Until 2050/051 BS, carpets were the number one export product of Nepal. Annual exports were worth 13 to 14 billion. Carpets accounted for almost 60 percent of the export trade. By 2052 BS, the export trade had dropped to 10 billion.

At that time, the main destination for carpet exports was Germany. But the export trade was shrinking due to the message that carpets were woven using child labor in Nepal. Internally, some people were constantly raising voices such as carpets causing pollution and water shortages within the country. The issue of child labor had been raised very urgently. This had started to reduce trade in the US, Europe and Germany.

Along with Nepali organizations, a foreign organization called Ragmarg had also raised the issue of child labor in carpet weaving. Therefore, the issue of child labor had reached the international level. Due to the lobbying of the organizations, Germany's Panorama Television had made a documentary on child labor and promoted it.

At a time when the carpet industry, which was earning foreign exchange and employing thousands, was collapsing, the then Prime Minister Manmohan Adhikari had said that he was against the trend of sending carpets out of the valley on the pretext of water shortage and environment in Kathmandu. He had said, ‘I am strongly against the practice of blaming for pollution.’

Speaking at the general meeting of the Central Carpet Industry Association held in Kathmandu on 24 Baisakh 2052, Prime Minister Adhikari had raised the issue of child labor and expressed dissatisfaction that the carpet industry was in crisis. He had said, ‘Where in the world has child labor not been used? We know that. How many child laborers were there during industrialization in Western countries? I have told this to my diplomatic friends in Germany.’

Adhikari had said that if he looked at every export item through European eyes, Nepal would not be able to export any item. However, Adhikari had suggested that entrepreneurs should also take care of child labor and the environment. At that time, the government was earning more than 200 million rupees in revenue annually from carpet export fees.