India plans ₹8,000-cr outlay to boost khadi, handloom and handicraft output

New Delhi: The Centre is considering an outlay of ₹8,000 crore for a marquee programme to boost production in the khadi, handloom and handicraft segments and strengthen global market linkages and branding.

The Mahatma Gandhi Gram Swaraj Initiative could be structured as a five-year production-linked incentive (PLI) scheme to complement the existing PLI programme in the textile sector, according to two people aware of the preliminary discussions.

The current PLI scheme, launched in 2021 with an outlay of ₹10,683 crore for five years and now extended up to 2033-34, mainly targets man-made fibre-based garments and fabrics, and select technical textile products.

The latest proposal is part of India’s plan to create more jobs and boost exports by better leveraging its free trade agreements, including with the UK, which came into force in July, and the EU, which is likely to be operational early next year, the people said.

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The UK and the EU, together the largest textiles and garments market for India after the US, promise duty-free access in these segments. The latest plan announced in the Budget for 2026-27 is in addition to the ₹9,000-crore allocation being considered for India’s handloom and handicrafts sector over five years to help the country’s 10 million artisans and weavers scale up, preserve heritage crafts and boost exports as reported earlier by Mint.

The latest push assumes importance because new trade deals have opened doors abroad, but exports of handloom and handicrafts may not take off in a big way unless Indian businesses, especially MSMEs, improve competitiveness, build scale and connect better to overseas markets.

Late last year, textile minister Giriraj Singh had said India’s existing 15 free trade agreements offered a textile market of almost $199 billion, against the country’s current exports of only $11.5 billion to these markets, indicating significant headroom for growth. India aims to more than double its textiles and garment exports to $100 billion by 2030.

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India’s handloom and handicraft export growth, year on year, remained muted at 1.2% in 2024-25 and 0.6% in 2025-26. Meanwhile, sales of khadi products in the domestic market rose 10% in 2025-26 from the previous year to ₹7,869 crore.

Questions emailed to the textile secretary and to the spokespersons of the ministries of finance and textiles remained unanswered until press time.

Scale and quality

Experts said trade agreements have opened up fresh avenues, but artisans can only benefit if they are able to scale up, improve quality and sell directly to larger markets. That would mean building common infrastructure, linking clusters, ensuring cheaper loans and pushing these products better both at home and overseas, they said.

“The khadi, handloom and handicraft sectors have significant potential to generate employment, increase rural incomes and expand India’s presence in global markets. The Mahatma Gandhi Gram Swaraj Initiative can help improve production capacity, modernise infrastructure, introduce better technology and strengthen marketing networks,” said A.K. Jha, former chief executive of Khadi and Village Industries Commission.

Also Read | MSME ministry seeks ₹6,000 crore to sustain khadi, village industries

Khadi and the overall village industries employed 20.4 million people last fiscal year, according to an official statement dated 13 October.

“The proposed initiative should focus on creating greater awareness about khadi, handloom and handicraft products among consumers and promoting their use in everyday life,” said Amresh Kushwaha, chairman of Angika Hathkargha Vikas Udyog Sahkari Samiti, a Varanasi-based handloom and cooperative society.

Since the sector is labour-intensive, the government should give greater attention to protecting the interests of artisans and ensuring better livelihood opportunities for them, Kushwaha added.

“Greater support for research, product development, branding and market access will help traditional textile industries evolve and reach a wider consumer base, including international markets,” said Angika Kushwaha, founder of start-up Kashikari Textiles.

“Startups can play an important role in bringing technology and new materials into the sector while creating additional value for farmers, artisans and weavers,” Kushwaha added.