The specialized commission for carpets, handicrafts and tourism of Iran Chamber of Cooperatives is petitioning the government to repeal the Central Bank of Iran’s export revenue repatriation policy, Abdollah Bahrami, the head of the commission, said.
“The policy, approved in the fiscal 2019-20 by CBI, has destroyed the motivation of carpet-weavers and exporters for making endeavors; the directive has stalled carpet industry over the past three years, reducing exports to $50 million per year,” he was quoted as saying by ISNA.
The CBI mandates all exporters to repatriate their foreign currency earnings from exports and sell them at lower rates than market prices to the bank, which discourages traders from undertaking exports.
“Lack of exhibitions owing to Covid-19 restrictions and the absence of foreign traders are other obstacles in the way of exports in recent years,” he said, adding that rug prices have increased as a result of the declining number of weavers and increasing prices of raw materials.
“Export of carpets is contingent on production and employment. In the absence of exports, domestic production and employment decline. Under the current conditions, no trader is willing to export carpets.”
The Islamic Republic of Iran Customs Administration’s data show handmade carpet export reached its peak in the fiscal 1993-94 with $2 billion. The exports decreased to $240 million in the fiscal 2018-19 and declined further to $70 million after sanctions in the fiscal 2019-20.
“Exports of hand-woven carpets have decreased constantly, except in the early years after the Islamic Revolution, which is indicative of the fact that the policies employed by subsequent governments regarding the carpet industry have been the same,” Razi Haji-Aqamiri, a member of Tehran Chamber of Commerce, Industries, Mines and Agriculture, said recently.
“Such a neglectful approach is not restricted to carpet; it is also evident in other non-oil products, with the exception of some consumer items. All in all, the country’s conditions, approaches employed by the government and restrictions imposed by sanctions are not desirable for exports.”
The official noted that old, traditional markets of Persian carpets have all but disappeared; carpet is a cultural product that needs long-term marketing.
“You can’t replace markets such as those of the US and Europe with China and Malaysia over four, five or even 10 years. Persian carpets have been in the US and Europe for over 200 years. Furthermore, marketing for Persian carpet requires great investment to pay off and these expenses are beyond the means of the private sector. The government should seek to create markets via long-term advertising plan and strategy. The revival of lost markets is virtually impossible and the government doesn’t seem to be motivated enough to spend at the present juncture,” he said.
He stressed that none of our governments has stuck to plans and laws for long, which is a deadly virus for the economy and exports in particular.
“At present, a handful of producers are in the business of making high-priced carpets; they are making sales to some extent but generally there are no carpet exports. Export of Persian carpet is dead,” he declared.
Elaborating on the collapse of carpet trading in international markets, the official said, “The standing of carpet has shifted in the global markets. These changes have harmed Persian carpets more than those made in other countries. Today, interior designers are less inclined to recommend decorating areas with hand-woven rugs. Carpet flooring is not as popular now as it was in the past. But it is important to account for a great share of this small market. The total value of hand-woven carpet market is $3 billion; it is a huge difference between accounting for $2 billion of this market or $200 million. It is up to us to grab a higher share and not to hand over the market to rivals like Turkey, India and Pakistan.”
Haji-Aqamiri concluded that sanctions have weakened the position of Persian carpet in the global markets and “customers have forgotten about us due to our absence in the market”.
