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Weaving

`Time Running Out for Handloom and Handicraft Sector’

• By  Textile Excellence
• April 01, 2026

Handloom sector plays a significant role in the cultural and economic fabric of India. It provides livelihood to millions of weavers across rural and semi-urban regions. Despite its importance, the sector continues to face multiple challenges including lack of modernization, limited market access, and competition from powerloom and synthetic alternatives.

According to Mohanrao Macherla, President, National Federation of Handlooms & Handicrafts (NFHH): “The budget allocation for handloom sector has seen fluctuations over the years. While there have been targeted schemes, their implementation and reach remain inconsistent. In fact, budgetary allocations and actual spending on the handloom and handicraft sector has been consistently falling over the last few years. The need of the hour is a comprehensive and structured approach that integrates financial support, infrastructure development, and market linkage.”

Key areas requiring attention include:

• Raw Material Access: Ensuring availability of quality yarn at subsidized rates.
• Credit Facilities: Easy access to institutional credit for weavers and cooperatives.
• Skill Development: Training programs to upgrade skills and introduce contemporary designs.
• Technology Integration: Adoption of improved tools and processes without compromising traditional techniques.
• Marketing Support: Strengthening domestic and international market presence through exhibitions, e-commerce platforms, and branding initiatives.

Government schemes have attempted to address some of these concerns, but gaps remain in execution. There is also a lack of reliable data on production, employment, and income levels within the sector, making policy formulation difficult.

“The role of clusters and cooperatives is crucial in streamlining production and ensuring better returns for artisans. However, many such institutions suffer from governance issues and lack of transparency. There is urgency to support India’s handlooms and handicrafts sector if we want to preserve these heritage crafts and the rural economy,” emphasises Macherla.

The NFHH has been making these budget recommendations for some time now:

1. Increase allocation for handloom sector with a clear focus on outcomes.
2. Establish dedicated handloom clusters with integrated facilities.
3. Provide direct benefit transfers to weavers to eliminate intermediaries.
4. Invest in branding and GI tagging of regional products.
5. Promote sustainable and eco-friendly practices within the sector.
6. Encourage public-private partnerships for innovation and market expansion.

“The handloom sector is not just an economic activity but a repository of India’s cultural heritage. A well-planned budget with targeted interventions can revitalise the sector, improve livelihoods, and preserve traditional crafts for future generations,” Mr Macherla underlines.

NFHH urges NABARD for urgent financial support

A representation recently submitted by the National Federation of Handlooms and Handicrafts (NFHH) to NABARD further highlights the deep financial distress in India’s handloom and handicraft sectors and calls for immediate policy intervention.

The federation flagged rising raw material costs and limited availability of yarn, dyes and other inputs as key challenges. This has reduced production and affected the ability of cooperatives to provide regular work. Delays in payments under government schemes have further strained working capital.

To address this, NFHH has proposed a range of financial measures. These include working capital loans at concessional interest rates of 3–4%, higher credit limits based on current costs, and faster approval of loans. It has also called for one-time settlement of overdue loans, expansion of MUDRA loans, and housing finance support for weavers.

The representation also seeks creation of common service centres, raw material banks, and production-cum-procurement centres to improve access and reduce exploitation by intermediaries.

For the handicrafts sector, it recommends investment in warehouses, research and development, and dedicated funding support, including loan waivers.

The federation estimates total short-term credit demand at up to ₹15,000 crore, underlining the scale of need. It has urged NABARD and the government to act quickly to protect livelihoods, sustain rural employment, and preserve India’s cultural heritage.

According to Mohanrao Macherla, President, National Federation of Handlooms & Handicrafts (NFHH): “The budget allocation for handloom sector has seen fluctuations over the years. While there have been targeted schemes, their implementation and reach remain inconsistent. In fact, budgetary allocations and actual spending on the handloom and handicraft sector has been consistently falling over the last few years. The need of the hour is a comprehensive and structured approach that integrates financial support, infrastructure development, and market linkage.”