Woolen Carpet Exports Drop 26.6% Despite Historic Strength in Nepal’s Handicrafts

Nepal’s iconic woolen carpets—long considered a flagship of its handicraft exports—faced a major setback in FY 2025/26. Exports dropped by 26.6 percent, with earnings falling to Rs. 820.5 million in one month, compared to Rs. 1.11 billion in the same period last year. This decline highlights the growing struggles of traditional handmade exports in the face of rising competition, shifting global consumer preferences, and lack of modernization in production.

For decades, woolen carpets have been one of Nepal’s most recognized exports, commanding demand in European and U.S. markets. However, changing interior design trends, synthetic alternatives, and higher production costs have eroded competitiveness. Meanwhile, other textile exports such as polyester yarn (+22.5%) are gaining momentum, showing a gradual shift in Nepal’s export structure from traditional handicrafts to industrial products.

This downturn signals the urgent need to revitalize Nepal’s handicraft sector through innovation, branding, and access to premium niche markets. Without targeted support, woolen carpets risk losing their historic role as one of Nepal’s cultural and economic export pillars.