Bita Ghaffari in Tehran

Financial Times

Iran’s handwoven carpet industry is suffering an unprecedented decline, with exports falling to their lowest levels on record because of US sanctions and domestic regulations on foreign currency.

Iranians in the business of Persian rugs — which are renowned for their artistry and craftsmanship — said instability in the region had also contributed to the collapse. Production of the rugs, whose history dates back millennia, has shrunk to a fraction of the levels in past decades as Iran loses its dominance in the global market.

That has badly hurt local businesses. “The costs of making a carpet are high and the profits low,” said Akram Fakhri, 45, a weaver in Kashan, a city known for its fine craft.

She said she needed to invest $250 to buy the wool and silk for a carpet, then spend a whole year weaving it. If it turns out perfectly, she can hope to sell the rug for more than $600, she said.

Fakhri said she was becoming exhausted in the absence of social security protection or government support. “I work with constant back and leg pain. But hiring an assistant weaver is beyond my means.”

Carpet exports are set to drop below $40mn in the year to March 2026, down from $41.7mn the previous year, according to the Carpet and Handicrafts Commission of Iran’s Chamber of Commerce.

Morteza Haji Aghamiri, chair of commission, said export figures had been below $100mn — “so meagre we can say it is practically zero” — for six years running, down from a peak of more than $2bn three decades ago.

Featuring elaborate floral and medallion patterns, Persian carpets have strong regional links; the more intricate, the longer they take to weave. Rugs made in the holy city of Qom are highly prized, while mastering refined designs from the northwestern city of Tabriz takes years of practice, said experts. Tribal carpets from the nomadic Qashqai and Bakhtiari groups feature distinctive geometric motifs and bold floral patterns.

An all-silk, six-square-metre Qom design, one of the most valuable, takes at least a year and a half to weave and sells for $10,000 to $30,000, said Mohsen Shojaei, a carpet businessman in Mashhad.

A major blow to the industry came in 2018, when Donald Trump — in his first term as president — withdrew the US from a pact that limited Iran’s nuclear programme in exchange for looser sanctions, and began a “maximum pressure” campaign of fresh punitive measures.

As sanctions led to a shortage of foreign reserves, Iran’s government has since 2018 obliged exporters to sell part of their foreign currency revenues to the central bank at the official exchange rate, rather than more favourable rates available on the open market.

Business groups said that had led to a sharp decline in the number of carpet exporters.

Abdollah Bahrami, chair of the National Union of Handwoven Carpet Co-operatives, said the regulation “completely paralysed the sector. None of them have any motivation to stay active in global markets.”

Iranian carpets were formerly exported to about 80 countries, but today destination markets are limited to the UAE, Germany, Japan, the UK and Pakistan. As Iran lost many of its traditional markets, competitors from Turkey, India, China and Afghanistan moved into the gap >>>