Micro, small, and medium enterprises (MSMEs) are small businesses that play a vital role in the handloom industry in India. They employ millions of people, mostly women, and they are responsible for producing a wide variety of hand-woven products. MSMEs are important for this sector because they are flexible and adaptable and can respond quickly to changes in market demand. They are also able to produce high-quality products at competitive prices.
The handloom industry in India is not merely an economic sector but a living heritage that embodies the country’s cultural diversity, creativity, and craftsmanship. Its significance goes beyond economic numbers, as it empowers artisans, preserves traditions, and connects India’s past with its future. Recognising and supporting the handloom industry is crucial for fostering sustainable development, preserving cultural heritage, and empowering the communities that sustain this timeless art form.
In August 2024, we celebrated the 10th National Handloom Day, marking the significance and legacy of the industry. Let’s look into the history of huge handloom community in the country and their contribution to carrying on the traditional heritage and ensuring financial stability. Here are the major aspects that make the handloom industry what it is today.
Rise of the Handloom Industry
India’s handloom industry is a treasure trove of cultural heritage, with each region offering its unique weaving techniques, designs, and motifs. It is deeply intertwined with India’s history, traditions, and identity, making it an integral part of the nation’s heritage. Understanding the importance of the handloom industry in India requires exploring its historical roots and recognising its socio-economic impact.
Skilled artisans have been practising hand spinning, weaving, and printing techniques for thousands of years and have been passed down through generations, preserving ancient craftsmanship and traditional knowledge. The industry’s products, such as sarees, shawls, fabrics, and garments, are not merely textiles but living expressions of India’s artistic and cultural legacy. The sector is also the second-largest employment provider, employing 3 million people directly and indirectly.
Export from the Handloom Industry
India exports a diverse array of hand-woven products, including mats and mattings, carpets, rugs, bedsheets, cushion covers, clothing, and silk scarves. The primary export hubs for these products are Karur, Panipat, Varanasi, and Kannur. In FY 2023–24, India’s exports of cotton yarn, fabrics, made-ups, and handloom products grew by 6.71%, reaching $11.7 billion, up from $10.95 billion in the previous year.
The United States remained the largest importer, accounting for over 25% of total exports in this category, followed by Bangladesh (16%), China (6.6%), Sri Lanka (4.4%), and the UAE (2.35%). Cotton yarn exports led the growth with a 37.25% increase in value to $3.78 billion, accompanied by an 83.18% surge in quantity. Cotton made-ups, which include home textile products like bed linens and kitchen linens, saw a modest 1.75% rise to $4.37 billion, while cotton fabrics declined by 10.75% to $2.25 billion. India also expanded its export footprint to new markets such as Serbia, Sweden, Iran, and Zambia, indicating a broadening global presence.
Handloom Textile Products from Different Indian States
India is home to a rich and diverse tradition of handloom weaving. From sarees to hand block printing, there are many sub-sectors/specialty handlooms that offer a wide range of products. Sarees are the most popular handloom product in India, and they come in a variety of styles and designs. Here are a few examples of India’s rich heritage of handloom sarees:
Paithani sarees – Maharashtra
Paithani sarees are a type of handwoven silk saree that originated in the Paithan town of Maharashtra. They are known for their intricate designs, which are often inspired by nature. Paithani sarees are also known for their luxurious feel, and they are often worn by brides on their wedding day.
Bandhani Sarees – Gujarat
Bandhani sarees are a type of tie-dyed saree that is popular in Gujarat. They are known for their vibrant colours and intricate patterns. Bandhani sarees are often made from cotton or silk, and they can be worn for both formal and informal occasions.
Mysore Silk Sarees – Karnataka
Mysore silk sarees are a type of silk saree that is produced in the Mysore region of Karnataka. They are known for their soft, lustrous fabric and their intricate designs. Mysore silk sarees are often worn by brides on their wedding day, and they are also popular for other formal occasions.
Kalamkari Sarees – Andhra Pradesh
Kalamkari sarees are a type of hand-painted saree that is produced in the Andhra Pradesh region of India. They are known for their intricate designs, which are often inspired by Hindu mythology. Kalamkari sarees are often made from cotton or silk, and they can be worn for both formal and informal occasions.
Other popular handloom products include kurtas, dhotis, shawls, stoles, bags, and accessories. Hand block printing is a traditional printing technique that uses carved wooden blocks to apply patterns to fabric. It is widely used for linens and household items like curtains and mats.
What are the Challenges Faced by MSMEs in the Handloom Industry?
The handloom sector in India is one of the country’s oldest and largest cottage industries, with 23.77 lakh looms. Even though the sector has several unique strengths, they also faces many challenges. Some of them are:
- Competition from Power looms: Power looms can produce textiles more quickly and cheaply than handlooms. This has led to declining demand for hand-woven products as consumers seek the cheapest option.
- Rising Costs of Raw Materials: The cost of raw materials, such as yarn and dyes, has risen in recent years. This has put a strain on the finances of MSMEs, as they have to pass on the increased costs to their customers.
- Lack of Access to Markets: Small businesses face difficulty in accessing markets for their products. This is because they have limited resources and are often located in rural areas, making it difficult for them to reach large retailers or wholesalers.
- Lack of Training and Technology: MSMEs often lack the training and technology they need to produce high-quality products that consumers demand. They may not have the resources to train their employees on new technologies, which can prevent them from taking advantage of the latest innovations. The cost of technology can also be a barrier for small businesses. This can make it difficult for them to compete with larger companies with access to these resources.
MSMEs in the handloom industry also face a lack of access to financing and resources. This can hinder their ability to create unique, handcrafted textiles. However, with the support of fintech companies like Kinara Capital, these businesses can receive the necessary resources to preserve India’s handloom heritage and contribute to the growth of this critical industry.
Government Initiatives to Support Handloom Industry
The Indian government initiated some programmes to promote the industry, which are mentioned below.
National Handloom Development Programme (NHDP)
The NHDP is a government program that aims to promote the handloom industry in India. The program has several components, including the
- Cluster Development Programme (CDP), which provides financial assistance to their clusters.
- The Handloom Marketing Assistance (HMA) scheme provides financial assistance to weavers to market their products.
- The Urban Haats scheme provides space to sell their products in urban areas.
Market Access Initiative (MAI)
The MAI is a government program that aims to promote the export of handloom products from India. The program was launched in 2018 and will be effective until March 2026. The MAI is based on a product-specific approach, with market studies and research to identify potential markets for these products.
The main activities of the MAI include marketing products internationally, building capacity, supporting statutory compliance, carrying out studies, developing projects, providing portals for foreign trade facilitation, and supporting smaller and traditional industries.
Grow your MSME with collateral-free business loans
How MSME Loans Can Fuel Sustainable Growth
Small businesses are important for the handloom industry because they provide a flexible and adaptable production system that is well-suited to the needs of the industry. Here’s what the industry needs to grow further:
- Provide financial assistance: Financial assistance to small businesses through loans, grants, and subsidies can help MSMEs invest in new technology and training. It will enable them to produce high-quality products that consumers demand.
- Empower women: The handloom industry is a major source of employment for women in India. Providing women with access to training, finance, and markets is essential to promote small businesses in this industry. Through these resources or proper guidance, women entrepreneurs can start and grow their businesses.
- Support traditional designs: One of the defining aspects of this sector is its use of traditional designs. Supporting the development of new traditional designs and encouraging weavers to incorporate them into their products can inspire them to create even more masterpieces.
- Promote sustainable practices: Handloom is a sustainable industry, and promoting eco-friendly practices, such as using organic dyes and yarns, can greatly support it.
- Promote handloom products: Creating opportunities like exhibitions, fairs, and online platforms can help them showcase their products. This will help to raise awareness of hand-woven products and increase demand for them.
- Provide training and technology: Providing training and technology to MSMEs in the industry can help them to improve their skills and productivity. It will enable them to compete with larger companies.
- Review government policies: The government can review government policies that are affecting the handloom industry. This will help to ensure that these policies are supportive of small businesses and that they do not create unnecessary barriers to entry.
By taking these steps, the government and the private sector can help MSMEs in the handloom industry overcome their challenges and continue contributing to the Indian economy.
Future of the Handloom Industry
There are a number of emerging trends that are likely to benefit the handloom industry. The growing demand for sustainable and ethically-sourced products, increased access to markets, and emerging trends in fashion are some of the factors that will influence the future of the industry.
- Growing Demand for Sustainable and Ethically Sourced Products: Consumers are increasingly aware of the importance of sustainable and ethically sourced products. Therefore, handloom products are seen as a sustainable and ethical alternative to mass-produced textiles. This is likely to boost demand for handloom products in the future, both domestically and internationally.
- Increased Access to Markets: The government is also working to increase access to markets for handloom products. This includes promoting these products through exhibitions and fairs and supporting weavers to export them. This will, in turn, increase sales for weavers and handloom business owners, and help support the handloom industry as a whole.
- Emerging Trends in Fashion: There is a growing trend towards traditional and ethnic wear in fashion. This is likely to boost demand for hand-woven products, as they are seen as a symbol of traditional Indian culture.
The Handloom industry is well-positioned to capitalise on the growing demand for sustainable and ethically-sourced products, as well as the government’s support and increasing access to markets.
Conclusion
The handloom industry is a vital part of India’s economy and heritage, but challenges like rising raw material costs, market access issues, and competition from power looms can slow business growth. A business loan from Kinara Capital can provide the financial support needed to invest in raw materials, upgrade technology, and expand market reach.
Kinara Capital offers collateral-free MSME loans, ensuring quick and easy access to funds. Women entrepreneurs can also benefit from the HerVikas program, which provides an automatic upfront discount on loan interest rates. With the myKinara App, MSMEs can check their loan eligibility in just one minute and receive funds digitally within 24 hours.
With India’s textile exports expected to grow significantly, handloom businesses must scale up to meet global demand. Access to timely financing can help weavers modernize production, adopt sustainable practices, and strengthen their competitive edge in domestic and international markets.
FAQ
1. How can business loans help handloom MSMEs become more sustainable?
Handloom businesses operate on demand cycles and have to stock up on raw materials in a timely manner to stay competitive. They also need to upgrade and repair their machinery periodically. Business loans can help these businesses cover such expenses seamlessly while continuing their operations, thus making them sustainable and aiding long-term growth.
2. Are there government schemes available for MSMEs in the handloom sector?
The Indian government implements several schemes aimed and supporting the development of the handloom sector, including the National Handloom Development Programme, Comprehensive Handloom Cluster Development Scheme, and the Weavers’ MUDRA Scheme. These schemes provide subsidies, resources, and financial assistance aimed at the development and welfare of individuals and businesses involved in the handloom sector.
3. What are the eligibility criteria for securing a business loan for a handloom MSME?
The eligibility criteria for securing a business loan for a handloom MSME vary from lender to lender. As a general rule, they should be a registered entity with the essential paperwork, like ownership documents and bank details, in place in order to qualify.
4. How can a handloom MSME apply for a business loan online?
To apply for a business loan online, a handloom MSME can opt for a new-age lender like Kinara Capital, which offers an online application process. In the case of Kinara, MSMEs cn apply for business loans through an end-to-end digital process on the myKinara App.
