Traditional Carpet Manufacturers in India

Narendra Kumar

04 Nov, 2019

Traditional Carpet Manufacturers weaving involves hand-woven carpets. Though machine manufactured carpets are available in plenty in the market, people still prefer the handmade carpets because

1. They look priceless and premium
2. There is a feeling of personal touch
3. A good way of supporting local artisans and weavers

The carpet weaving tradition was started by the Mogul dynasty in India. Initially considered a luxury item that was affordable only by the royals, carpets today are part of almost all households in India. Woven out of materials like silk, Pashmina, cotton and wool primarily, they surely add a royal look to the interiors and especially during winters they form a formidable way of keeping the indoors warm.

While getting into this industry is definitely lucrative, getting into manufacturing hand-woven carpets mean that the factory needs to be close to the source of raw materials as well as experienced local artisans must be available easily throughout the year. While handmade carpets are expensive compared to the machine manufactured ones, making the carpet manually involves washing the raw material, braiding, weaving, knitting and then carding and spinning into a yarn which is time-taking and long drawn as compared to the machine-made carpet.

How is the Carpet Industry Poised at the Moment in India?

India is the largest producer and exporter of Traditional Carpet Manufacturers. The fact is that more than 90% of the hand of the carpet woven in the country is exported and the largest buyer of these Traditional Carpet Manufacturers is the US. Apparently the world is quite fond of the Indian made carpet that is available in different colors, designs, and materials. The value of handmade carpet exported was worth USD 1358.17 million in 2015 and in 2016 it was valued at USD 1437.6 million.

The Indian carpet industry is poised to be growing at a CAGR of 2.6% by value from the current year until 2021.

What are the Mandatory Registrations that need to be Obtained to Start a Traditional Carpet Manufacturing Unit in India?

1. The main registration required is to give a legal entity to the business. Register the new company as one of the permitted business types in India – choose from a sole proprietorship to partnership to LLP to One Person Company to Private Limited Company.
2. Udyog Aadhaar registration with the Ministry of Micro, Small and Medium Enterprises. This is done through online application where the owner/promoter needs to submit his Aadhaar card, name of the promoter, category, business name, type of organization, address, date of commencement, bank details, key activity, NIC Code, number of employees, the total investment in machinery and District Industry Center details.
3. Registration for the 15-digit Goods and Services Tax^[1] Identification Number (GSTIN). This can also be applied online from the GST portal. GST has helped consolidate all types of taxes that were earlier charged in the pre-GST period into one single platform and authority.

Both GST and MSME registration helps the newly established manufacturing unit to avail of different type of government benefits.

1. Trade License from local authorities so as to certify that the business is carried out is not harming the business environment or the locality environment.
2. Registration as per Section 7 of the Factory Act, 1948. This is a mandatory registration for a factory that has more than 10 workers employed. The information that is essential for this registration is the name and address of the factory; name and address of the occupier and the owner; nature of manufacturing process; total rated horsepower installed in the factory; the name of the manager of the factory; the number of workers employed etc.
3. No-objection certificate and environmental clearance from the State Pollution Control Board.
4. The Import Export Code is a 10-digit unique code issued by the Director-General of Foreign Trade under the Ministry of Commerce. This registration can also be carried out online. The code is required to be used while exporting the products along with other official documents like the commercial invoice, packing list, certificate of inspection, shipment advice, bill of exchange, etc.