Bhadohi Carpet Crisis: A Devastating Breakdown and 5 Steps to Survival

Impact of USA Tariff on State

Bhadohi Carpet: The handmade carpet industry in Bhadohi, Uttar Pradesh, is facing a severe crisis after the United States imposed a 50% tariff on India’s handmade carpet exports. This has led to massive order cancellations, factory shutdowns, wage losses, and a looming threat to the centuries-old craft that provides livelihoods to lakhs of artisans.

KEY POINTS: Impact of USA Tariff on State

Economic Importance of Bhadohi Carpet Industry:

• Bhadohi, along with Mirzapur and Varanasi, forms India’s largest handmade carpet hub.
• Uttar Pradesh contributes 60% of India’s handmade carpet exports (2024-25, CEPC report).
• Around 22 lakh rural artisans are involved in the carpet value chain in the region.
• There are 1,200 registered carpet exporters in Bhadohi (Textiles Ministry data).
• Handmade carpet export industry value: ₹17,000 crore.

Impact of the U.S. Tariff Hike:

• 50% tariff imposed by the U.S. in August 2025, disrupting the sector.
• The U.S. is the biggest buyer, accounting for 58.6% of India’s handmade carpet exports.
• Immediate effects:
  • Sudden cancellation and renegotiation of orders.
  • Wage delays and layoffs, with many workers unpaid or asked to wait indefinitely.
  • Production cuts in factories, leading to economic distress.
  • Threat to centuries-old craft knowledge and cultural heritage.

Historical Significance:

• Carpet weaving in Bhadohi dates back to the Mughal period.
• Mentioned in Ain-i-Akbari by Abu’l Fazl as a prestigious craft supported by Emperor Akbar.
• Carpets are luxury items, priced between ₹5,000 and several lakhs, depending on material and craftsmanship.

CHALLENGES / ISSUES:

1. Trade and Economic Challenges:

• Sudden tariff barrier by the U.S., disrupting 60% of the export market.
• Over-dependence on one major market (U.S.).
• Rising cost of imported raw materials like New Zealand wool, making products less competitive.
• Global economic slowdown, reducing demand for luxury goods like handmade carpets.

2. Livelihood and Social Impact:

• Thousands of weavers and artisans facing wage cuts, unemployment, and financial distress.
• Migrant artisans were forced to return to villages, increasing rural unemployment.
• Growing dependence on local moneylenders, leading to a debt cycle.

3. Structural Issues in the Sector:

• Lack of diversified markets and modern marketing strategies.
• Insufficient government support for skill development and modernization.
• Informal nature of employment, leaving workers without social security or job protection.

4. Cultural Threat:

• The traditional craft is at risk, with younger generations moving away due to low wages and instability.
• Possibility of loss of centuries-old artisanal knowledge.

STEPS NEEDED / WAY FORWARD

1. Trade & Market Diversification:

• Engage diplomatically with the U.S. to negotiate tariff reduction or secure a trade agreement.
• Explore alternative export markets like Europe, Middle East, and Asia to reduce dependency on the U.S.
• Develop domestic markets through campaigns like Vocal for Local.

2. Government Support:

• Provide direct financial assistance or a relief package to affected weavers and exporters.
• Subsidize raw material costs to maintain competitiveness.
• Ensure timely wage support schemes for artisans, similar to MGNREGA for rural employment.

3. Industry Modernization:

• Introduce design innovation hubs in collaboration with IITs and NIFT to modernize carpet designs.
• Promote digital platforms for e-commerce, enabling direct export and cutting out middlemen.
• Establish quality certification and branding, such as Geographical Indication (GI) tags.

4. Skill Development & Social Security:

• Launch training programs for young artisans to preserve traditional skills.
• Provide health insurance, pensions, and minimum wage protections to weavers.
• Formalize the workforce to bring them under government welfare schemes.

5. Cultural Preservation:

• Promote Bhadohi carpets as heritage products through exhibitions and global branding.
• Set up carpet museums and craft centers to attract tourism and raise awareness.

CONCLUSION

The Bhadohi carpet crisis reflects vulnerabilities in India’s export-driven craft sectors due to global trade shocks. Immediate government intervention, diversification of markets, and structural reforms are essential to protect livelihoods, preserve cultural heritage, and ensure the long-term sustainability of this globally acclaimed craft.