India’s carpet exporters fear that the 50% tariff imposed by the US could choke cash flows, stall production, and push lakhs of artisans and labourers out of work.
Concerns have escalated since US President Donald Trump announced an additional 25% duty on Indian exports on August 6. Since then, most orders from the US — India’s largest carpet market — have either been cancelled or indefinitely put on hold. Factories in carpet hubs such as Bhadohi, Panipat, Jaipur, and Bikaner have slowed operations, with hundreds of workers already unemployed.
“Labourers are paid based on the square feet of carpet they knit. With shipments stalled, production has nearly stopped. Around 50% of the workers have already gone back home,” said Inder Mohta of Bikaner Handloom Carpets.
The US accounts for nearly 60% of India’s carpet exports. Out of $1.5 billion worth of carpets shipped in FY25, more than $920 million went to the US. Exporters estimate that 70% of ongoing orders have been scrapped or deferred since the tariff announcement.
“If the tariff gets implemented, nearly 28–30 lakh lives will be impacted,” said Piyush Baranwal, honorary secretary of the All India Carpet Manufacturers’ Association. “Being a labour-intensive sector with a large share of women workers, the shock will also hit farmers supplying wool and ancillary industries such as yarn, packaging, transport, and logistics.”
Baranwal warned that prolonged unemployment could push artisans to migrate to other sectors, creating a long-term labour shortage even if the market stabilises.
The government’s recent removal of import duty on cotton has offered little relief, as the carpet industry depends largely on wool. Exporters fear that if the tariff persists, competitors such as Turkey, Bangladesh, and Nepal will seize India’s share of the lucrative US market.
Some exporters are even considering shifting production to Nepal, where tariffs are only 10%. “If the government can work out an arrangement with Nepal, we may relocate part of our operations there. Most of our labourers come from Bihar and Uttar Pradesh, so mobility will not be a challenge,” said a carpet exporter, requesting anonymity, who added that orders worth ₹3–4 crore have already been put on hold.
Industry bodies have urged the government to extend the interest equalisation scheme and revise the Remission of Duties and Taxes on Export Products (RoDTEP) to cushion the blow.