PAKISTAN has lost its share in global carpet trade as its export value declined by more than 50pc over the last decade, down from $278m in 2005-06 to $97.680m in 2015-16.
Quantity-wise also, the volume fell to 1,922,000 square metres in 2015-16 from 2,493,000 square metres a year ago, a drop of 22.90pc. Pakistani brands have lost to carpet exports from India in the international market.
A decade ago, India in comparison, had annual carpet exports of $300m which climbed to $8bn in 2015-16, say the carpet exporters.
Interestingly, the commerce ministry included machine-made carpets in the FTA concession list, while handmade carpets were excluded. There is no demand for machine-made carpets in the international market
After the 2008 global recession, India came up with an incentive laden package to boost carpet exports, while Pakistan’s industry suffered because of a lack of support from the government’s side, they continue.
A single piece of carpet requires six months to a year’s labour. Around 70pc of the work force of this sector comprises of women who make carpets at home.
According to the Pakistan Carpet Manufacturers and Exporters Association (PCMEA), the country’s 150,000-200,000 looms employ around 200,000-250,000 weavers.
Convener of the Development and Revival Committee on Carpets, Aslam Tahir, said exports of carpets are falling due to a lack of positive response from the government.
The government had announced in its last trade policy a framework that constituted an export council, which is yet to be set up. The proposal remains on paper. Mr Tahir said the establishment of the council will provide a platform to resolve the issues of the sector on an urgent basis.
The government recently held a high level meeting of exporters, but no representative from the carpet sector was invited to the meeting.
The ailing carpet sector is facing several challenges, from production to market access.
Carpet makers operate like a cottage industry. Often, these traditional workers lack proper training and the industry requires financing to complete the supply chain. There is only one training institute in Lahore. There is no facility of research and development either.
The largest buyers of Pakistan’s hand-knotted rugs are the US and Europe. However, an exporter said Pakistan’s export to these markets are on the decline. Pakistan is also losing the Turkish market — the second biggest importer — because of the recent imposition of 42.2pc additional customs duty on Pakistan’s hand knotted carpet.
The ministry of commerce has yet to take up the issue with the Turkish authorities. Also, the GSP plus scheme failed to provide a boost to carpet exports to the EU.
Interestingly, the commerce ministry included machine-made carpets in the FTA concession list, while handmade carpets were excluded from the list. There is no demand for machine-made carpets in the international market.
The association demanded that handmade carpets be included in the FTA under discussion with Turkey, and all the others existing ones, including China, Malaysia, Sri Lanka etc.
Pakistan has to make an extra effort in promoting exports by arranging trade fairs and exhibitions. Pakistan participates in only two exhibitions: Shanghai Domotex, China and Hanover Tex, Germany.
The local carpet industry says the participation in these exhibitions has now been made so costly that it is very difficult to exhibit their products.
In order to regain its lost market, exporters demand early release of refunds, concessions and credit financing.
Analysts believe Pakistan lacks the facilities to produce carpets as per the requirement of foreign buyers. There is a need to develop carpet clusters in the places where carpets are made. Exporters need to develop such clusters hosting a few hundreds of looms at a specified place.
Published in Dawn, Business & Finance weekly, October 17th, 2016