's main markets for carpet exports are Spain, Greece, Italy, France, Belgium, Holland, Germany, and America.

Commenting on effects of recent devaluation of the rupee, Singh said the carpet exporters have not benefited much as buyers are demanding huge discounts. "Carpet exports have performed well when the rupee was at Rs. 50-52 a dollar. We have been earning profits due to depreciation of rupee in our earlier orders. But the present devaluation of rupee, we are not earning much as the buyers want to take advantage of rupee fall," he said.

According to the provisional figures available with the Council, during April-June this year, carpet exports have registered a growth of 17.91 percent to USD 204.26 million as compared to the same period during the corresponding year.

In June 2012, carpet exports have registered a moderate growth of 0.27 percent to USD 60.15 million as compared same period last year.