Hit by the dollar-debasement, the Indian handmade carpet industry is all set to de-risk business by embarking on a new mission: That of looking beyond the US market and expanding its footprint in Europe.
The carpet industry's strategy, which has been in tune with that of the Indian IT majors including Infosys Technologies, is geared at staving off threats that could scale down the country's exports in future.
The Indian Carpet Export Promotion Council, set up by the Union ministry of textiles, is in the process of revising its strategies and redrawing its road map with an eye on markets outside the US.
"Like the IT industry, the Indian handmade carpet industry is also passing through a rough phase because of the US slowdown. This 400-year-old industry, which has been scaling up on the export-value front from Rs 565.34 crore (Rs 5.65 billion) in 1990-91 to Rs 2,313.15 crore (Rs 23.13 billion) in 2000-01 to Rs 3,674.86 crore (Rs 36.75 billion) in 2006-07, witnessed a decline by 4.09 per cent in rupee terms during 2007-08," CEPC Vice Chairman (brand image for Indian carpets) Raja Sharma told Business Standard.
As more than half of the country's export earnings come from the US market, the sub-prime crisis and credit crunch have reduced the demand for Indian carpets last fiscal.
While exports of Indian woollen rugs, druggets, durries and cotton carpets fell by 7.07 per cent in 2007-08 as against Rs 2,234.63 crore (Rs 22.35 billion) the previous fiscal, that of handmade woollen tufted carpets fell by 0.38 per cent during the corresponding period.
"We don't see growth in exports, which is largely US-driven, happening this fiscal. The dollar is likely to go up only by the end of 2009 or by early 2010 and that is when the demand for Indian carpets is expected to skyrocket again in the US market," Sharma said adding that CEPC has started looking at expanding its geographical footprint in the European markets of Germany, Portugal, Spain, Sweden, Switzerland, Norway, the Netherlands, Denmark, Italy, France, Turkey and Russia.
CEPC is also eyeing Brazil and West Asia. To woo buyers in these markets, CEPC has decided to take up Rs 20-crore re-branding exercise and get aggressive on the marketing front.
"Unlike the Chinese machine-made carpets or the conventional Persian carpets from Iran, Indian handmade carpets present a mix of traditional and contemporary designs and speak of high workmanship. Indian carpets are of top quality as the number of knots per square inch is high and the carpets are available at a price range from $ 2 to $ 250 per sq ft," Sharma said.
"We will also tell the overseas buyers how the Indian handmade carpet industry, which employs three million people back home, is environment-friendly," he added.
CEPC is also in the process of changing its logo, giving a facelift to its website and doing away with its existing tagline 'Discovering the fascinating world of Indian carpets' for a new one that reads 'Weaving traditions with modernity'. The Council plans to conduct road-shows to popularise Indian carpets in the European countries.
"We want to display 50-60 year-old carpets that are in the possession of the royal families of Hyderabad and Jaipur during these shows," Sharma said. A coffee table book on Indian carpets will also be released. The re-branding exercise will take off in September-August this year.
