India’s Carpet Industry: A Boost for Jobs and Exports, Especially for Women
A study conducted by IIM Bangalore and King’s College London highlights the significant potential of India’s handwoven carpet industry for economic growth and job creation, particularly for women. The industry has a median turnover of Rs 1.5 crore and shows strong vertical integration and export orientation.
Leading Regions
Rajasthan and Uttar Pradesh are leading the way, with 97% and 81% of their carpet firms being predominantly exporters. In contrast, Kashmir, where only 46% of firms are exporters, faces challenges in accessing foreign clients and trade shows. Kashmir primarily exports luxury carpets to Germany and the UAE, while Uttar Pradesh and Rajasthan cater to the mass market, with the USA and the UK as main destinations.
Innovation and Market Linkages
The report found that nearly 90% of firms in Uttar Pradesh and Rajasthan have adopted innovative methods and designs. The study suggests that the carpet industry requires improved market linkages, export assistance, and innovation to further boost exports and employment.
Expert Opinions
Prof. Prateek Raj from IIM Bangalore stated, “While market linkages and demand-side factors are more pressing concerns than credit access, there is significant potential for growth. For example, Kashmir could enhance its luxury carpet exports with better export assistance and innovation support. Uttar Pradesh and Rajasthan could benefit from exploring new export destinations and focusing on higher quality products.”
Prof. Kamini Gupta from King’s College London added, “By understanding the specific needs of each cluster, such as export assistance in Kashmir or quality upgradation in Uttar Pradesh and Rajasthan, we can enhance the industry’s global competitiveness and boost MSME participation in international trade.”
Credit and Production
The study also found that market linkages and demand-side factors are more critical concerns than credit access. Most businesses (87%) reported no significant obstacles to obtaining credit, although 10% mentioned complicated documentation as an issue. Firms prefer bank loans, internal funds, and inter-firm credit, valuing relationships, low interest rates, trustworthiness, and simplicity. In Uttar Pradesh, four out of every five businesses provide credit to third parties, while in Kashmir and Rajasthan, this percentage is half. The industry exhibits strong vertical integration, with nearly half (43%) of firms involved in every major production function.
Doubts Revealed
IIM Bangalore -: IIM Bangalore is a famous school in India where people learn about business and management.
King’s College London -: King’s College London is a big school in England where people study many different subjects.
handwoven carpet -: A handwoven carpet is a special type of rug made by hand, not by machines.
median turnover -: Median turnover means the middle amount of money that businesses make in a year.
Rs 1.5 crore -: Rs 1.5 crore is a way to say 15 million rupees, which is a lot of money.
export potential -: Export potential means how much a product can be sold to other countries.
Rajasthan -: Rajasthan is a big state in India known for its deserts and palaces.
Uttar Pradesh -: Uttar Pradesh is a state in India with many people and famous places like the Taj Mahal.
Kashmir -: Kashmir is a beautiful region in India known for its mountains and special carpets.
luxury carpets -: Luxury carpets are very fancy and expensive rugs.
market linkages -: Market linkages mean connections between sellers and buyers to help sell products.
export assistance -: Export assistance means help given to sell products to other countries.
innovation -: Innovation means creating new and better ways to do things.
global competitiveness -: Global competitiveness means being able to do well in selling products all over the world.
MSME -: MSME stands for Micro, Small, and Medium Enterprises, which are small businesses.
