Bhadohi, famous as a carpet-weaving centre, gets its name from Bhar Raj of the region, which had Bhadohi as its capital. Traces of its origin can be found in the names of ruined mounds and old tanks named after the Bhar rulers who were part of the Kannauj kingdom. The Bhadohi district is the biggest carpet-manufacturing centre in India, mostly known for its hand-knotted carpet. Known as the ‘Carpet City’, the Mirzapur-Bhadohi region is the largest handmade carpet-weaving cluster, engaging around 3.2 million people in the industry. Bhadohi alone employs 22 lakh rural artisans in its 100 percent export-oriented industry, which accounts for about 75 per cent of the Rs 4,400 crore total carpet exports from India, exporting carpets worth Rs 2,500 crore (approx) in 2010. Carpet weaving in the region dates back to the 16th century, during the reign of Mughal Emperor Akbar. It is believed that weaving in this region was established centuries ago by Iranian master weavers while travelling in India, stopped at Madhosingh village, near Khamaria, in Bhadohi and set up looms here.

Each manufacturing region across India has its own specialty in carpet designing. Kashmir specializes in weaving elegant hand-knotted silk and woolen carpets. Agra specializes in producing high quality hand-knotted Persian, Turkish carpets using natural dyes. The Bhadohi-Mirzapur belt in the state of Uttar Pradesh produces maximum number of carpets in India. This region also produces carpets of all designs and quality. Majority of the carpet weavers are established in this area.

Bhadohi - Mirzapur, Panipat, Jaipur and Agra form the prime carpet manufacturing areas in recent times. The growth and the spread of this industry are partially attributed to the caste and village system unique in rural India. This industry is primarily rural in nature with minimal requirements.  From the early times, carpet weaving had been traditionally done by the Muslim community and was practiced besides agriculture. The households had a loom at its disposal where in the family members tried their hands whenever they were left with spare time.

With passage of time, this industry has modernized itself with the introduction of technology and discarding the primitive handmade tools, which used to absorb a lot of time and labor.

In 2010, the carpets of the UP region received the Geographical Indication (GI) tag, which means carpets manufactured in nine districts of the region, Bhadohi, Mirzapur, Varanasi, Ghazipur, Sonebhadra, Kaushambi, Allahabad, Jaunpur and Chandauli would be tagged with 'handmade carpet of Bhadohi'. The production of the Bhadohi carpets is aimed at exporting to foreign countries.

Well known carpet types from Bhadohi include cotton Dhurry/Dhurries, Chhapra Mir carpets, Loribaft, Indo Gabbeh but also Nepalese carpets and more recent shaggy type carpets. They are manufactured in various qualities. The popularity of the Bhadohi carpets led to the formation of the All India Carpet Manufacturers Association (AICMA) in the year 1985 by manufacturing and export firms for promotion of exports and handling of buyers who play with price by quoting lower price of competitors.