Challenges Confronting Khadi Sector in India

Contributor: Aayushi Kumar

For Indians, khadi is not just a piece of cloth, it conveys eternal sentiments with every Indian. Mahatma Gandhi introduced Khadi culture in 1920 as a political weapon and as an instrument for giving concrete expression to swadeshi spirits to boycott machine-made foreign goods.

Not only it had an essence of patriotism but also a far-sighted vision to employ the rural workforce of the country.

The Gandhian patrons and khadi workers perpetuated the thought process behind khadi and kept it alive for some time till liberalization and globalization set its foot in India. The central and state governments have been putting in efforts to revive the khadi sector; however, its inefficiency to improve the grip of khadi has led to widespread discontent among workers and enthusiasts across the country.

Khadi sector in India

In the current scenario, following are some prime challenges to the growth of the khadi sector in India.  

  1. Inconsistency in supply and demand 
  2. Lack of awareness among people and businesses
  3. Impact of GST on khadi
  4. Slow trickle-down of research and development works
  5. The plight of cotton farmers

1. Inconsistency in supply and demand

Khadi making Charkha
Image: Left - A retail store of Khadi products, Right - A women spinning yarn by hand using Charkha

Khadi is being reinvented and widely promoted by the government on a large scale. In 2016, Indian Railways and Air India were encouraged to use khadi in trains and airplanes. The union minister announced Khadi uniforms for more than one million paramilitary personnel in 2019. The youth has developed keenness towards made in India products. Prominent designers from the Indian fashion industry and young designers from National Institute of Fashion Technology were roped in to give khadi made apparel a modern and youthful touch. Behind the enthusiastic and optimistic facade of khadi demand, lies a crippled production facility and impoverished human resource.

Increasing the production of khadi is a challenge. The production capacity of the traditional hand spinning machine or charkha is limited. It is slow and causes physical exertion to the spinners. However, the introduction of solar charkha has improved the production of yarn. Solar charkha enables the filling of 75-90 spun reels of yarn; on the other hand, hath charkha or the traditional hand spinning machine prepares nearly 25-30 spun reels at a time.

The strength behind the khadi sector is poor women who spin yarns after fulfilling their daily chores in the hope of earning a living for their families. They are not benefitting much despite several attempts made by the governments. According to a report prepared by Rajyasabha tv in 2016, it was stated that in Mahatma Gandhi's Sewagram Ashram near Wardha, Maharashtra. In other parts of the country, the payment stoops lower and lower. 

Another article published in The Indian Express (2019) reports the plight of famous Ponduru khadi weavers of Andhra Pradesh where the children of khadi workers are forced to engage in daily wage works as their parents hardly earn as low as 100 rupees for weaving half a meter of saree every day. As a result, the exodus of the next generation of weavers and spinners is another big challenge for the future of khadi production. This situation has occurred due to meagre pay for hard work, uncertainty, and inflation leading to a strenuous life.

The government is focused on promoting Khadi as a Global fabric. FY 20, budget allocation of Rs 1252.65 crore has been made towards the development of Khadi, Village and Coir Industries. With changing dynamics and rigorous promotion of khadi in the Indian and global marketplace, it is critical to pay equal heed towards the improvement of the condition of khadi producers and equipping them with all the facilities to face the demand of the market.

2. Lack of awareness among people and businesses

Khadi is an entitlement to a fabric that is hand spun and handwoven; the natural raw material might vary. It has nothing to do with machinery and high-end manufacturing equipment. A Khadi fabric can be composed by anybody who knows spinning and weaving. This "human touch only" approach of fabric manufacturing leads to the production of "khadi".

In his interview with RajyaSabaha Tv, Shri Ram Chandra Rahi, a member of Gandhi Smarak Nidhi, expressed his concern over the lack of awareness among general masses about the understanding of khadi. He categorizes the availability of the fabrics by the name khadi in the marketplace as "Corporate" and "Gandhian". Those touched by mill machines cannot be called khadi. This lack of recognition and understanding has pushed the authentic khadi fabric on the verge of collapse.

Recently KVIC (Khadi and Village Industries Commission), a statutory body for khadi production set up by the central government, has come up with some strict guidelines for selling and using the word "khadi" for business promotions by the corporate giants. Only KVIC certified khadi emporiums, shops, and businesses can be said authentic as it keeps strict production rules and random checks at the units.

3. Impact of GST on khadi

The entire Khadi & Village Industries sector has been enjoying the advantage of tax exemption even under the pre-independence era. However, now the exemption shelter enjoyed by many of the Khadi Institutions has been removed. Khadi Institutions are now mandated to obtain registration under GST and also pay GST on various Khadi products which is 5%. The products of the Village Industries sector were either taxed at 0-14.30% before-GST and post-GST the same products attract tax at 12-28%. Khadi yarn, Gandhi topi, and India’s national flag, however, have been kept out of the purview of GST. Many khadi organizations have posed their disagreement and grief as the increasing sales price of khadi products is making it unaffordable for a common man, which again disrupts the purpose of khadi.

4. Slow trickle-down of research and development works

MGIRI or Mahatma Gandhi Institute for Rural Industrialization, an autonomous institution situated at Wardha, Maharashtra, has a dedicated research and development cell for Khadi formed by the collaboration of Khadi Gramodyog Ayog and IIT Delhi. It has come up with several innovations to support elevated khadi production. It has created low-cost solar charkha. It operates on solar energy and increases the speed of spun yarn production. MGIRI also conducts training and exhibitions. Despite all these efforts, the facilities and opportunities have a very slow trickle-down pace for solving the ground-level issues. There are 17 government organizations and 41 training centers facing a shutdown situation and attrition of workers.

5. The plight of cotton farmers

Cotton firming

The majority of farmer suicides occur in India's cotton farming belt. Genetically modified cotton — introduced into India by Monsanto as “BT Cotton” in 2002 — within one decade became India’s largest cotton seed supplier, with approximately 95% cover across the country. The BT-cotton production requires farmers to purchase expensive seeds every year, rather than saving and owning their seeds themselves as in our native farming methods.

For growing BT cotton, the farmers also have to purchase expensive pesticides and insecticides as well. For the world's second-largest cotton-producing country, one company has a near-monopoly on the cotton seeds grown in India.

The return to traditional indigenous cotton is important. The local species arboretum and herbaceum also locally known as desi cotton, needs revival for the sustainable livelihood of cotton farmers. These species of cotton are naturally very resistant to local pests and insects due to its ancient adaptation with geography and the tropical climate of the Indian landscape.

Some social entrepreneurship ventures like Tula India, are working to revive desi cotton by encouraging farmers to opt for traditional farming methods. They are making constructive attempts to make cotton farming sustainable for the farmers by transforming the entire cotton value chain. Not only farming, but they also have made successful attempts to make the entire khadi supply chain organic and sustainable. We need more such approaches to solve this problem.

The condition of cotton farmers shall improve only if chemical fed cotton is replaced by indigenous desi cotton along with native farming methods. The chemical-free cotton shall lead to the development of green fabric and green garments, which has a global appeal and demand.

"The khadi spirit means fellow feeling with every human being on earth," said Mahatma Gandhi talking about the true meaning of khadi.

The revival of the fabric which once supported the Indian national movement is possible by the collaboration of government, businesses, and the people. The youth of the country has immense potential to not only opt but also come up with innovative solutions and ventures to enhance the position of khadi. With immense support from the government and national institutes, the avenues of entrepreneurship are at an all-time high, which, if utilized with devotion and determination can make India a global leader of sustainable fashion.


  • Rajya Sabha Tv : Report- Future of khadi and challenges. (Video)
  • Budget 2019: Government’s continued commitment to help MSMEs (Article)
  • The New Indian Express: Ponduru Khadi losing its sheen, workers getting paltry wages
  • Budget 2019: Khadi’s reinvention sees increased budgetary allocation (Article)
  • The economic times: KVIC serves legal notice to two firms for using khadi in their brand name
  • MGIRI: Khadi and textile industries
  • - Tula : A return to India’s regenerative roots (Article by Harpreet Singh)
  • Tula India

Published: 27 Sept 2020
Updated: 6 Nov 2023

About the Author: Aayushi Kumar, an NIFT, Kolkata graduate, and Co-founder of Ednam Solutions Pvt Ltd is working in the field of female healthcare and hygiene, making smart garment. Her interests include sustainable fashion, functional garments and luxury brand management.

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