Preserving Our National Heritage: Handloom Sector Challenges and Solutions


We, the people of India, view our clothing as more than just attire. It carries our emotions, love, and loyalty, deeply rooted in our traditions and culture.

Background of this sector:

India proudly exports about 95% of the world’s hand-woven fabric, making handweaving a significant contributor to the Indian economy, employing approximately 43 lakh weavers. Encouraging increased consumption by 5% can lead to a 33% revenue growth.

On August 7, 2015, India declared National Handloom Day, commemorating the 1905 Swadeshi movement. This movement marked the formal proclamation of boycotting British products and reviving domestic production processes.

Challenges faced by the Indian handloom sector:

  1. Market Reality: India’s handloom industry grapples with outdated technology, rigid labor laws, infrastructure bottlenecks, and fragmentation. Demonetization and GST hit the unorganized and small players.
  2. Global Policies: India faces pressure to end export subsidies for handlooms as per WTO’s Agreement on Subsidies and Countervailing Measures. Existing subsidy schemes may be affected.
  3. Demand for MMF: The global market favors manmade handlooms and garments over cotton. India lags due to unavailability of affordable manmade fibers.
  4. Free-Trade Pacts: Competitive countries like Bangladesh with zero-duty access pose challenges. A reevaluation of trade pacts is necessary.
  5. Impact of Recent Reforms: Stagnating exports, demonetization, bank restructuring, and GST led to India losing its position as a top exporter.
  6. Delay in Subsidies: Fast-track subsidies for technology up-gradation under the TUFS scheme can modernize the industry.

Measures needed:

  1. Shift to Regional and Cluster Subsidies: The government should shift from export-specific subsidies to regional and cluster subsidies, technology upgradation, and skill development subsidies that benefit all producers.
  2. Achieve Fiber Neutrality: Equal tax treatment for cotton and manmade fibers will boost the industry, given the global consumption patterns.
  3. Labor Flexibility and Skilling: Flexibility in labor laws and skilling can significantly benefit the handloom industry, including allowing women to work in all three shifts.
  4. Technology Upgradation: Upgrading technology will enhance productivity and competitiveness for Indian players.
  5. Reevaluate Trade Agreements: The government should reassess trade agreements and focus on technology upgradation and skill development domestically.


Expanding the handloom production base to non-traditional areas with abundant land and labor resources is crucial for the preservation of our national heritage in the form of handloom. The handloom sector’s challenges can be addressed with the right strategies, ensuring a bright future for this vital part of our cultural legacy.