You can take it to a carpet dealer. They should be able to bind the edge for you.

It you love this rug take it to a professional. It will look great and last many years. I area rugs made from carpet remnants and they were affordable and attractive, lasted for years.

The binding process is called 'serging' and it create the stitching on the outer edge of the carpet. I think you need to have it or you will fray pretty quickly. Shop around for good prices though -- I went to a popular carpet cleaner/restorer in my area and their prices to re-serge an older carpet were pretty high.

Home depot does it as well and if you're in manhattan, there's a service in the bronx that picks up and delivers back to you. Found some excellent remnants from a neighbor's re-do. Snuck it home from the garbage room and had them cut and re-sized /recycled for a friend's apt.

Are the rooms in your apartment really so small that you can't use this rug in one piece?

Even if it's slightly too long to fit within a room, you can let one end roll up the wall behind a sofa or bed a few inches where it will be unseen - and when you move, you'll still have a nice generously-sized carpet.

...no one's made the obvious pun on the title of this post?
"Cut a rug?" ...Really?
:D

It really depends on the way the carpet was woven. Look at the bottom - if it's been glued, you might be okay if you work quickly. If you tape on the top and bottom of where you want to cut, that can help, too.
Were it me, I'd tape it with masking tape, cut it, and then with the tape still in place, I'd run a tight zigzag over the edge with my sewing machine to serge it.

Yep, what the others said. Call around and find a carpet retailer who will cut and bind it for you. This is not a DIY project.

Thanks for the responses & advice guys. I'm SO glad I didn't go willy nilly on it before checking in with the gurus (that's you). I've decided to leave it as is... for now anyway :)

I think that you should shop Rugman dot com when buying your next Indian rug or carpet.