While the majority of goods in Nepal are imported, the carpet industry has emerged as a beacon of hope. Carpets produced in Nepal have gained popularity not only in the domestic market but also internationally. These textile floor coverings are now exported to around 50 countries worldwide. According to the Department of Customs, a total of 832,517 square feet of carpets, valued at Rs 3.91 billion, were exported in the first four months of the current fiscal year (FY 2024/25). The Nepal Carpet Manufacturers and Exporters Federation reported that around 60 percent of carpets exported from Nepal are destined for the U.S. market. Hand-woven carpets, in particular, are in high demand globally due to their superior quality. This momentum in exports needs to be sustained with adequate support measures. Since carpets rank second among Nepal's most exported items, government agencies must facilitate exports to help offset the current trade deficit. Currently, raw materials for carpets are imported from China, New Zealand, and India. There is significant potential to boost the industry if the government supports domestic raw material production and expedites the payment of the five percent export subsidy it has announced to the carpet manufacturers.
There are compelling reasons to promote carpet exports. While soybean oil is Nepal's top export, its value addition is relatively low, as the raw materials are imported before being re-exported. In contrast, carpets represent the leading export item with the highest value addition—80 percent of the value is added in Nepal itself. Carpets are custom-made and exported based on designs provided by customers, offering an opportunity to increase its exports. Of the 50 countries where Nepali carpets are exported, the U.S. accounts for the largest share. Data shows that carpets worth Rs 2.3 billion out of the total Rs 3.91 billion in exports were shipped to the U.S. in the first four months of the current fiscal year. In addition to the U.S., Nepali carpets are exported to diverse markets, including Australia, Austria, Belgium, Brazil, Canada, China, the Czech Republic, Denmark, Finland, France, Georgia, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Korea, Kuwait, Lebanon, the Maldives, Mexico, the Netherlands, Norway, Oman, Portugal, Qatar, Russia, Taiwan, Thailand, Turkey, Dubai, the U.K., Uruguay, and others. Traders have reported that implementing an online payment system would make it easier to expand the market for Nepali carpets in the US. The government agencies and the central bank play important roles to establish an online payment system to further promote its export.
Call to promote export of Nepali carpet
Nepal’s carpet industry saw its heyday in the 1990s, but exports sharply declined in subsequent years due to issues such as child labor. However, the recent growth in exports indicates the potential to revive the 1990s' success. To achieve this, carpet exporters must focus on producing high-quality products and avoid unfair competition. Challenges such as a lack of skilled workers, modern technology, and effective market promotion have hindered Nepal from realizing the industry's full potential. Given that 80 percent of the value addition occurs in Nepal, the government must introduce supportive measures to boost exports. This would not only help reduce the ballooning trade deficit but also create significant employment opportunities within the country. Maintaining quality will ensure continued growth in exports, contributing substantially to Nepal’s economy. Carpet production would increase significantly with necessary government support. Currently, some raw materials, such as wool from sheep raised in the high Himalayan regions, are used in production, along with silk, silk fibers, and yarn. Farmers in the high Himalayan regions could be supported in sheep farming to ensure a steady supply of raw materials. Moreover, timely disbursement of the five percent export subsidy announced by the government would further encourage carpet manufacturers to expand their businesses.
