Iran’s carpet industry is likely to lose a major source of revenue when U.S. sanctions banning the import of the Persian carpets are implemented starting in two days, an Iranian industry expert said.

The export of hand-woven carpets generates about $500 million annually for Iran’s economy, with 20 percent of the total earned in the U.S. market, Ali-Reza Ghaderi, founder and head of the Persian Carpet Think Tank, said today in a phone interview from Tehran with the Bloomberg news site.

Banning the entry of Iranian hand-woven carpets into the U.S. is “a clear mistake,” Ghaderi said. “The carpet industry is in the hands of the private sector from scratch to end product and is not backed by the Iranian government. Instead of hurting the regime this will harm Iranian families involved in the business.”

The U.S. has spearheaded efforts to isolate Iran over the country’s insistence on pursuing uranium enrichment as part of its nuclear activities. The United Nations imposed a fourth round of sanctions on the Persian Gulf nation in June. On July 1, the U.S. passed additional sanctions.

A ban on Iranian imports, including Persian rugs, comes into effect on Sept. 29 as part of those measures, Ghaderi said.

“The U.S. decision to ban sales of carpets should not be viewed as merely a curiosity,” said Robert Powell, an economist with the Economist Intelligence Unit in New York. “Carpet weaving is big business in Iran and one of the country’s biggest employers,” Powell wrote in e-mailed comments. The sale of carpets to the U.S. has increased recently even as ties between the two nations deteriorated, he said.

Iran’s carpet sales are also rising elsewhere, as the Trade Promotion Organization of Iran has targeted Asia with some success as a market for Iranian non-oil products, Powell said. Still, the move will have “a considerable impact on the local industry,” he said.

Ghaderi said he was also concerned that sanctions would provide an opportunity for countries that duplicate Persian carpets’ motifs and for competitors that supply goods of lesser quality.

“When the supply source is shut it leads to a wave of demand and this will be shifted towards pieces of lesser quality,” Ghaderi said. He named China, Nepal, India and Pakistan as countries where there are companies that copy Persian carpets as a business.

Iran produces about 5 million square meters (53 million square feet) of woven carpets annually, of which 4 million are exported, Ghaderi said. Iran’s commercial export of carpets began about a century ago, he said.

source: Bloomberg, by Ladane Nasseri

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