India’s handloom and handicraft sector, often celebrated as the backbone of the country’s cultural identity and rural enterprise, is facing a prolonged economic slowdown, with a majority of artisan establishments reporting stagnation or decline in production over the past decade, says a report released by the Institute for Human Development (IHD) and Crafts Council of India (CCI) on Monday.
The report, Economics of Indian Craft: Estimating Employment and Value Added in the Handicraft and Handloom Sector, surveyed over 4,600 household units across five states: Assam, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. While the findings underline the sector’s massive economic footprint, they also reveal deep structural vulnerabilities threatening its sustainability.
The study estimates that the handloom and handicraft ecosystem in the five surveyed states alone employs more than 6 million workers — nearly 26% of the manufacturing workforce in these states. The sector comprises around 3.4 million establishments, of which 1.8 million are handloom units and 1.6 million are handicraft enterprises.
Nearly 42% of manufacturing establishments in these states are linked to handicrafts or handlooms, highlighting the sector’s importance in India’s informal manufacturing economy.
However, over the last ten years, more than half of handloom units in Assam (50.4%), Tamil Nadu (66.3%) and Uttar Pradesh (51.4%) reported a decline in production scale. Handicraft units in Assam also recorded a sharp contraction, with 53.7% reporting reduced operations. Growth has remained scarce, particularly in Tamil Nadu and Uttar Pradesh, where less than 10% of units reported expansion during the decade.
The report notes that the post-pandemic recovery has remained uneven, with a significant proportion of establishments still operating below pre-Covid levels. The sector has also absorbed successive shocks from demonetisation, GST-related disruptions and volatile market demand.
Financial fragility remains a central concern. Tamil Nadu recorded the highest share of establishments burdened with outstanding loans — 16.8% in handloom and 10.8% in handicrafts. Record-keeping and formal financial management remain extremely weak across the sector, limiting access to institutional credit and government support schemes.
Most enterprises continue to function as tiny proprietary units with limited bargaining power. A large number remain dependent on master weavers, contractors and intermediaries for raw materials and market access, reducing profit margins for artisans themselves.
The study also flags low awareness and poor uptake of government welfare schemes, despite multiple programmes run by the Ministries of Textiles, MSME and Culture. Many artisans continue to rely on traditional production methods without access to modern design training, branding support or digital commerce platforms.
Women form a substantial part of the workforce, especially among vulnerable and marginalised communities, making the sector critical not just economically but socially. Yet low incomes, lack of social security and inadequate healthcare and pension coverage continue to discourage younger generations from entering craft occupations.
Low levels of education and exposure to technology among establishment owners reflect constraints of poverty, gender and caste. While the majority of establishments have one or two workers, average daily incomes of the workers at about Rs 270 per day (Rs 7,000 per month) fall far short of the prescribed daily minimum wage of skilled workers even working in the agricultural sector.
The report calls for urgent policy intervention, including stronger artisan clusters, better integration of cooperatives and self-help groups, easier access to finance and raw materials, and wider participation in fairs, exhibitions and e-commerce platforms. It also recommends upskilling artisans in contemporary design and eco-friendly production techniques to improve competitiveness in domestic and global markets.
Importantly, the study argues for a nationwide survey to accurately integrate the handmade economy into India’s official statistical systems. Without credible data and targeted policy support, the report warns, one of India’s largest livelihood sectors risks further decline even as global demand for sustainable and ethical products continues to rise.
Union Textiles Minister Giriraj Singh said the government is strengthening handloom and handicraft sectors through nationwide skilling, GI integration, market linkages, and quality-focused production to position India as a global luxury handloom hub.
“Across our skilling centres, we are focused on a comprehensive upskilling programme that recognises the diverse challenges and opportunities faced by weavers across the country. Under the government-supported 45-day training, artisans receive the support they need to strengthen product development at the grassroots, while we work to build robust market linkages. We have integrated GI tags across handloom and handicraft products, and are ensuring access to raw materials, design inputs, and reliable procurement systems after training. Over the next six months, we aim to scale this model nationwide.”
The minister, who was present at the event to launch the report, said that the government is committed to quality over quantity in the handloom and handicraft sector, to claim space in the global luxury market. “With stronger international branding and a renewed focus on the economics of handloom, we are determined to help this sector move beyond welfare narratives and establish itself as a high-value economic powerhouse,” he said.