Kashmiri shawl exports surged to ₹588.23 crore in FY26, driven by strong global demand for Pashmina. However, traditional crafts like hand-knotted carpets and papier-mâché continue to see falling export values, signaling an uneven recovery for the region's handicraft sector.
Kashmir’s handicraft sector is witnessing a sharp divide in performance. While shawl exports doubled during the 2025-26 fiscal year to reach ₹588.23 crore, traditional segments such as carpets and wooden carvings have faced significant declines. This uneven growth pattern raises questions about the long-term health of the broader handicraft industry in the region.
Shawl Export Growth and Market Dynamics
The surge in shawl exports from ₹305.52 crore in 2024-25 to ₹588.23 crore in 2025-26 represents a major shift in the region's export basket. According to data from the Directorate of Handicrafts, Export Promotion, shawls now account for more than 70% of total handicraft exports from the Valley. This growth is largely attributed to high international demand for premium products, particularly Pashmina shawls, in North American, European, and Gulf markets. Part of this increase also stems from the clearance of export orders that had been held up due to previous logistical challenges, alongside more active participation in international trade exhibitions and the use of digital platforms to reach global buyers.
The Decline in Traditional Craft Segments
While the shawl segment shows resilience, other vital areas of Kashmir's artisan economy are struggling. Hand-knotted carpet exports, historically a significant contributor, have fallen to ₹123.31 crore in 2025-26, down sharply from ₹260.71 crore in the previous year and ₹317.33 crore in 2023-24. Similarly, segments like papier-mâché and walnut wood carvings have seen their export numbers dip. Industry voices, including the Kashmir Economic Alliance, have noted that this performance gap reflects a fragile recovery. The decline in these traditional crafts directly affects thousands of artisan families who rely on these specific trades for their income.
Future Monitorables for the Sector
The primary concern for stakeholders is whether the current growth in the shawl segment can be sustained or if it will remain an isolated success. For investors and industry observers, the key monitorable is whether government-led strategies can diversify export growth to include the lagging carpet and wood-carving sectors. The sustainability of the export trend will depend on ongoing efforts to address logistical hurdles and the ability to maintain demand for premium products in competitive global markets. Further updates from the Directorate of Handicrafts regarding sector-wide support measures and export targets for the coming fiscal year will be essential to track.