- With 50 per cent US tariffs on Indian exports having kicked in from August 27, Kashmiri handicraft traders have been left with heavy stocks of unsold inventories affecting the livelihood of artisans associated with the sector.
- Exports of products like Pashmina blankets, shawls and carpet rugs have been badly hit due to the tariff hike.
- Finding an alternative market for high-end products remains a difficult scenario.
The day US President Donald Trump announced the hike in tariffs on Indian exports, forty-year-old Mujtaba Qadri―who has been running his family business of handicrafts exports―felt things were going to be difficult for him. Over a month after the first announcement of tariff hike by the US, Qadri finds exporting to the US a difficult possibility now. The US market has been giving his export trade of Pashmina blankets, shawls and home rugs nearly 80 per cent of the business.
Qadri said that the orders for this fall and winter season couldn’t be shipped to the US after the fresh tariffs. He is not the only handcrafts exporter who has been feeling the pinch of tariffs. In Kashmir, exporters and trade bodies said that the orders, which were placed by US customers before the tariff hike, have not been lifted leaving them with unsold inventories. With the tariffs kicking in from August 27, handicrafts dealers have cut down the number of artisans employed in the trade, which provides jobs to over 4 lakh people across Kashmir.
Qadri said that after the tariffs, the sales for the season of winter and autumn have taken a hit. “We have been shipping the orders in the month of August for fall and winter season to the US, but we have not been able to do that due to the hike in tariffs. The orders have been put on hold. The impact is 100 per cent,” he said. “We ship items only during two seasons in a year, in the summers and for the winters. We have lost one complete season of winter,” added Qadri. According to traders, embroidered home furnishing, carpet rugs and shawls remain more in use in the winter months in the US.
Handicrafts exporters said that it was difficult to find an alternative market for the type of products that they have been selling in the US, which is largely a high-end market. Musadiq Shah, handicrafts exporter and senior vice president of Kashmir Pashmina Organisation, said that finding an alternative market for products like carpets is difficult as there are less takers for such products in trade centres across the world. “I think the US market is dead for us, and it is difficult to consider other markets for the products. The US is a high-end market and for luxurious products like silk carpets, there are fewer buyers outside the US market,” he said.
Shah said that the US forms nearly 30 per cent of the total export market from Jammu and Kashmir. In 2023-2024, the total exports from Jammu and Kashmir were nearly Rs 1,116 crores. “The US remains a major market for the exporters from Kashmir. Our businesses have suffered heavily after the tariffs, and we have not been able to send the orders for autumn and winter periods,” he said.
The tariff hikes have piled up heavy stocks of unsold inventories resulting in job losses too in the industry in Kashmir, several businessmen said.
Pervaiz Ahmad Bhat, a handicrafts dealer, said that he was hoping to receive some orders after attending several exhibitions recently in Delhi and had lined up with some US businessmen who attended the trade shows, but has not received any orders so far.
“We were hit hard by the COVID-19 pandemic and now the tariffs have left us with a number of unsold inventories,” said Bhat.
“If the business scenario continues to remain as grim as it is today, the job losses, in terms of the number of artisans employed in the sector, will be more severe. There were job losses in the sector after COVID-19, and this has continued after the tariffs,” he said. “This is not only affecting the livelihood of artisans, but it would also mean loss of our identity. Kashmir is known for handicraft products all over the world and artisans have been preserving this age-old craft despite odds, but now their survival seems difficult,” said Bhat, who largely trades in the sale of chain-stitch rugs and embroidered products.
Pankaj Koul, who has been carrying on his family business of handicrafts trade, said that he has not received fresh orders for several months now. “We used to send carpet rugs to exporters in Delhi, and the US is a major market for the carpets and other handicrafts products. But now there is a heavy impact on the trade as we are battling with the issue of unsold inventories,” said Koul.
Exporters as well as trade bodies have sought incentives to help them tide over the losses. Javed Ahmad Tenga, president of the Kashmir Chamber of Commerce and Industries (KCCI), who is also a handicrafts exporter to US, said that the sales have been disrupted and the orders ahead of the festive season of Christmas have not been lifted. “Ahead of the Christmas season, there used to be good pipeline of orders, particularly for decorate items and paper-mache products, which is now missing. We would receive advance orders of chain stitch and embroidery items, which is not happening now,” said Tenga.
Tariq Ahmad Shair, a prominent handicrafts dealer, said that the government should provide incentives such as interest waiver and reduce the GST to make handicrafts exports a profitable business. “We are charged GST and now there are these high tariff rates by the US. The handicrafts trade should be exempted from GST as 90 per cent of the cost of the products is on account of the labour charges,” said Shair.