Iran’s machine-made carpet industry is facing a critical challenge. Despite a relative decline in production compared to previous years, the sector currently operates with nearly 50% surplus output that can only be absorbed through exports. However, the main obstacle lies in restrictive currency repatriation regulations, which have disrupted export activities since 2018.
According to current rules, exporters are required to return foreign exchange earnings to the Central Bank at a fixed rate — often below actual production costs — while receiving no export incentives in return. This policy has forced many manufacturers to sell directly to foreign buyers at factory gates rather than through official export channels. As a result, carpets are exported via one-time-use trade cards and border markets, a mechanism that undermines both producers’ rights and government revenues.
The consequences are severe. Modern weaving machinery, imported with significant investment and foreign exchange outflow, remains underutilized due to export restrictions. This comes at a time when the machine-made carpet industry is one of Iran’s most job-generating sectors. Each weaving machine provides direct employment for about 15 workers and at least double that number indirectly.
The industry has the potential to act as a strong driver of employment and production. Yet without the removal of export barriers and reform of currency regulations, the vast capacity of Iran’s machine-made carpet sector will remain underexploited, threatening the sustainability and growth of one of the nation’s most valuable industries.
