Such a cap is going to have an adverse affect on exports," CEPC said. The duty drawback rates are announced every year without any cap and the small carpet exporters finalised their orders keeping in mind that they would get 10 per cent duty drawback on their export of carpets, it said.

The rates had remained at the same level of 10 per cent since the last three years without any cap. The time desired for the execution of the export orders for shipment of carpets is between six to nine months and the reduction in the duty rates has forced the small exporters to stop the execution of export orders as they cannot fulfill the export commitment, it said.

The CEPC has said the whole carpet industry which earns foreign exchange worth Rs 2,200 crore annually and provides employment to 30 lakh artisans in the rural areas has come to a standstill, which will not only affect carpet exports but will also cause huge unemployment.