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Handmade Carpet Industry Crippled by Illegal Imports
Domestic Economy

Handmade Carpet Industry Crippled by Illegal Imports

After being hit by economic crises in recent years and a shift in consumers’ taste towards machine-made carpets, the centuries-old handmade carpet industry in Iran is now faced with a new dilemma: cheap imports from India, Pakistan and most recently, China.
“Importing foreign handmade carpets is illegal; but as these countries manufacture handmade rugs at competitive prices due to availability of cheaper labor force, their products are imported illegally,” Mojtaba Araghchi, head of Handmade Carpet Exporters Association told ISNA.
Handmade rugs are among Iran’s most important non-oil exports. More than $400 million worth of hand-made carpets was exported in the last Iranian calendar year (ended March 20), which accounted for about 25 percent of the global handmade-rug market. As many as 2.3 million people are directly involved in Iran’s carpet industry.  
“More than 80 percent of the handmade carpets manufactured in Iran are exported. If the product is imported in large quantities, it could destroy the carpet weavers’ livelihood,” warned Jabbar Kuchakinejad, chairman of the parliament’s handicraft and tourism committee.
“The ministry of industry, mine and trade as well as the Cultural Heritage, Handicrafts and Tourism Organization (ICHHTO) share the responsibility to oversee all issues pertaining to handicrafts,” said Kuchakinejad, calling on the authorities to act immediately to prevent illegal imports of hand-woven carpets.

  Who to Blame?
It is hard to determine how the foreign hand-woven carpets have entered the Iranian markets, said the parliament member, adding that neither the customs authorities nor the border transit officials are willing to take the blame.
 “When we question the customs authorities, they claim the carpets are smuggled, but when we ask the anti-smuggling police authorities, they say the goods are imported through legal channels. But reports indicate that hand-woven rugs are imported through both legal and illegal routes.”
Domestic demand for handmade carpets has declined drastically in recent years, due mainly to economic factors which have seen the customers switching to cheaper machine-made rugs. Also, the machine-made carpets offer a wider range of patterns and colors which tend to suite the young generation’s palate.

  Affected by Sanctions
The industry has also been largely affected by the sanctions imposed by the West over Iran’s nuclear energy program.  
Banking sanctions and a 2010 embargo on Iranian rugs by the US government are impeding merchants’ ability to sell goods abroad and transfer the proceeds home.
An overall economic downturn and high inflation rate also add to the manufacturers’ burden as they cause year on year increase in production costs, rendering the domestically manufactured handmade carpets unable to compete in the global market.

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