Turkey imposes 50pc custom duty on Pakistan handmade carpets

Turkey, the second largest exporter of Pakistani handmade carpets, after striking Safeguard Measures Duty of 42.

2 percent on Pakistan's apparel imports in 2011, has now imposed another 50 percent custom duty on 130 Pakistani products including hand knotted carpets, leading to further decline in the already squeezed carpet export of about $128 million.

The Pakistan Carpet Manufacturers and Exporters Association, in a letter written to Federal Minister of Commerce, has criticized the decision of Turkish Ministry of Economy dated 17th February 2015, stating the move will cause complete collapse of handmade carpet industry.

As per industry sources, after the announcement of this additional customs duty, the foreign buyers have stopped purchasing orders from Pakistani importers.

As a result, all shipments at Karachi, waiting for custom clearance, are being sent back to Punjab, which contributes almost 80% of carpet manufacturing presently.

A number of carpet manufacturers from Karachi as well as Lahore have complained that their orders have been cancelled by the foreign importers after the announcement of additional custom duty by Turkish government.

The exporters blasted the unfriendly decision of Turkish government, which we here in Pakistan consider our friend, started the unfriendly move of enhancing tax at a time when Turkish Prime Minister was on visit to Pakistan.

Their move will totally destroy our carpet industry, they added.

Statistics show that carpet exports have registered another decline of more than 10% during first half of the current fiscal year of 2014-15 despite free market access to the EU countries under GSP Plus status with the country already suffering decline of over 50% during the last seven years to 128 million dollar from 300 million dollars.

The Pakistan Carpet Manufacturers and Exporters Association chairman Usman Ghani demanded that government should immediately take up this issue with the Turkish government to get the duty withdrawn.

The FTA should be signed with Turkey and hand-knotted carpets must be a part of FTA for duty-free access to Turkish market.

The government should take immediate steps as quite a lot of orders shipments are getting ready and also stopped at Karachi port.

PCMEA vice chairman Qamar Zia observed that the government needs to incorporate hand knotted carpets in FTAs with other countries, as the handmade carpets have never been included in any Pakistan’s Free Trade Agreement.

The PCMEA vice chairman observed that almost 100% of carpets produced in Pakistan are exported, providing around 600% value addition to our products.

He said that the sector of handmade carpets is labour-intensive and the majority of women employed in it work from their homes.

According to Qamar Zia, the exports of hand knotted carpets are based upon the most scattered and unorganized manufacturing sector in the country, which constitutes the largest cottage industry in Pakistan.

This 100% exportable product creates at least 600% value addition and provides livelihood to more than one million people in remote areas.

The hand knotted carpet sector represents small Industry locating in the remotest and most poverty stricken areas of Pakistan.

“We provide direct labor to the most under-privileged and uneducated bottom of 5% strata of our society and around 70% of work force of this sector comprises young women who make carpets at home.

The carpet sector is doing a great service to the nation by providing employment to around 1 million people at their door step.

This also helps the country in stopping migration from villages to cities.