Nepali carpet exports to US up

Nepali carpet exports to US up
ArthaExpress, 23-Sep-2007

Nepali carpet exporters are optimistic on regaining their lost glory in woollen hand-knotted carpets following an increase in exports to the US market.

Although the European markets still consumes major chunk of Nepali carpet exports, the US is steadily coming up with one of potential markets, as it lured more than 22 per cent of the total exports during the fiscal year 2006-07.

Out of the total exports of 1.3 million sq-metre of hand-knotted carpets during the period, about 3,00,000 sq-metre were exported to US alone, according to figures of the Trade and Export Promotion Centre. Although total exports of carp-ets dropped by about 11 per cent in 2006-07, export to US market has been steadily growing

Nepal exported hand-knotted woollen carpets worth abo-ut Rs 5.5 billion during the fiscal 2006-07, whereas the exports in 2005-06 accounted for about six billion rupees. Poor manufacturing condition, static global demand along with the competition posed by Chinese and Vietnamese carpets lowered the demand for the Nepali carpets.

“Besides increasing demand in the US, competitive strength of Nepali carpets has also gone up in recent years, which is a plus point,” said Ram Bahadur Gurung, director of Gandaki Carpet Industry and joint coordinator of the Central Carpet Industry Association (CCIA).

He further said that Nepali carpet manufacturers and exporters could benefit from spill-over effect of proposed wage hike in China and India. Quoting unconfirmed reports, Guru-ng said that China is planning to fix a minimum wage of a labourer at Rs 17,000 per month and India is likely to follow.

“The hike in minimum wage is sure to make cost of production dearer in China and India, which will be an opportune ti-me for Nepal,” Gurung said. He urged that current problems such as political instability, labour dispute, frequent strikes and bandhs should, however, be addressed immediately.

In the operational front, the government must provide tax incentive by bringing back the carpet-manufacturing units into cottage and small industry category, according to CCIA. The association has also asked the government to formulate a separate labour law for the carpet industry, set up a carpet processing zone and distinct label or logo for Nepali hand-knotted carpets.

“Its time for an aggressive promotion, as the Nepali carpets is still popular among many buyers in Europe and luring new importers in the US, Japan, Korea and also in Latin America,” suggested Gurung, adding that the private and public sector must address the issue of Indo-Nepal carpet immediately. He foresees that the Nepali carpet exports could recover its lost glory with an average growth of 12-15 per cent annually, if the persisting issues are addressed on time.

Once, the carpet industry al-one is said to have provided more than 3,00,000 jobs.