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From Tehelka Magazine, Vol 6, Issue 4, Dated Jan 31, 2009

Worn Down

Famous for its handmade carpet industry and the maximum number of Mercedes cars, Bhadohi is now a ghost town

Cover Story

Photo; Ajay Singh

MOHAMMED RAFIQ, 54, has pulled his three children out of school: he’s lost his job as a binder in a carpet factory in Bhadohi, Uttar Pradesh. He’s hardly unique — some 10 lakh workers are out of work.

Once dubbed the dollar belt, godowns of 2,000-odd units in Bhadohi-Mirzapur are full of carpets that should have been shipped abroad. “Over 50 percent of our export orders have been cancelled or put on hold. No new orders are coming our way,” says Ravi Patodia, president, All India Carpet Manufacturers’ Association. In the last six months, export orders worth over Rs 1,000 crore have unravelled.

Bhadohi alone exports about 75 per cent of the Rs 4,400 total carpet exports from India. In 2007, Q4 exports were worth Rs 2,000 crore; the figure during the same period in 2008 has come down to a meagre Rs 800 crore.

Bhadohi’s handmade carpet weaving, a tradition that dates back to Akbar’s time, is world-famous. But the 100 percent export-oriented industry, which employs 22 lakh rural artisans, is now in turmoil. Looms are silent and processing halls deserted. There are no trucks queuing up at export houses and buyers are missing in the shops selling raw materials.

A year ago, carpets could be seen in fields, on roof-tops of every house-hold in this tiny district which may lack basic infrastructure, proper roads and amenities but boasts of having maximum number of Mercedes in the state . Today, it’s a ghost town. “I have been working in the industry for the past 34 years. Where will I go now?” asks Sayeed Khan, 57.

Ehsan, a contractor for polishing carpets, has brought down his workforce from 60 to four; Santosh Kumar now pulls a rickshaw. Even business owners are suffering. “We have taken huge loans on orders from the US. I don’t know how to repay them,” says Ashok Kumar. “The government showed immense concern for 1,900 Jet Airways and 50,000 Satyam employees, but is not worried about 10 lakh artisans,” says another exporter.

Worse, the Mayawati Government imposed four percent VAT on raw material for carpet manufacture. It’s refundable, but blocks cash flow, already stuck because of delayed payments. Costs of importing raw material have increased with dollar appreciation.

The Carpet Export Promotion Council wants income tax relief, increased duty drawbacks, duty exemption and no VAT: only such magic will make the carpet industry fly again. A tall order, indeed.


From Tehelka Magazine, Vol 6, Issue 4, Dated Jan 31, 2009

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