A US paperwork rule stalls Nepal's carpet exports to their biggest market

Nepal's hand-knotted carpet industry, one of its best-known exports, ran into an unexpected obstacle this summer. A mandatory verification requirement from the US Consumer Product Safety Commission, which took effect on 8 July, halted Nepal's carpet exports, the president of the Nepal Carpet Manufacturers and Exporters' Association told Prime Minister Balendra Shah at a meeting on 24 July, according to B360. The Rising Nepal reported that Nepal lacks the facilities needed to meet the new requirement.

The rule itself is not aimed at Nepal. Under it, importers of products regulated by the commission must file compliance certificate data electronically through the US customs system at the moment goods enter the country, rather than keeping certificates on file or sending them with the shipment, according to a summary by the US trade law firm Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt. The data include product identifiers, the safety rules that apply, details of manufacturing and testing, and who certified the product. The firm notes that the rule does not create new testing obligations, but that shipments without the data are likely to face delays and closer scrutiny at the port. Entries from US foreign trade zones follow on 8 January 2027.

For a small exporter, the practical problem is producing the certificate data the American importer must file. That depends on testing and documentation that, by the industry's account, cannot yet be done in Nepal.

What the government promised

The carpet association asked for a one-year grace period, and the prime minister instructed the foreign ministry to send a diplomatic note to US customs requesting it, The Rising Nepal and B360 reported. Shah also directed that wool certification, required three times a month, be made available twice a week, responded positively to a request for a Carpet Development Board, and committed the government to promoting sheep rearing in Karnali and Sudurpashchim provinces for wool and mutton.

The meeting also brought in pashmina makers, plywood manufacturers and makers of dog chews. For pashmina, the government pledged local collection of wool and silk and provincial processing centres.

An industry already shrinking

The disruption comes as the government tries to revive a sector in long decline. In 1999 Nepal exported 2.5m square metres of carpet worth $142m; it now sells about 600,000 square metres worth about $90m, according to figures in a five-year revival strategy reported by Ratopati in July. Volume has fallen by 81.89% over 25 years, but the value per square metre has risen about fivefold as weavers moved to higher-priced designs.

In 2024/25 woollen carpets earned Rs 10.78bn and made up 3.9% of total exports, Ratopati reported, with volume up 13.93% to 472,000 square metres. The industry employs about 300,000 people directly and indirectly, 65% of them women, and keeps about 80% of its value in Nepal. Nepali Times reported in January that Rs 5.69bn of carpets were exported in the first six months of 2025/26, most of them to the United States and the rest to 50 countries. Ratopati reported in April that woollen carpet exports had fallen in the first eight months of the year.

What to watch

The customs figures for the first quarter of 2026/27 will show how far shipments to the US have fallen since July. The other markers are whether Washington responds to the request for a grace period, and whether Nepal builds the certification capacity its exporters say they lack, a gap that will matter more as the country prepares to leave the least developed country group.