By Ayesha Mudassar ISLAMABAD, Feb 03 (INP-WealthPK): Though the first half of the ongoing fiscal year witnessed somewhat decent growth in exports of carpets, rugs and mats, the exports in December fell compared to the previous month of November. According to the Pakistan Bureau of Statistics, the country’s exports of carpets, rugs and mats were valued at over $40 million in the first half (July-December) of this fiscal year, going up from over $35 million in the corresponding period of the last year, thanks to a sustained increase in worldwide demand. However, exports fell to over $6 million in December from over $8 million in November, according to WealthPK. Of the total $40.6 million exports, a major share of carpets, rugs and mats comes in the shape of smuggled articles from Afghanistan, which is then exported out of Pakistan. According to estimates, share of the products made by Pakistani artisans and exported is valued at just $10-15 million, and the rest is Afghan-smuggled products. The smuggling of these products from Afghanistan is causing the government dearly in terms of duties and taxes, which is hurting the Pakistani manufacturers. It is to mention here that global carpet and rug market grew at the compound annual growth rate of 5% during 2021, and is estimated to grow at the same pace till 2025. The global market is fiercely competitive with multiple large competitors, including North America, Europe, China, Japan, Southeast Asia and India. The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) believes that the country's carpet sector has enormous potential for increasing exports. However, the government must take concrete measures to curb smuggling and provide incentives to the local industry to help it come out of the contraction caused by the Covid-19 pandemic. According to the association, as consumers are moving towards bright, appealing colours and non-geometrical designer patterns in carpets and rugs, the industry must be encouraged and incentivised to fully transform to machine-based manufacturing. According to it, the global market has been driven by optimal prices, quick delivery, and outstanding quality. In the highly competitive carpet business, technical innovation supported by sustainability is the primary driver of growth. The association said Pakistan’s carpet industry got boost after it was included in the Pakistan-China free trade agreement. Under the agreement, 313 export items, including carpets, have been given duty-free access to Chinese market. The association said that it is a good omen that Chinese and Pakistan weavers are learning from each other’s experiences to produce quality products both machine and hand-made. “The present global trend is shifting as now high-tech machines weave carpets that are as good as artisan-made.” To better compete in the global market, the carpet manufacturers and exporters should pay close attention to the quality of products. The government of Pakistan should make it easier for carpet exporters to switch from hand-knit to machine-made manufacturing. For this to happen, the government should set up a carpet city. “The government should ensure registration of all stakeholders in the industry so that tax burden does not fall only on a few. The government should also ensure uninterrupted supply of electricity and gas at subsidised rates to help reduce production cost. The carpet manufacturers should be allowed duty-free import of machinery to effect innovation to allow the products to become competitive in the global market.”