Trump’s 50% tariff puts Kashmiri carpet exports in dire straits

Srinagar, Aug 28: The US President, Donald Trump’s decision to impose a steep 50 percent tariff on Indian merchandise has pushed Kashmir’s famed carpet industry into crisis, with exporters warning that the move could cripple one of the Valley’s oldest and most labour-intensive trades.

With the new tariff regime, Kashmiri carpets now attract 52.9 percent duty in the US, up from just 2.9 percent earlier. Exporters fear the unprecedented jump will make the carpets prohibitively expensive for American consumers, Kashmir’s biggest buyers, who have traditionally shown a strong preference for the Valley’s hand-knotted products.

“This decision is a blow to the Kashmir Carpet Industry, which is battling several challenges already,” said Javid Ahmad Tenga, President of the Kashmir Chamber of Commerce and Industry (KCCI).

“For decades, the US has remained our most important market. A Kashmiri carpet that cost $1,000 in New York will now retail at nearly $1,530 due to 50 percent tariff. Buyers will shy away from paying that much extra, and this makes our products uncompetitive. The hike comes at a time when our industry is already battling global slowdown, rising raw material costs, and the fallout of geopolitical conflicts.”

Tenga urged New Delhi to intervene diplomatically and simultaneously support exporters with immediate relief measures. “The Government of India must raise this issue with Washington, but at the same time, it cannot leave exporters high and dry. We need an incentive package — interest subvention on loans, enhanced export subsidies, and working capital support — to withstand this shock. Without government backing, thousands of artisans will be pushed into unemployment.”

Exporters in Srinagar, Budgam, and Baramulla say orders have started drying up since Washington first signalled the tariff hike earlier this month.

“My clients told me bluntly that with duties exceeding 50 percent, they cannot sell Kashmiri carpets in the American market. I have 20 artisans working under me, and now I have no idea how to pay their wages. This is not just about exporters — it’s about the entire chain of weavers, dyers, and washermen who will suffer.”

Industry analysts warn that the decision could choke cash flows, stall production, and force many units to shut down, jeopardising the livelihoods of nearly 3.5 lakh artisans in Kashmir who depend on carpet weaving.

The crisis is not confined to carpets alone.

According to trade data, other labour-intensive sectors such as woven apparel, diamonds, furniture, and textiles are also reeling under tariffs in excess of 50 percent. Carpets, however, are particularly vulnerable given their dependence on the US market, which accounts for nearly 60 percent of total exports.

The US move is part of a wider trade conflict that escalated earlier this month, when President Donald Trump announced additional duties of up to 25 percent on Indian goods. While sectors such as pharmaceuticals and smartphones remain exempt, traditional crafts have been hit the hardest.

“This tariff wall will undo centuries of craftsmanship,” warned Tenga. “The Kashmiri carpet industry, which has survived wars and political turmoil, may not survive this economic assault unless urgent measures are taken.”