Jaipur Rugs: Boosting rural India’s economy by creating a new generation of artisans

- When NK Chaudhary was growing up in the Shekhawati region of Rajasthan, India, he would often spend time observing the beauty of nature around him, such as the natural patterns in sand dunes. He also studied texts such as the Bhagavad Gita and works by Mahatma Gandhi, which led him to contemplate how to help people in poverty.

While working in his father’s shoe shop as a young man, he decided to combine his love of beautiful patterns and craftsmanship with his quest for social justice and form his own enterprise. He studied India’s carpet industry, which lacked innovation, technology, connectivity to global design trends and efficient production processes. With his new-found knowledge of the trade, in 1978 he embarked on his entrepreneurial journey with two weaving looms and nine local artisans, rescuing the art of traditional of hand-knotted rugs from the brink of extinction.

Working around the clock to establish his fledgling business, NK travelled miles on his bicycle to procure the raw materials, ate with the weavers near the looms and spent nights at the production centre. He learned a lot from the weavers and by the end of the third year; he had ten additional looms and more artisans. Nearly 40 years later, his company, Jaipur Rugs, employs more than 40,000 artisans across six Indian states and sells its rugs worldwide.

Jaipur Rugs Foundation (JRF) was launched in 2004 to transform marginalized communities by providing them livelihood skills, linking rural people with global markets and developing their leadership capacity. One such initiative identified promising women artisans and trained them to take on greater roles in the supply chain. In the process, it introduced the entirely new role of Bunkar Sakhi – weaver’s friend. Today these women, many of whom have no formal employment experience, are managing hundreds of women artisans while developing their natural leadership abilities.

JRF also works to improve the entire carpet industry by eliminating middlemen, directing the flow of benefits to artisans, putting an end to exploitation and under-payment, and connecting customers to artisans.

Transferring skills to build the rural economy

Through JRF, rural people – especially women – are trained in weaving hand knotted carpets and entrepreneurship development. Trainees receive a stipend during the training period, after which JRF helps them to obtain government subsidies and financing to install looms in their homes. Now ready for work, the artisans are entrepreneurs with the freedom to work for Jaipur Rugs or any other rug company.

Jaipur produces the raw materials for its rugs and delivers them to artisans’ homes, oversees production via rigorous quality control processes, and collects, distributes and markets the finished products. The company now works with around with 28,000 weavers and 12,000 raw material producers, along with its 600 staff members. Annual revenues for Jaipur have topped $25 million.

While the company began by fulfilling the outsourcing needs of other companies, NK Chaudhary's intimate understanding of the carpet industry enabled Jaipur to expand into the export market in 1999. Now a major international brand, Jaipur’s rugs are sold around the world. According to Mr. Chaudhary, “Our growth can be attributed to the fact that we have done comprehensive study of the market and developed a deep relationship with the artisan community, which has given us the experience for providing our customers the best products.”

Transforming rural India with global market reach

The steady growth of Jaipur Rugs and JRF has helped to transform villages that previously depended on low-paid seasonal labour into a profitable value chain of artisans. This in turn has enabled Jaipur to handle increasing demand from its customers. It has also eliminated middlemen, whose control over market access means that they can appropriate a large share of the profits from rug sales; Jaipur brings this share of the profits directly to artisans.

Jaipur’s model is based on the concept of humanitarian capitalism, which means its profits are channelled into activities that serve humanity with love and compassion. Weavers receive a minimum of US$70 per month (compared to $6 from seasonal work in agriculture). And while Jaipur Rugs provides artisans a fair price for their work JRF, connects them with literacy and financial inclusion, health care and artisan cards – enabling them to access additional services. This model also aims to harness grassroots potential to fulfil core functional roles within the supply chain – and cultivate future senior managers from among artisan families.

Inclusive growth and sustainability

Online sales provide a major boost to the company’s global export market: Jaipur is now India’s largest hand-knotted rug manufacturer, having produced over 10 million square feet of carpet for customers in more than 40 countries. In August 2011, Jaipur joined the Business Call to Action (BCtA) with a pledge to provide sustainable livelihoods for 6,000 underprivileged women and deliver skills training to 10,000 of the poorest people in rural India. Surpassing these goals by 2015, the company went on to provide management and leadership training to 1,700 women so that they could assume managerial positions with the company.

In 2016, Jaipur renewed its BCtA commitment, pledging to enhance the creative capacities of 15,000 artisans, provide sustainable livelihood opportunities to 9,000 marginalized women and lead a range of grassroots leadership programmes targeting 15,000 artisans in India’s carpet value chain – all by 2022.

Often called the ‘Gandhi of Indian carpet industry’, founder NK Chaudhary has received several awards for his inclusive business model. Mr. Chaudhary has said that “Everyone has the power to transform the world; the key is to search within and discover your power – the power to heal mankind through business.”

Mr. Chaudhary remains committed to continuing pursuing the company’s inclusive growth and serving as a model for other companies through the BCtA. He has stated that, “I am not the owner of this business. The real owners are people who put in their hard work to produce beautiful carpets which are liked by customers around the world.”