Panipat carpet industry battles competition from Turkey

VIJAY C ROY

Tribune News Service

Chandigarh, June 26

The Turkish carpet industry is giving a tough time to both India and China. Facing severe competition from Turkish carpet imports, Panipat’s famous handmade carpet Industry has approached the Centre for protection.

The carpet industry says that the disadvantage has increased after the implementation of the Goods & Services Tax (GST). “GST and reduction in duty drawback rates have raised the cost of Indian products and made them uncompetitive in overseas markets,” Panipat-based manufacturer Nirmal International Managing Director Sunil Jain said. 

Panipat is a major cluster of carpet manufacturers in Haryana with about 200 units in the micro, small and medium enterprises. Haryana is one of the four major carpet producing belts. Uttar Pradesh, Rajasthan and Jammu and Kashmir and also leading handmade carpet manufacturing states. More than 95 per cent of the carpets produced in India are exported to European countries and the US market.  

Haryana alone exports carpets worth over Rs 3,000 crore. Besides exports, it supplies carpets worth Rs 1,000 crore in the domestic market. The Panipat cluster gives direct employment to over 10,000 people.

“Carpets manufactured in Panipat are losing their competitiveness in the international market as well as domestic market due to Turkey. They have made significant advancement in terms of technology, design and colours; leaving India’s labour-intensive industry far behind,”said Gayatri Textiles’ Partner Anil Mittal.

The machine-made carpets imported from Turkey are not only having unique design and colour combinations but they are also cheaper by 25-50 per cent, said Mittal.

The mechanisation in this Industry is still a distant dream for the exports as it comes with a high cost. India’s MSME sector is not in a position to make one-time capital investments as labour is still cheaper compared to machines. Industry experts say that an automated machine cost around Rs 10 crore for just one unit.

“There is no denying fact that carpets from Turkey is in demand in India as well as overseas mainly due to attractive rates and design,” Suruchi Marketing Director Amit Gupta said. The Delhi-based company is an importer of Turkey carpets. 

The industry has also asked the Centre to resume duty drawback rates that would make export competitive. GST is also a sore point.

Experts said, most of the manufactures in the sector are uneducated and dread procedural formalities of the GST. “The government must do away with e-way bill within the municipal limits as has been done in Gujarat and increase the exemption limit from Rs 50,000 to Rs 1 lakh like Delhi,” Mittal said. 

The industry has approached the Centre to address their concerns.  It has asked the government to immediately slash the GST rate from 12 per cent to 5 per cent to make Indian carpets competitive.