Iran’s handwoven carpet exports, once thriving at $426 million annually, have plummeted to under $40 million in just seven years, prompting government intervention, amid sanctions and rising regional competition.
India has taken over as the dominant player in the global carpet market, capitalizing on Iran’s declining exports and securing the US market, which accounts for 44% of global carpet imports, Morteza Haji Aghamiri, chairman of the Carpet Commission at Iran’s Chamber of Commerce, told the Iranian Labour News Agency (ILNA).
Aghamiri added that Iran’s carpet exports, valued at $426 million in 2017, had plummeted to just $39.7 million by March 2024.
Official reports last March revealed that Persian carpet exports had reached their lowest level in 24 years. This decline, however, has been years in the making. In 1994, Persian carpets generated over two billion dollars for Iran, yet by 2019, exports had dropped to $69 million, plummeting further to just two million dollars in the second quarter of 2020.
Sanctions and currency regulations—specifically, the now-repealed “foreign exchange commitment policy,” which required exporters to repatriate earnings within a specified period—have been primary obstacles, Aghamiri said. Even with the policy’s repeal, exports remain constrained. “The competition from India, Turkey, and Afghanistan has only made things worse,” he added.
Adding to the challenge, Afghan carpets smuggled into Iran have flooded the domestic market. Aghamiri explained that US investment in Afghanistan’s carpet industry before the 2021 withdrawal, fueled production, making lower-quality Afghan carpets a growing presence in Iran’s markets, often sold as Iranian products.
The steep fall in exports has significantly impacted jobs across the carpet sector, exacerbating unemployment in Iran’s rural areas. Aghamiri also highlighted the lack of social insurance for carpet weavers and registered artisans, depriving them of minimum wages and benefits. He added that these issues have led to the loss of two million jobs in Iran and reduced production and exports in the handwoven carpet industry.
Committee to revive carpet exports
In response to the industry’s difficulties, Iran’s foreign minister Abbas Araghchi said that the government intends to form a special committee to address these export challenges.
On Friday, during a visit to the 31st Tehran International Handwoven Carpet Exhibition, Araghchi called on officials to support the production, sale, and export of Iranian carpets. “The vitality of Iranian carpets depends on exports,” he said, emphasizing that the committee will work to remove obstacles hindering the industry.
While sanctions are a significant factor, Araghchi highlighted the need to ease Iran’s export regulations as well.
To boost Iranian carpets abroad, the foreign ministry has instructed embassies to promote exports. “The foreign ministry’s economic department has been tasked with expanding markets for Iranian products, especially carpets,” Araghchi said. He also called for a comprehensive policy to guide each government agency’s role in supporting the industry.
Data from the Trade Ministry show that the export of traditional Iranian hand-woven carpets in 2001, when nuclear sanctions against Iran had not yet been imposed, was more than half a billion dollars, over a quarter of which was imported by the United States, with Germany, Lebanon, and Britain as other major customers.
The exports picked up again in 2017, immediately after the implementation of Iran's 2015 nuclear deal with world powers, the Joint Comprehensive Plan of Action (JCPOA). But exports started to fall again after the US withdrawal from the deal in 2018 when Washington reimposed sanctions on the import of Iranian rugs.
With President-elect Donald Trump taking office in January 2025, it remains to be seen whether President Pezeshkian’s administration’s proposed committee can revitalize the industry under a new wave of potential sanctions.
This announcement by Abolhassan Mahdavi, the temporary Friday prayer leader in Isfahan, comes amid heightened tensions between Israel and the Islamic Republic and concerns over the possibility of Khamenei being assassinated by Israel. It is not the first time that a senior cleric makes a similar statement, but the timing on this occasion provokes more questions.
Concerns over Khamenei's assassination
Even before the recent escalation between Israel and the Islamic Republic, discussions about Khamenei’s succession were already ongoing. These concerns have now intensified. In recent meetings with the Assembly of Experts, the body responsible for selecting the next Supreme Leader, Khamenei urged members to be ready to swiftly choose a successor if needed. Analysts interpret these remarks as stemming from his fear of an Israeli assassination rather than concerns about natural causes.
During Friday prayers, Mahdavi emphasized that Khamenei is physically healthy, showing no signs of illness. This reinforced the view that what the establishment is most concerned about is external threats.
A "Martyrdom" atmosphere in recent Assembly meeting
Assembly member Heydari Kashani described Khamenei’s recent meeting with the Assembly of Experts as taking place in an atmosphere of “martyrdom.” According to Kashani, participants wept as Khamenei emphasized the need for the Assembly to quickly select a new leader in his absence. This underscores concerns about potential unrest and the heightened risk of the regime’s collapse without Khamenei.
Mojtaba Khamenei: The leading candidate
Mahdavi disclosed that three candidates have been selected as potential successors, though their identities remain confidential. Among them, Mojtaba Khamenei, the second son of Ali Khamenei and his most politically influential offspring, is widely regarded as the leading contender.
Mojtaba has reportedly been groomed for leadership with his father’s approval. For over 27 years, he has played a behind-the-scenes role in shaping major policy decisions. Close associates, such as Abbas Palizdar and former IRIB head Mohammad Sarafraz, have also confirmed Mojtaba’s influence. His recent suspension of his advanced jurisprudence classes and the release of his first official video further signal preparations for a power transition.
Alireza Arafi: A likely second choice
Another potential candidate is Alireza Arafi, a trusted confidant of Khamenei. Arafi is the second deputy chairman of the Assembly of Experts, a member of the Guardian Council, Friday prayer leader of Qom, and an influential figure in the seminary. His position within the power structure enhances his chances of being chosen.
Hashem Hosseini Bushehri: A third possibility
The third likely candidate is Hashem Hosseini Bushehri. He is the first deputy chairman of the Assembly of Experts, the head of the Qom Seminary Society, and Friday prayer leader in Qom. His close ties to Khamenei and key leadership roles increase his prospects. In contrast, figures like Mehdi Mirbagheri, despite significant media coverage, are considered less likely candidates.
Unlikely candidates
Names such as Ali Khomeini and Hassan Khomeini, grandsons of Ruhollah Khomeini (the founder of the Islamic Republic), have also been mentioned. However, their prospects are slim due to their exclusion from the regime's upper echelons. Hassan Khomeini was effectively sidelined after being barred from running for the Assembly of Experts nine years ago.
Hassan Rouhani faced a similar disqualification, while Sadeq Larijani, the current chairman of the Expediency Discernment Council, failed to win a seat in the Assembly of Experts during the last election. Additionally, Larijani’s resignation from the Guardian Council reportedly displeased Khamenei, further diminishing his chances.
Former president Ebrahim Raisi, who served as president and first deputy chairman of the Assembly of Experts, died under suspicious circumstances in a helicopter crash a day before the election of the Assembly’s new chairman in May. Meanwhile, Ayatollah Ahmad Khatami, who criticized the promotion of Mojtaba Khamenei’s leadership at the Assembly meeting, was immediately removed from the Assembly’s presidium.
Broader challenges for the establishment
While Mojtaba Khamenei is considered the most likely successor, the regime faces far greater challenges than leadership transition. Escalating tensions with Israel, the re-election of Donald Trump, and mounting public discontent over chronic shortages of electricity, natural gas, and fuel have placed the regime's survival in jeopardy. Growing frustration with government inefficiency, mandatory hijab laws, and internet restrictions has only deepened public anger and unrest.
In Yasuj, southwestern Iran, a group of nurses and healthcare staff gathered to demand improved working conditions and wages.
Simultaneously, emergency personnel in Shiraz protested outside the Fars provincial governor’s office. Their demands, outlined by the Coordination Council of Nurses’ Protests, included inflation-adjusted salaries, special allowances, recognition of hazardous job conditions, and job security.
Healthcare workers, critical during the COVID-19 pandemic, have repeatedly protested in recent years over broken promises, amid persistent 40% inflation and stagnant salaries since 2019.
On Saturday, nurses at Loghman Hospital in Tehran voiced frustrations over unpaid wages and overtime, echoing broader discontent that saw work stoppages in over 70 hospitals across 50 cities earlier this year.
Retirees and workers raise economic concerns
In Tehran, oil industry retirees protested outside the National Iranian Oil Company, chanting, "The retiree's refrigerator, emptier than ever," and decrying their financial hardships. A former minister, Ali Rabiei joined the workers in solidarity.
Social Security retirees held demonstrations in the southern cities of Ahvaz and Shush, with slogans such as "Enough with warmongering, our tables are empty," and "Forget the headscarf, tackle inflation."
The steel industry retirees in Isfahan joined the wave of protests, gathering in front of the Steel Retirement Fund building to criticize deteriorating living standards.
A separate protest by retired educators took place on Saturday in front of the Presidential Office in Tehran. Holding 100,000 rial notes, criticizing the government’s failure to implement salary equalization laws. The banknote that would have been worth around $1,500 before the 1979 revolution is now worth just 15 cents.
Public transport drivers demand resolution
In Zahedan, Sistan-Baluchestan Province, public transportation drivers protested the month-long deactivation of their fuel cards. Despite assurances from provincial officials to resolve the issue, drivers claim no action has been taken. Their demands highlight the government’s inability to address even basic logistical challenges affecting livelihoods.
These protests reflect a broader crisis as citizens face increasing economic pressures amidst rising inflation, wage stagnation, and government inaction. Retirees, in particular, have held repeated protests over years, lamenting the worsening value of pensions and unfulfilled promises.
The consistent surge in demonstrations underscores mounting dissatisfaction with Masoud Pezeshkian’s administration, as workers and retirees across sectors demand the government address their grievances.
A resolution by the Economic Council, published Sunday, instructed the Ministry of Oil to create household gas tariffs designed to discourage overconsumption. The move includes categorizing more households as high-consumption users.
“The Ministry of Oil must ensure these tariffs have evident deterrent effects for excessive and unnecessary consumption,” the resolution read.
The tariff changes come alongside scheduled power outages initiated on November 10 due to insufficient fuel reserves. The government had halted mazut burning at select power plants but now plans to restart its use across industries and provincial power stations, sparking public health and environmental concerns.
Citizens, who already contend with heavily subsidized but rising energy costs, now face worsening air quality as mazut—a fuel laden with sulfur and toxins—fills the gap left by dwindling natural gas supplies.
Iran’s decision to calculate residential gas tariffs comes as part of broader fiscal policies to generate additional revenue. Under the new structure, commercial tariffs will also rise, with calculations based on recent peak rates.
Abbas Kazemi, former CEO of the National Iranian Oil Refining and Distribution Company, blamed mismanagement for the fuel shortages. Speaking to ILNA news agency, Kazemi said that critical diesel reserves were depleted after being sold on the stock market.
“Instead of stockpiling diesel for winter, the Abadan Refinery sold 400 to 500 million liters meant for power plants,” Kazemi said.
This mismanagement, coupled with a 36% decline in mazut and diesel reserves compared to last year, has pushed Iran’s electricity grid to a critical juncture. Reports indicate that natural gas supplies to power plants in November have plummeted by 30% year-on-year, leaving thermal power stations—responsible for 80% of Iran’s electricity generation—dependent on low quality mazut.
Speaking to Khabar Online on Sunday, Hadi Haghshenas, an economic expert and the governor of Gilan Province, said: "The lack of electricity primarily stems from insufficient gas supplies. The shortage of gas, in turn, is a result of inadequate investment in the country. The imbalances in the nation are turning into a tangled web, growing increasingly complex."
The use of mazut exacerbates air pollution. High levels of particulate matter from mazut burning increase the prevalence of respiratory and cardiovascular diseases.
“The government’s reliance on mazut is forcing citizens to endure air pollution on top of power outages,” said Mohammad Jafar Ghaempanah, a senior government official, who also suggested reducing household energy consumption as a solution to outages.
As winter approaches, Iranians face an unprecedented convergence of crises with spiraling utility costs, power shortages, and public health risks in spite of being a nation endowed with vast natural gas reserves.