The document discusses the Kashmir carpet industry in India. It notes that while once the industry captured hearts worldwide for intricate designs and durability, it is now losing its essence due to government trends, weakening currency, and increased foreign competition. The top competitors are Nepal, China, Afghanistan, and Pakistan. The industry faces issues like child labor, an unorganized market, storage problems, and changing trends. The document proposes solutions like auctioning the industry, improving worker conditions, subsidizing transportation and raw materials, promoting carpets online and offline.

1. KASHMIR CARPET
INDUSTRY
Ridhima Batra
B 35
2014-2016

2. Introduction
 The Kashmiri carpet is a product that has capture the
hearts of people the world over, mainly on account of their
intricate designs and their durability. Kashmiri carpets are
traditionally made either from silk or from wool. The base of
these carpets is made either from cotton or silk.
 But it is losing its essence lately , due to various govt. and
changing market trends both in terms of the competitors
coming up and decreasing value of rupee which inturn
affecting the purchasing power of the weavers in the global
market .
 India: $148 M; -9%
 US market accounts for >50% of exports.
 Along with China, India benefited from the US embargo on
Iranian carpets, but has been losing market-share to Iran
since 2000

3. Value chain for the carpet
industry
Transportation
Knowledge and Innovation
Financing

4. Bottlenecks in the Carpet
IndustryCompetitions:
Nepal: $100 M; 21%
• Industry developed by Tibetan refugees in the 1950s.
• Has been enjoying strong growth in the US market over past 10 years, increasing over
250% since 1995.
• Recent decline attributed to market reaction to use of child labor and poor quality
production
Pakistan: $246 M; 8%
•Approximately 60% of production previously undertaken by Afghan refugees, much of
which has repatriated.
• Large portion of Pakistan’s exports now produced in Afghanistan.
Afghanistan: $149 M; 10%
• 95% of production exported to Pakistan where it is finished and re-exported as
Pakistani.
China: $121 M; -12%
• Reputation for good quality, well priced carpets.
• China is dependant on the US market for 70% of its exports, though sales have been
stagnant since 1995.

5. Other Problems
 Poor production systems
 Decreasing number of skilled labor:
 Child labor : The Kashmir carpet industry employs a large labor force
including both direct and indirect. This includes a lot of backend labor which is
below 18 years of age. The industry has been facing a lot of heat from the
Human Rights associations and NGO’s due to this issue of child labor and
the inadequate working environment.
 Unorganized market: The reasons can be attributed to weak
purchasing power of local players and lack of awareness in the Indian market
due to improper marketing channels.
 Storage of raw materials
 Decentralized markets
 Declining value of Rupee: It also decreases the purchasing
power of raw materials
 Storage of raw materials
 Changing trends :Styles and colors are also changing more rapidly.
While niches for traditional carpets are affected less by this, the
opportunities for growth and volume may lie in serving ‘trendy’ – but more
volatile – markets.

6. International Carpet Market
 The hand-knotted carpet market is highly competitive with the top 5 buying
countries accounting for over 70% of total global demand.
 After years of solid growth, the US market – the largest – leveled out over the past
few years, contributing to greater competition particularly among Iran, Afgan and
China. However, it looks to be rebounding healthily.
 Efficient factory production in Iran, Afgan and China allows them to cost-effectively
manufacture handmade carpets of high quality (particularly in the case of China).
India will have to target different niches from these countries, as it unlikely to be
able to compete with them on cost.
 High competition in the handmade sector and new competition from good quality
machine-made carpets are leading to a downward pressure on prices and
decreasing value for carpet producing countries.
 Frequent changes in decorating trends require accurate market knowledge and
responsive production systems, which Afghan producers currently lack.

7. Indian Export of Carpets
0
50
100
150
200
250
300
350
400
450
NEPAL CHINA AFGANISTAN PAKISTAN IRAN
Series1

8. Plan for Improvement
 GOVT. AUTIONS:
 The carpet industry must be auctioned in the open market so
that it can be more organized production systems
 With this the employee conditions will be improved as
workers will come under certain laws, with which they will be
protected.
 Law enforcement will be checked
 Fixed wages to the workers more promotional and marketing
procedures will be adopted by the company

9. Advertisement:
Advertisement of the Indian Art must
be done globally
The issue of carpets is the issue of
culture so this topic must be a part
conferences across the nations .
Subsidy :
Govt. must provide some subsidies to
the transportation of the raw material
also reduce the tax levied on the raw
material

10. Marketing Carpets
 Online Market :
As we know e commerce is increasing
day by day and all commodities are
online today so carpets also must be
sold online
 Promotion :
Both digital and offline marketing must
be wncouraged