SRINAGAR: As the war in West Asia disrupts demand, shipments and payments across the Gulf, Kashmir’s ₹800 crore handicrafts industry is seeing orders stall, cash get locked up and livelihoods fray—exposing its deep reliance on export markets.
In Eidgah’s Narwara locality, Pashmina weaver Rauf Ahmad Qureshi, 54, keeps one eye on his loom and the other on television updates from the Gulf, where demand for his work is shaped. “We get work through traders, so any crisis impacts us quickly,” he told Mint. “An artisan lives hand to mouth. If orders stop even for a few days, it becomes difficult to manage daily expenses.”
A third-generation artisan, Qureshi produces shawls, stoles and embroidered pieces for buyers in the Gulf and Europe. Like thousands of others, he sits at the end of a labour-intensive chain that begins with sourcing Pashmina wool from Ladakh ends in global luxury markets.
That chain is now under strain. The conflict involving Iran, Israel and the US has hit the Gulf—Kashmir’s largest market, accounting for roughly 50-60% of exports—slowing orders, delaying payments and pushing up logistics costs.
Demand shock in key markets
Exporters say the disruption has been swift. “Orders have almost stopped. Buyers are not thinking about carpets or handicrafts right now. They are thinking about survival,” said Srinagar-based carpet dealer Fayaz Ahmad Shah, referring to key markets such as Qatar, Kuwait and the United Arab Emirates (UAE).
Uncertainty is also curbing business travel and fresh deals. “We think multiple times before travelling to the Gulf now. Buyers have told us to wait before the situation turns normal. Most of our large commissions come from these markets. If that pipeline stops, everything slows down,” Shah said.
The impact extends beyond the Gulf. In Srinagar’s downtown, designated a UNESCO Craft City in 2021, exporter Shahnawaz Ahmad Sofi says demand, logistics and payments are all under pressure. “Fresh orders have slowed sharply, freight costs have surged, and payments are getting delayed. Every buyer is in a dilemma.”
“My orders go to multiple countries. But when a conflict of this scale happens, it impacts several markets at the same time. Even if the war stops, the impact will not disappear immediately,” Sofi said.
Supply chain snarls
Logistics providers report a similar squeeze.
Sheikh Samiullah, co-founder of courier firm FastBeetle, said rising freight costs, higher insurance premiums and uncertainty have made deliveries difficult. “Shipping has become expensive and unpredictable. Therefore, we are not able to deliver products, including handicraft items, to the Gulf.”
For online sellers, the hit has been sharper. Muheet Mehraj, founder of Kashmir Box, says the Gulf Cooperation Council (GCC) region is central to the company’s business. “We have seen an 80-85% drop in sales. Our business in the Gulf is 100% hit.”
The company has paused online marketing and deferred expansion. “We were planning to open an offline store in the Gulf with expected business of ₹2-3 crore, but that has now been deferred due to the current uncertainty.”
The stress is spilling into policy discussions. Industry bodies have flagged delayed payments, stalled shipments and rising costs to the Directorate General of Foreign Trade, warning of a liquidity squeeze. Estimates suggest ₹300–500 crore of working capital is locked up.
Officials say the impact is already visible. “There is a 10-15% hit at present. If the conflict continues and demand falls further, it will impact the entire chain, from artisans to exporters,” said Abdul Hameed Rather, a handicrafts training officer.
Smita Nagarkoti, director, Carpet Export Promotion Council (CEPC), said the disruption is immediate but its full effects will lag. “It is not just freight and logistics that have been affected. Even raw materials and shipments are facing delays, and the disruption is immediate. The real shockwaves will be felt over the next two to three months, even if the conflict stops.”
The uncertainty has also forced the postponement or cancellation of key trade events, including exhibitions in China, Copenhagen, the Netherlands and the UAE, as well as the Indian Carpet Expo scheduled in New Delhi in April.
“This is a large war, and both buyers and sellers think multiple times before engaging. People during such tough times spend on essentials, not on luxury items like handicrafts, so naturally our products will face a hit,” said Sheikh Ashiq, member of the CEPC’s Committee of Administration.
“Buyers need to stabilize first, and the post-war impact is going to remain for a long time. There is uncertainty across global markets, and many buyers are not ready to participate,” Ashiq said.
A fragile industry
The latest disruption compounds a decade of shocks. Handicraft exports have fallen from around ₹1,700 crore in 2013 to ₹733 crore in 2024-25, hit by the 2014 floods, the 2016 unrest, demonetization, and the pandemic. More recently, the Russia-Ukraine war disrupted demand cycles, while US tariffs of up to 50% on Indian goods have squeezed margins.
Policy changes have also weighed on the sector. Exporters point to the introduction of the Goods and Services Tax (GST) in 2017, initially set at 12% for handicrafts, as a major setback, even though the rate was later reduced to 5%.
With limited access to credit and weak institutional support, the strain is accelerating a labour crunch. Low wages, lack of social security and the physically demanding nature of the work are pushing younger generations away.
“Due to repeated shocks, low wages and lack of support, our children are not willing to take this craft forward. With low returns and limited social security, many artisans are moving away from traditional work,” said Maqbool Jan, a papier mâché artisan in Lal Bazar. “We do not even have the basic support that workers should get. It has become difficult to sustain this craft.”
“If the government does not step in to support the handicraft industry now, it may become too late to revive it. Artisans need sustained support and handholding,” Ashiq added.
The sector supports about 445,000 artisans in Jammu & Kashmir, many of whom depend directly on export demand.
“This work has become uncertain, and the Gulf war is the latest blow,” Qureshi said. “If orders stop, artisan families will be left struggling to run their homes and even afford medicines.”
For now, the looms continue to run, but in an industry tied tightly to global markets, a war thousands of miles away is dictating whether the next order arrives or the loom falls silent.