Hand-crafted carpet makers fall prey to machine-made units, seek subsidy

Indian hand-crafted carpet manufacturers have urged the government to link their production to Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) and subsidise labour costs to boost domestic demand and exports.

The demand comes on the back of increasing stiff competition from machine-made carpets.

“We are facing stiff competition from the machine-made carpets since their cost of production is lower. Since hand-crafted carpets remain costlier than the machine-made ones, the demand has shifted to the latter. Consequently, hand-crafted units are struggling for survival. Connecting hand-crafted carpet making with MNREGA and subsidising a part of labour cost will bring down overall production cost and help them remain afloat in competition,” said Sidh Nath Singh, Chairman, Carpet Export Promotion Council (CEPC), an export promotion body under the Ministry of Commerce.

Nearly 2.5 million workers are employed under carpet making, either in self-owned units or under micro, small and medium enterprises (MSMEs). Approximately 10 million labourers are also working on manufacturing designer carpets in thousands of machine-made units across the country. In total, both segments of carpet making have employed around 12.5 million skilled and unskilled workers across the country. Most of these workers hail from lower-income households for whom the trade provides an alternative to farming and other such occupations.

The labour cost works out to around 60 per cent of the product cost in hand crafted carpets as compared to 15-20 per cent in machine made products.

The carpet exports that clocked a meager Rs 4.42 crore in 1961-62 have jumped by leaps and bounds to touch a whopping Rs 12,500 crore in 2018-19. India is exporting carpets to more than 70 countries in the world including the US, China, the European Union, the Latin American and the Far East countries. The US leads in India’s carpet export with nearly 49 per cent share followed by the European Union with a distant 27 per cent.

“We are looking at 10 per cent compounded annual growth rate (CAGR) in our exports. We have now started exploring Indian markets also aggressively to boost our sales,” said Singh.