The paper couldnt have been a success without the support of our teacher Mrs. Shalini Dubey .

Without her guidance and support the analysis part would have been the most difficult part to do. Further our friends also helped us in difficult times. Suggesting us alternatives each time we faced any problem. We would not forget to thank all those people who provided us information for this project.

Carpet industry in India is an age-old, well established sector, employing over 2 million rural workers . Indian carpet is an export oriented item with above 90% of its production being exported. The industry has made rapid strides after 70s in the wake of overseas demand which stimulated carpet production and exports. As a result, exports which were worth 3 crore in 1947-48 and 11 crore in 1970-71 registered manifold increase and exceeded Rs 3,600 crore in 2006-07. Indian carpet has a special place particularly in the heart of the people 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 Indias exports.

Bhadohi Mirzapur (U.P) Agra (U.P) Jaipur (Rajasthan) Bikaner (Rajasthan) Panipat (Haryana) Kashmir belt. Amritsar

The carpets manufactured in India are mainly exported. There is a very market for carpets in India. This is mainly because of the purchasing po of local players. Also, there is no proper channel for marketing these pro In India leading to lack of awareness in the Indian market. Presently, Ind exports carpets worth over Rs. 2600 crores. The domestic market size about Rs. 200 crores. The handmade carpet industry in India has about share of the total Global demand of Carpets. In recent years the handma carpet sector has shown great improvement in relevant areas such as: competitiveness, capacities, delivery time and standardization. India, wi help of more than 2500 exporters-cum-manufacturer and two million artisans, is ready for a big leap.

Following chart shows the product wise market share in Indian exports.

Global imports of floor covering averaged US$9 billion during 1991-93 including US$2.2 billion worth of imports of woollen knotted carpets which shared nearly 26 percent of the global imports of floor covering. Although the world market for floor coverings is dominated by synthetic and tufted carpets, the world imports of Knotted carpets including carpet of wool seems to be sizeable and growing steadily.

Following table shows comparison of exports from India and other countries: (In USD Millions)
2008 WORLD Iran China India Pakistan Nepal Turkey
2028 547 365 378 126 203 101

2009
1926 520 346 341 122 122 97

2010
1977 647 249 351 217 140 98

2011
1760 537 227 330 211 116 98

 Coverage of Handmade Carpets and other floor coverings under Focus Product Scheme Restoration of Duty Drawback Rates as was effective before 1.9.2008 Income Tax Exemption under Section 80 HHC of Income Tax Act Exemption from VAT & Sales Tax as this item is almost 100% exported out of country Losses on Forward Contracts Mega Cluster for Carpets needs to be set up at Bhadohi and Srinagar

BASIS

RAMAN EXPORTS yes

CIE CASTLE

SHAH CARPETS yes

CHOUDHARY EXPORTS yes

KANU EXPORTS No , but foreign countries have higher purchasing power Private hotels , interior decoraters , big companies,i ndividual buyers yes

Low domestic demand

No , but foreign countries have higher purchasing power Individual buyers

Foreign sectors who demand for export

Private hotels , interior decoraters , big companies

Nothing particular, all type of buyers

Private hotels , interior decoraters , big companies,in dividual buyers

Competition yes with Iran , Pakistan etc.

no

yes

yes

Import of raw materials Problems in initial years

Yes(wool from New Zealand) Problems in contacting with buyers

No(all Indian Yes(wool raw from New material) Zealand) Problems in contacting with buyers No benefits Export quota system

Yes(wool from New Zealand)

Yes(wool from New Zealand)

Export quota Problems in system contacting with buyers Duty drawback , DGFT bonus to silk carpets, members of CEPC Decrease in global demand No benefits

Govt. 7.5% schemes and incentive benefits received from govt.

12% incentive against foreign currency

Effect of Decrease in recession global and inflation demand

Decrease in Decrease in no. of global tourists, demand resulting to decrese in internationa l trade

Decrease in global demand

Help expected from govt.

Govt. should control inflation

No help required as govt. helps on other levels Tie-ups with travelling agents as they bring customers to the showroom

Reduce the legal formalities

Promote the product

Promote the product

Marketing of product

Organize exhibitions and fairs

Participate in and organize fairs , exhibition , etc

Participate in exhibitions

Participate in exhibitions of Germany , Columbia , etc.

low domestic demand

40% 60%

yes
no

who demands for exports

8% 25% 25% 25% 17% private hotels individual buyers interior decoraters big companies all kinds of buyers

competition faced
20% yes 80% no

imports

20%

units that import 80% units that do not import

problems faced in initial years

problem of contacting with customers/buyer s exports quota system

40% 60%

incentives from government

40% 60% received not received

0%

effects of recession and inflation

faced 100% not faced

aid required from government

control inflation 20% 20% 20%

reduce legal formalities

promote product no aid required

40%

ways in which the units market their product

17%

organize exhibitions 33% tie-ups with travelling agents

33%
17%

participate in fairs and exhibitions participate in international exhibitions

THE PURCHASING POWER OF FOREIGN INDUSTRIES IS MORE THAN DOMESTIC INDUSTRIES (in case of carpet industry ).EVERY UNIT HAS ITS OWN POLICIES,CHANNEL ETC. FOR EXPORT,BUT EACH GET AFFECTED BY RECESSION , INFLATION , ETC. SO,IF GOVERNMENT TAKES SOME MEASURES TO CONTROL INFLATION ETC.,THIS WILL ADD A NEW DIMENSION IN INDIAN EXPORT AND INDIAN ECONOMIC SYSTEM.