Euro zone crisis hits carpet exporters in UP .

The euro zone crisis and the depreciation in the value of euro is hitting the top line of carpet exporters, who are witnessing lesser orders from Europe, coupled with higher input costs.

The exporters from the carpet hub of Bhadohi, Mirzapur and Varanasi have taken hit of 40-50 per cent on their revenues due to the depreciation in the Euro value from the peak of Rs 70 earlier.

"The Euro value had depreciated to almost Rs 54 and since we normally book orders six-12 months before delivery, our exports also got devalued during payment, although Euro has come to the level of Rs 58 now," All India Carpet Manufacturers’ Association Honorary Secretary Abdul Hadi told Business Standard.

Carpet exports worth almost Rs 2,000 crore are done from Uttar Pradesh (UP), which accounts for about 60 per cent of annual carpet exports from India estimated around Rs 3,500 crore.

UP is the largest exporter of hand woven, hand knotted and hand tufted carpets.

The fresh orders from Europe have not only slowed down, the importers are unwilling to revise the price, which is putting further strain on our narrow margins.

The sector was slowly getting on its feet following the slowdown in the US market, when the Euro zone troubles started emerging.

"Last year, the value of total exports had decreased to about Rs 1,800 crore and this year, we expect it to dip further in the region of Rs 1,600 crore," Hadi added.

US, the largest importer of Indian carpets with 50 per cent market share. In Europe, Germany is a major market and other destinations include Italy, Spain, Turkey and Arabian countries.

The exporters are now looking at the huge Chinese market to insulate them from the occasional economic upheavals in the key markets of USA and Europe.

"We will be holding trade fairs in Spain, Brazil and Australia from next month in association with the handicrafts department. Last month, a fair was held in China and the response was encouraging," Hadi added.

Source : Sify