Hailey College Of Commerce

University Of the Punjab

Assignment :

Impact of export of Carpets & Rugs on the balance of trades of

Pakistan

Submitted To :

Professor Muhammad Akram Sajid

Presented By :

Sadia Aslam (BC16-496)

Carpets Industry of Pakistan

arpet Industry of Pakistan is turning into an abysmal story as the export value of the industry
during the last decade till 2017, came down from $396 million to $136 million. India in
comparison had an annual carpet export of $300 million which soared to $8 billion in 2016 Total
production of Pakistan fell from 2,930,000 square meters to a mere 1,982,000 square metres.

From being one of the world’s largest producers and exporters of hand-knotted carpets, to being
one of the five prime export-oriented sectors of the country under Generalised System of
Preference (GSP) plus status from European Union (EU), the carpet industry has not yet found a
way out to bolster their exports in international markets and to become a vital player in the
foreign trade of Pakistan.
The non-exploration of new markets, acute shortage of electricity, shortage of skilled labour
force and high mark-up rates are just few of the many reasons behind the current state of
affairs of carpet industries.

When Pakistan got the GSP plus status, it was expected that it would double its exports to EU,
but instead it saw a decline in exports. The past successive governments failed to come up with
any conclusive strategy to deal with the issue, the establishment of a council meant to tackle
the problems of the sector was not formulated either.

Pakistan was known to be a specialist of hand made carpets

Pakistan was known to be a specialist of hand-made carpets. But the decision of Commerce
Ministry to exclude the hand-made carpets from Free Trade Agreement (FTA) concession list
and to include machine-made carpets proved to be a disaster for the industry, as it decreased
the value of Pakistan’s hand-knotted carpets in the International market.

Pakistan Carpet Manufacturers and Exporters Association, Chairman, Latif Malik, said that
among other suggestions to the new government, Association would press upon the need to
mainstream women labour, so that women (formal and informal) workers might get
employments at their doorstep.

A single piece of carpet requires six months to a year’s labour. Around 70 percent of work force
of this sector comprises of women who make carpets at home .The Association suggested new
government to allocate substantial amount from its Public Sector Development Programme .
Pakistan is one of the most innovative producers of new designs and
varieties of carpets

Pakistan is one of the most innovative producers of new designs and varieties of carpets. The
gains made in US market during 12 years are now beginning to give Pakistan an edge in EU if
new government tries for sector’s uplift.

Malik, said that, Exporters were on demand for early release of refunds, concessions and credit
financing. The exports of carpet from Pakistan would likely to exceed $500 million mark if it was
provided commerce and industry ministries support. Hand knotted carpets are one the major
exports of Pakistan. Pakistani carpets are very well known around the world for their exquisite
and creative designs, beautiful colour combinations and superior craftsmanship. United
Kingdom, Denmark and France are buyers of hand knotted carpets valuing to more than $110
million. Pakistan’s exports to US in terms of quantity were more than 1685,100 square
meter.China, Dubai and Germany were classic examples of well-organised international trade
fairs, where businessmen from all over the world converged.

Malik further said that, the industry is in serious need of the government’s help, which can
provide it at least 3 percent collateral relief on carpet export.

Europe and South America are potential regions of carpet export. Foreign missions of Pakistan
can play important role in bringing a turnaround by educating Pakistani carpet manufacturers
and exporters about fast global-changing trends and giving awareness about latest techniques
and technology being deployed by the developed world. Making all these changes would
hopefully end the declining trend of exports of the industry and would help to improve its
current dismal situation into something valuable for the foreign trade and economy of Pakistan.

Export value of carpets and rugs of Pakistan

Pakistan’s Exports: Annual: Value: Carpets & Rugs data was reported at 8,054.000 PKR mn in
Jun 2017. This records a decrease from the previous number of 9,897.000 PKR mn for Jun 2016.
Pakistan’s Exports: Annual: Value: Carpets & Rugs data is updated yearly, averaging 5,709.000
PKR mn from Jun 1971 to 2017, with 47 observations. The data reached an all-time high of
17,015.000 PKR mn in 2001 and a record low of 65.000 PKR mn in 1971. Pakistan’s Exports:
Annual: Value: Carpets & Rugs data remains active status in CEIC and is reported by Ministry of
Finance. The data is categorized under Global Database’s Pakistan – Table PK.JA005: Trade
Statistics: By Economic Categories and Commodity Group: Annual.

Pakistan is the 68th largest export economy in the world.

According to the latest reports, total exports of Pakistan are recorded as $1.8 billion in
September 2019.
Pakistan’s Total Exports expanded 29.2 % in Sep 2019, compared with an increase of 18.1 % in
the previous Year
Top 10 export products of Pakistan
1. Miscellaneous textiles, worn clothing: US$4.1 billion (17.1% of total exports)

2. Cotton: $3.5 billion (14.9%)

3. Knit or crochet clothing, accessories: $2.9 billion (12%)

4. Clothing, accessories (not knit or crochet): $2.6 billion (10.9%)

5. Cereals: $2.4 billion (9.9%)

6. Carpets and rugs 1.2 Billion (4.5 %)

7. Leather/animal gut articles: $662.7 million (2.8%)

8. Sugar, sugar confectionery: $519 million (2.2%)

9. Mineral fuels including oil: $499.5 million (2.1%)

10. Beverages, spirits, vinegar: $453.1 million (1.9%)

Export Value Chart