The traditional rug weaving area of India is concentrated around the carpet belt near Varanasi. The carpet belt spans an area between Varanasi, Bhadohi, and Mirzapur. The vast majority of rug production in this area takes place using traditional hand knotting skills in small loom sheds, or village homes. Many of the village weavers work seasonally, combining rug weaving with agriculture.

However, in recent years, rug production in India has become more industrialised, moving away from the villages to factory based, production in an area north of Delhi called Panipat. This has created a migration of workers from the villages and away from the traditional looms. The factories can vary in size between 60 and 3,000 employees. Smaller rug producing areas include Agra and Chennai.