Persian Carpet Comeback

EghtesadOnline: Iran is the biggest exporter of hand-woven carpets and holds a 30% share in the global handmade carpet trade.

News ID: ۷۴۳۳۲۱

16 August 2017

According to the Islamic Republic of Iran Customs Administration, Iran exported $89 million worth of handmade carpets during the four months to July 22, indicating a 7.3% rise compared with last year's corresponding period, IRNA quoted the head of Iran's National Carpet Center, Hamid Kargar, as saying.

In an interview with the Persian daily Shahrvand, Kargar has spoken of the current ins and outs of the Iranian handmade carpet industry.

According to the official, over the past decade, the industry has experienced one of the roughest times in memory. Nonetheless, it still stands on top of the world, according to Financial Tribune.

Persian hand-woven carpet exports declined significantly due to international sanctions imposed on Iran over its nuclear program, going down from an annual average of $500 million during the last two decades to $350 million in the last fiscal year (March 2016-17).

"The US ban on import of Iranian carpets in September 2010 truly did a number on the Iranian carpet industry. Note that the US is the biggest importer of Iranian handmade rugs," he said.

"The US used to import $80 million worth of carpets from Iran before the sanctions, accounting for 16.5% of Iran's total handmade carpet exports."

Obviously, losing such a big market greatly harmed Iran's carpet exports.

Sanctions were lifted in January 2016 as part of a landmark nuclear deal the country signed with world powers in the year before. In exchange, Iran agreed to limit the scope of its nuclear activities.

Among other factors hampering the Iranian handmade carpet industry, Kargar referred to the prevailing recession in European countries, the political unrest in some Arab countries and foreign currency fluctuations in Iran that increased trade risks, export expenses and transport problems.

However, the nuclear deal marked a milestone for all Iranian industries, including handmade carpets. The first shipment of Iranian hand-woven carpet, after five to six years of "zero" exports to the US, was sent to the country from Hamburg, Germany, instantly after the deal was reached.

According to Kargar, direct exports from Iran to the US resumed in February 2016.

In his words, the nuclear deal led to an increase in exports, as Iran exported 5,741 tons of hand-woven carpets worth over $359 million last year, registering a 13% and 23% growth in volume and value respectively compared with the year before. The US had a 90-million-dollar share, which is even bigger than the pre-sanctions export value.

According to the outgoing Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh, last year’s carpet exports to the US had a 96.7% hike year-on-year, IRNA reported.

Germany, Lebanon, the UAE, Pakistan, Japan, the UK, Qatar, South Africa and Australia were among the other main importers of Persian hand-woven carpets last year.

"Iran is estimated to produce 3 million square meters of handmade carpets annually, two-thirds of which are exported and the rest is sold in the domestic market," Kargar said.

According to the official, India is Iran's closest rival in the global handmade carpet market, followed by Pakistan, Afghanistan, Turkey, Nepal and China.

Kargar noted that in Iran, an average investment of 2 billion rials ($52,424) is needed to create one job, which investment is 200 million rials ($5,242) in the carpet industry.