Indian carpet makers bear tariff brunt; BTA talks reignite hopes

According to reports, the United States accounts for approximately 60 per cent of India’s carpet exports, and in FY25, of the around $1.5 billion worth of carpets shipped globally, over $920 million was reportedly exported to the US market alone.

India’s carpet industry, severely impacted by 50 per cent US tariffs, is hoping the renewed India-US trade negotiations make a breakthrough soon.
The US market accounts for approximately 60 per cent of India’s carpet exports, supporting the livelihoods of more than 2 million people nationwide.
With US orders on hold due to tariffs, carpet makers fear losing market share to competitors.

While this segment may not rival other major export-driven sectors in terms of revenue, its socioeconomic impact is substantial.

According to various estimates, the industry directly employs over two million workers, with numbers potentially reaching up to 3.2 million, particularly women, in rural areas. This labour-intensive sector, especially the handmade carpet segment, sustains the livelihoods of a large number of artisans and weavers, including those in the Mirzapur-Bhadohi region of Uttar Pradesh, a key hub for the industry.

However, the recently imposed US tariffs have severely disrupted this once thriving, export-driven industry. According to industry stakeholders, orders from US buyers have dropped sharply since the tariff announcement, triggering widespread layoffs and production halts across major carpet manufacturing centres such as Bhadohi (Uttar Pradesh), Panipat (Haryana), Jaipur and Bikaner (both in Rajasthan).

“Labourers are paid based on the square feet of carpet they knit. With shipments stalled, production has nearly stopped, and workers have started going back home,” claimed a Bikaner-based industry player.

A Bhadohi exporter, heavily reliant on the US market, confirmed that operations in his unit have come to a screeching halt, and no consignments have been dispatched to the US in over a month now, signalling a deepening crisis.

Bhadohi, widely regarded as the epicentre of India’s carpet business, is home to around 1,200 exporters who also function as manufacturers. Reports indicate that approximately 1.4 million individuals, including 5–6 per cent women, are directly or indirectly dependent on the industry in this region alone.

With order pipelines drying up, the effect is being felt across the industry. Speaking to the media, an official of the Carpet Export Promotion Council (CEPC) underlined that the carpet industry runs completely on exports with a very negligible domestic presence, and such high tariffs are now threatening the industry as well livelihoods of millions engaged in the industry.

While the Government’s recent move to remove import duties on cotton is expected to offer some relief, but those reliant on wool remain exposed still. Industry insiders now expressed concern that competitor countries such as Pakistan, Bangladesh, and Türkiye could capitalise on India’s weakening foothold in the US market.

However, the resumption of talks between India and the US has rekindled hopes among the carpet exporters, it seems.

A delegation led by US trade negotiator Brendan Lynch met with officials from the Ministry of Commerce in New Delhi yesterday.

Negotiations were suspended last month after President Trump’s 50 per cent tariff announcement and India’s refusal to halt purchases of Russian oil. However, in recent days, optimism has grown as Trump administration officials have taken a more conciliatory tone, and India has confirmed that the discussions are still ongoing for a bilateral trade agreement (BTA).

“…hope the discussions will help to sort out the vexed issue,” a Panipat-based carpet exporter expressed optimism, while adding that a positive resolution is critical not only for reviving exports to the US but also for safeguarding the livelihoods that are intrinsically connected with the industry.

Fibre2Fashion News Desk (DR)