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IB-case 14

-Vinit Shah

--Tarun Kumar

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The Suggestions for arresting the declining trend and improving the unit value

realisation are:

�Liberalized export credit both for pre-shipment and post-shipment to be made

available to the manufacturers/exporters on concessional rate of interest.

�Govt. may also like to write to RBI not to insist for repatriation of export proceeds

within 180 days and grant extension up to 360 days in hard pressed cases.

�The rate of interest on Export Credit is very high as compared to China where the

interest rate for export is only 3% to 4% and repayment is relaxable up to 12 Years.

�The Indian Exporters should also look for alternate buyer and offer products in

new design stressing more on quality.

�Stress on use of Kaleen Label for restoring the confidence of the importers.

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�A ware house facility to be provided to the exporters for temporary storing their

consignments on refusal of payment by the buyers to avoid auctioning by the customs.

�Extensive participation in fairs & exhibitions to be suggested for increasing

demands particularly in Scandinavian Countries.

�Regular publicity for image building The specific steps taken to boost the export of 

carpets include.

�Organization of buyer seller meet.

�Overseas publicity.

�Organization of workshops on design development�Participation in various international trade fairs.

�Sponsoring of sales cum study teams abroad.

�Organization of Indian carpet expo by carpet exports promotion council annually in

New Delhi

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The reasons for our exporters not penetrating much in the markets are

�Distant location and edge of competitors because of proximity in the markets

�Slow moving of economy in the region

�Climatic conditions.

�Freight subsidy to be provided for exports to South East Asian Countries.

�Storage facility to be provided for exporters to sell product to alternatebuyers in case of refusal.

�Special emphasis to be made for promotion of carpets & floor coverings in

the Region

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The only weakness is marketing and fore-sightedness of the exporters besides

resources. Generally the exporters are small in comparison with our competitors

thus having limited resources. Indian exporters have so far been making carpets as

per orders of Buyers and have not paid much attention or priority on keepinginventory for spot sales. The trend in buying has undergone a radical change

switching over to stock buying rather than placing orders.

The Indian Carpet Industry has potential for expansion since adequate skilled

manpower & raw-material is available; requirement for capital is almost negligible.

Indian Products are acceptable all over the World and are at par on quality andcompetitive in prices. There is tremendous flexibility and adaptability. There are a

large range of products to offer. India can supply carpets & floor coverings strictly

in accordance with the requirement of consumers

Nepal had following advantages :

Because of status of poor country given to Nepal, it doesnt pay any duty

1% extra excise duty has been imposed on carpets in Indian budget 2011.

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Strengths-Availability of artistic skills, cheap labor and low cost material, innovation in

selling carpets

& flexibility in mfg. all kinds.

Weakness-Unorganized exporters & manufacturers lack marketing channels. Poor

infrastructure &

internal competition & lack professional approach.

Opportunities-Home furnishing market is moving towards carpet industry resulting innew design.

Stocking & warehousing.

Threats-Unhealthy competition from within.

social evil such as child labor.

SWOT ANALYSIS OF INDIAN CARPET INDUSTRY