India’s renowned carpet and floor coverings sector, valued at $2.93 billion, is reeling under new pressure as reciprocal tariffs imposed by the United States threaten its biggest export market. Industry leaders warn that the development has compounded long-standing challenges, potentially derailing exports and endangering livelihoods in a trade employing over 2 million artisans and workers.
According to the India Brand Equity Foundation (IBEF), India exported $808 million worth of carpets to the US from April to December 2024, accounting for nearly 70% of total carpet exports. Handmade carpets alone represented $667 million of this volume, underscoring the critical role of the American market in sustaining India’s traditional carpet industry.
“The tariffs have created a significant cost disadvantage for Indian exporters,” said Sanket Desai, Indirect Tax Partner at EY India. “While other countries like Turkey, Egypt, and Mexico face lower US tariffs, India now confronts a serious competitive imbalance.”
Desai added that the Trump-era tariffs come at a time when the Indian carpet sector is already battling shortages of skilled labor and raw materials like wool and silk cotton, along with global economic uncertainty and supply chain disruptions.
Industry Struggles to Stay Afloat
Mahavir Pratap Sharma, Director of Oscar Exports, emphasized the urgency of differentiating handmade and machine-made carpets in trade policy. “The US treats both types the same in tariff terms, yet machine-made carpets cost a tenth of handmade ones. This flat duty structure is devastating for handloom artisans,” he said.
Sharma advocates for separate HSN codes (Harmonized System of Nomenclature) and a zero-duty regime for handmade carpets to level the playing field.
Tariffs Stall Buyer Interest
The impact is already visible on the ground. Nikita Khanna, Founder of Kaati Carpets, noted a dramatic decline in international buyer interest:
“Not one American buyer attended the Bharat Tex fair after the tariff announcement. It’s a total standstill.”
She described how custom duties have tripled, rising from 3–4% to nearly 10%, forcing buyers to delay or halt orders. “Some buyers may propose splitting the tariff cost, but that’s not financially viable for most exporters. Right now, we’re all just waiting—there’s no clear path forward,” Khanna added.
Outlook Uncertain for a Heritage Industry
With India contributing around 40% of the global handmade carpet exports, the stakes are high. Between April and December 2024, carpet exports stood at $1.24 billion, down from $1.39 billion in the previous fiscal year, signaling growing pressure on the industry.
As trade negotiations remain uncertain and global economic conditions continue to fluctuate, Indian carpet exporters are calling for urgent policy revisions, diplomatic intervention, and supportive trade frameworks to preserve one of the country’s oldest and most culturally rich industries.
For now, however, the combination of rising tariffs, input costs, and a shrinking customer base is weaving a challenging pattern for India’s handmade carpet sector.
