Capacity Utilisation of Carpet Industry Reaches 20%

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Capacity Utilisation of Carpet Industry Reaches 20%

July 19: The capacity utilisation of Nepali carpet industries has increased to 20 percent after the easing of the lockdown. However, export of carpet has not resumed due to the continuing ban on international flight.

Entrepreneurs say that while previously produced carpets could not be exported, new products will unlikely to come into the market. According to them, they have to run the industries to sustain workers.

As the exports have been halted due to covid-19 pandemic, carpets worth Rs 4 billion are stuck in warehouses.

The wool carpets produced in Nepal are exported in more than 50 countries including America, China, Germany, UK, Italy, France, Canada, Belgium and Australia.

According to Tenzing Sherpa, vice president of Nepal Carpet Manufacturers and Exporters Association, it is not possible to export Nepali carpets currently. The demand in the US, Europe and the UK, where Nepali carpets are exported in large quantities, has decreased due to the pandemic. “The demand of Nepali carpet has dropped by 80 percent as the international market is also almost closed. On the other hand, even if we want to export, there is no favorable environment now,” Sherpa said.

Nepali carpet exporters mainly export carpets to foreign countries through the Kolkata Port in India. However, compared to countries including India and Pakistan, it takes more time for Nepali exporters to supply their products to foreign markets. "It takes 2-3 months for our carpets to reach major foreign markets," mentioned Sherpa

According to the Nepal Carpet Manufacturers and Exporters Association, only a small number of carpets exported to China are being produced. According to Amrit Tamang, CEO of the association, the compulsion to manufacture carpets to support the workers and the increase in stock of have hit the carpet manufacturers hard. “We have not been able to export, on top of our stocks are increasing,” he said. At present, more than 300,000 people in Nepal are dependent on the carpet industry. Similarly, there are about 700 entrepreneurs and more than 150 exporters in the carpet exporters.

According to the Customs Department, carpets worth Rs. 7.36 billion were exported from Nepal in the fiscal year 2075/76. Carpet exports have declined by about 19% in the first 11 months of FY 2076/77. During this period, carpets worth Rs 5.5 billion have been exported from Nepal. Now, the main market for Nepali carpets is the United States, followed by Germany, the UK, and China.

According to the carpet entrepreneurs, there is no shortage of raw material as of now, as there was stock of raw materials even before the lockdown. The raw materials for the carpet in Nepal are mainly imported from Tibet and New Zealand.

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