RURAL ENTREPRENEURSHIP IN

HANDLOOM TEXTILE INDUSTRY

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 Abstract

The handloom textile industry in India stands as a beacon of traditional craftsmanship and rural
entrepreneurship. This report examines the performance and impact of rural entrepreneurship within
this sector. It highlights the pivotal role of rural entrepreneurs in fostering economic growth,
preserving heritage, and contributing to local communities.
It provides employment to millions of people, primarily women, and contributes significantly to the
rural economy. However, the industry faces a number of challenges, including lack of access to
finance, technology, and markets. Despite these challenges, there are a number of promising
opportunities for rural entrepreneurs in the handloom industry.
The report dives into the factors influencing rural entrepreneurship, focusing on governmental
policies, access to finance, infrastructure, technological advancements, and skill development. It
showcases their impact on the growth and success of rural enterprises within the handloom textile
sector.
By analysing case studies and examples, the report showcases successful rural entrepreneurship
ventures. It delves into challenges faced, strategies adopted, and lessons learned, presenting a pathway
for aspiring rural entrepreneurs.
Furthermore, it outlines the challenges and opportunities prevailing in the sector, offering
recommendations to overcome hurdles and capitalize on growth prospects. The report emphasizes the
importance of sustainable practices for long-term viability in rural entrepreneurship.
The executive summary concludes with policy recommendations aimed at fostering an environment
conducive to the flourishing of rural entrepreneurship in the handloom textile industry. It encapsulates
the report's key findings, asserting the need for continued support and innovation for sustainable rural
entrepreneurship growth.

Introduction

The Indian handloom industry is one of the oldest and largest cottage industries in the country. The
industry is a hallmark of India’s centuries old traditions and culture with huge variety of designs,
printing techniques, weaving art and materials renowned globally. Almost every state of India has
something unique to offer in terms of handloom products. Phulkar from Punjab, Chanderi from
Madhya Pradesh, Ikats from Andhra Pradesh, Tie and Die from Rajasthan and Gujarat, Daccai from
West Bengal, Brocade from Banares and Jacquard from Uttar Pradesh are some of the examples of
the intricate work done by Indian artisans and weavers which are appreciated globally.

The sector has made significant contribution to the economy accounting for 6% of GDP and 13% of
exports2. The strength of the sector lies across its entire value chain from natural to man-made fibre
to apparel to home furnishings. Besides, the sector is the second largest provider of employment
after agriculture, employing nearly 51 million people directly and 68 million people indirectly. These
numbers clearly indicate that growth and all-round development of the textile industry will have a
direct bearing on and lead to improvement of the Indian economy. The textile sector is currently
estimated at around US$ 150 billion3 and is expected to reach US$ 250 billion by 2019. The
industry’s manufacturing setup is second largest in the world, following China. The industry has an
installed capacity of 512 lakh spindles, 8.6 lakh rotors, 0.68 lakh looms in organized sector, 25.23 lakh
power looms and 23.77 lakh handlooms4. The textile sector comprises four important segments –
modern textile mills, independent power looms, handlooms and garments.
The sector is one of the largest unorganized economic activity in the country providing employment
directly and indirectly to over 43.31 lakh weavers. 5 It is an integral part of the livelihood of many
people in the rural areas of the country. Moreover, the quantity of cloth production by the sector has
increased from 6.91 billion square meters in the year 2010-11 to nearly 8.01 billion square meters
during the year 2016-17, accounting for 17.4% of total cloth production.

Some of the key numbers / indicators as brought out by the Third Handlooms Census carried out by
the Government of India are presented in the table below. It is important to note that women
constitute as much as 77% of the adult weavers and allied workers in the handlooms sector.

The handloom sector offers a variety of products, which can be broadly classified under four broad
categories – clothing, fashion accessories, made-ups and floor coverings.

Handlooms

Fashion Floor
Clothing Made-ups
Accessories Coverings

Scarves, Stoles,
Sarees, Dress Bed Linen, Table
Gloves, Mitts, Carpets, Maps
Material, Dhoti, linen, Kitchen
Mittens, and Mappings
Shirts, Trousers linen, Upholstery
Handkerchiefs
The Indian handloom industry is one of the biggest differentiators for the economy owing to its
unique characteristics and significant contribution. The industry provides employment to over 4
million people and considered as the second largest income generating activity after agriculture in
rural India. It is a promising industry and undergoing lot of transformation. Some of the key factors
which gives it a comparative advantage over the other sectors are:

 Large premium design choices - The sector enables larger varieties of design to be spun out
which allows the consumers to have customized offerings which are unique in the world.
Also, the industry is considered as a designer’s paradise.
 High ROI - The sector earns a handsome return on investment as the value of the finished
product is far higher than the cost of the raw material.
 Green Tech - The sector is less capital intensive and requires minimal usage of power, hence
suitable for growth in the rural India.
 Ripe for Technology Disruption - The sector is vulnerable to multiple technology disruptions
and has the opportunity to create a cab aggregator type of business model which enables
matching of the disaggregated demand and supply prevailing in the industry.

Objective

This report aims to conduct a comprehensive analysis of the handloom industry in India with a
specific emphasis on rural entrepreneurship. The primary objectives are as follows:

 Evaluate the Current State: Assess the present condition and dynamics of the handloom
industry in rural India, emphasizing the role and impact of entrepreneurship within this
sector.
 Economic Contribution: Understand and quantify the contribution of rural entrepreneurship
in the handloom industry to India's economy, emphasizing employment generation, local
development, and economic sustainability.
 Identify Sustainability Challenges: Identify and analyze the challenges and issues faced by
rural entrepreneurs in the handloom sector concerning sustainability, encompassing factors
such as market access, technological advancements, and skill development.
 Global Promotion and Strengthening Measures: Outline strategic measures and initiatives
necessary for the global promotion and strengthening of rural entrepreneurship in the
handloom industry, considering both local empowerment and international market
penetration.

Literature Review

The handloom sector is the main

provider of bread and butter
among the weavers’ community in India.
Since this sector is the ages
of old in India, there are ample sizes of
literature and studies available
on this at different times. Looking at the
objectives of the study,
relevant and selective studies have been
reviewed to get a perspective
for developing a suitable strategy for
suggestion and implementation.
The study of Goswami and Jain3 found
missing of suitable business
strategy in the handloom cluster which
has resulted in the effect
of procurement of raw material, product
planning & promotional
activities. Importantly, both handloom
and handicraft sectors provide
low-cost and green livelihood
opportunities to millions of families as
per the planning commission report
(2013).4 In 1977, it was estimated
that every Indian handloom offered
employment to six persons.5
This indicates the role played by the
handloom sector in generating
The handloom sector is the main
provider of bread and butter
among the weavers’ community in India.
Since this sector is the ages
of old in India, there are ample sizes of
literature and studies available
on this at different times. Looking at the
objectives of the study,
relevant and selective studies have been
reviewed to get a perspective
for developing a suitable strategy for
suggestion and implementation.
The study of Goswami and Jain3 found
missing of suitable business
strategy in the handloom cluster which
has resulted in the effect
of procurement of raw material, product
planning & promotional
activities. Importantly, both handloom
and handicraft sectors provide
low-cost and green livelihood
opportunities to millions of families as
per the planning commission report
(2013).4 In 1977, it was estimated
that every Indian handloom offered
employment to six persons.5
This indicates the role played by the
handloom sector in generating
The handloom sector is the main provider of bread and butter among the weavers’ community in
India. Since this sector is the ages of old in India, there are ample sizes of literature and studies
available on this at different times. Looking at the objectives of the study, relevant and selective
studies have been reviewed to get a perspective for developing a suitable strategy for suggestion and
implementation. The study of Goswami and Jain3 found missing of suitable business strategy in the
handloom cluster which has resulted in the effect of procurement of raw material, product planning
& promotional activities. Importantly, both handloom and handicraft sectors provide low-cost and
green livelihood opportunities to millions of families as per the planning commission report (2013).4
In 1977, it was estimated that every Indian handloom offered employment to six persons.5 This
indicates the role played by the handloom sector in generating employment in India. However, it has
been observed that the increment of the total income of the industry does not always help the
weavers to get rid of the poverty trap. There are thousands of entrepreneurs who are completely
dependent on the handloom sector, but they are not from the artisans’ community. The study of the
Erode cluster reveals that many master artisans having more than 30 years of experience is gained
managerial skills and these artisans have a better understanding of the market, leads to the success
of clusters and the development of entrepreneurial skills.6 There are good business models like
FabIndia, Anokhi whop, Go-coop is Indian based companies that have created a niche market for
themselves and are fully dependant on the handloom sector. Similarly, the sustainable brand of
international repute like Patagonia, people tree, Honest by and Mud jeans, etc are completely
procuring sustainable products from the cluster.7 Further, there are many independent exporters,
the Government promoted cooperative societies and state emporiums that are completely
dependent on the weavers’ products. But unfortunately, livelihood development and enterprise
development among the weavers’ community are miserable. The other issues which are affecting
them in their professions such as are lack of implementation of schemes, commitment, and
adequate electricity and solar light (Das, Sandhya, 2015). The entrepreneurial climate is very weak as
they lack knowledge about the end market, their choices, modern business practices, physical and
digital connectivity, and organized support from the agencies both Government and private.8 There
are thousands of entrepreneurs who are completely dependent on the handloom sector, but they
are not from the weaver’s community. These entrepreneurs are acting as middlemen, some of them
are independent designers who are adding further value to the artisan products to connect the niche
markets. Skilled weavers having more than 20 years of experience will be capable to manage their
own business in the cluster if systematic interventions and proper training can be provided in the
present time. In the process, they may attempt to be become independent entrepreneurs as having
requisite skills along with their organizations’-built capabilities that artisans apply freely to improve
their wellbeing.9 Rural entrepreneurship implies emerging in rural areas. Institutions and individuals
promoting rural development now see entrepreneurship as a strategic development intervention
that could accelerate the rural development process (Saxena, 2012). Clusters and networks have
been proved to be effective tools of industrial policy in developing and developed countries. This
approach primarily seeks to address social and economic objectives on one side and the other; it
intends to enhance the competitiveness of the handloom sector in the global platform. The world
economy has witnessed that the successful apparel clusters the countries like Italy, China; Brazil, etc
have credential evidence in the world business in the field of apparel and shoes. These countries
have produced ample sizes of entrepreneurs (ITC, series of publications). It is also found that socio-
economic indicators of weavers in the clusters are having challenges and the clusters itself requires
to be revamped so that the status of weavers may develop to entrepreneurship (planning
commission of Odisha). Hence, an attempt has been made to understand issues of weavers, their
willingness, and the possibility to be entrepreneurship in the state. Studies indicate that most of the
weavers do not have production capacities due to poor access to finance, material, infrastructure,
and market. Therefore, it has become an unattractive source of livelihood for the younger
generations despite numerous interventions by the Central & State Governments, Non-governmental
Organisations (NGO), and institutions since independence. Besides, Private entities such as, FabIndia,
designers, professionals and Tata company, etc are involved for procurement of their products and
their development. To address these issues, the study here attempts to understand the various
existing issues of weavers around their occupation that has become a constraint for them to become
entrepreneur though, they have been practicing since long. It is observed and suggested by studies
that few numbers of master weavers (traders) are already doing enterprise. Apart from this, the
study aims to know their willingness to carry forward their old age profession in the future with what
capacity. Further, an attempt is taken to understand Micro, Small and Medium Enterprises (MSME)
and the possibility of integrating it with the cluster.

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