US Tariffs Deal Heavy Blow to Indian Administered Kashmir’s Handicrafts Industry

Srinagar, September 2025 – The decision by the United States to impose a 50% tariff on Indian exports from August 27 has sent shockwaves through Kashmir’s fragile handicrafts sector, an industry that sustains the livelihood of over 400,000 artisans.

Exporters say the new trade measures have made it nearly impossible to send Kashmiri products to the American market, leaving warehouses piled high with unsold goods and forcing cutbacks in employment. Families that depend entirely on this centuries-old craft are now staring at an uncertain future.

Among the hardest hit are pashmina shawls, woollen blankets, embroidered furniture covers, and silk carpets – traditional products that are shipped annually to the US for the autumn and winter sales season. Traders note that the timing of the tariff has multiplied losses: with the festive and winter markets approaching, consignments have stalled and an entire sales cycle has collapsed.

For decades, the US has been a leading buyer of Kashmiri handicrafts. In the financial year 2023–24, America accounted for nearly 30% of Jammu & Kashmir’s total handicraft exports, valued at ₹1,116 crore. For many exporters, US orders formed the backbone of their annual revenue. With those orders frozen, the sector is scrambling to find alternative markets – but global demand for high-value handmade items like silk carpets and embroidered shawls remains limited.

This crisis comes at a time when the industry is still recovering from the aftershocks of the COVID-19 pandemic. Traders who recently attended exhibitions in Delhi said American buyers have completely withdrawn, leaving unsold stock to pile up.

Artisans from Srinagar to smaller craft hubs report a sharp decline in new orders. Carpet weavers, papier-mâché artists, and crewel embroidery workers are among the worst affected, with many workshops operating at less than half their usual capacity.

Facing mounting distress, industry associations are calling for immediate support measures: interest subsidies, GST reductions, and a special financial relief package to cushion the blow. Exporters warn that if swift action is not taken, the crisis could result in permanent damage – not only to livelihoods but also to the preservation of Kashmir’s unique handicraft heritage, which has endured for centuries despite adversity.

With the festive season in Western markets drawing near, the outlook remains grim. Traders fear that without urgent intervention or access to new international markets, the losses could cripple the sector for years to come.