Tariff crisis looms over carpet industry

{ ARTISANS, MANUFACTURERS TENSE

- Sudhir Kumar

Aslam Mehboob, a carpet factory owner in Uttar Pradesh’s Bhadohi town, is worried about his future. The 55-year-old runs a ₹10 crore business that exports 3,000 hand-knotted carpets every year. His biggest market: the US.

Mehboob’s factory, Alam Rugs, employed 30 people just two months ago. Today, it has dwindled to 10 as the industry faces uncertainty.

“All handmade carpet manufacturers are tense due to the tariff. It has caused uncertainty in the handmade carpet sector. Consequently, carpet makers like me have cut their production up to 30%,” said Mehboob.

Aslam creates woollen carpets ina variety of styles, including Tibetan, Turkish, Persian, Handloom, with prices ranging from ₹5,000 to ₹50,000 depending on the quality of the raw materials used and the craftsmanship involved. The carpets are exported to the US and Australia.

“The tariff war has left us sleepless,” said Mehboob.

The secondary tariff of 25% on India’s exports to the US kicked in this week, taking the overall tariff to 50%, a level at which almost all Indian exports to the US — pharma and electronics products are exempt from the tariff, for now — will be uncompetitive.

In Bhadohi itself, where 1,400 export-oriented carpet making units employ 800,000 weavers and artisans, that’s bad news.

Shaezib Mehboob, another carpet maker in Bhadohi, pointed out that the US is the largest buyer of handmade carpets. “We don’t face much competition from other Bhadohi manufacturers. The main competition comes from Turkey's machine-made carpets, which are significantly cheaper,” he said.

But buyers prefer handmade ones; only, they will be even more expensive now, and more buyers may move to the machine-made ones. The prices can't be cut further, Mehboob explained -- profit margins are already only 5-10%.

The tariffs have upturned the economics of the business - and of this Uttar Pradesh town.