Woolen Carpet Exports Decline 26.3%: Nepal’s Handicraft Industry Faces Setback Abroad

Nepal’s woolen carpet exports dropped by 26.3% in FY 2025/26, falling from Rs. 1.09 billion to Rs. 820.5 million, according to the latest trade data. This decline marks a major setback for Nepal’s handicraft industry, which has long relied on carpets as a flagship export, symbolizing craftsmanship and cultural heritage.

The fall is attributed to declining demand in European and American markets, where Nepalese carpets once held a strong reputation. Competition from machine-made alternatives, rising global shipping costs, and lack of aggressive branding have all weakened Nepal’s market share. Additionally, disruptions from the Gen Z movement protests and production challenges created supply chain inefficiencies that further reduced exports.

Despite this drop, experts suggest that Nepal still has opportunities if it focuses on niche luxury markets, leverages organic and fair-trade certifications, and enhances digital marketing strategies to reach premium buyers. Without such reforms, however, the traditional handicraft sector may continue to struggle against cheaper global substitutes.