Khadi spins a success story, sales top Rs 3,200 crore in FY19

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Updated: March 26, 2019 6:48:38 AM

In the first four years of this government, sales grew at an annual average of over 30%, against 6.7% in the previous 10 years.

From just Rs 1,081 crore in 2013-14, the sales of khadi, an unfading symbol of the Indian freedom movement, are estimated to touch an all-time high of Rs 3,200 crore this fiscal.
(Representational image)

The Khadi Gram Udyog Bhawan, a 20,000-square feet outlet in the heart of Connaught Place, recorded sales of Rs 1 crore or more a day at least three times between October and November 2018 when it ran a discount scheme, eclipsing those of most high-profile stores in the vicinity. In 2017-18, the Bhawan alone sold products worth a record Rs 103 crore. Only a very few, who were witness to the dilapidated conditions of the store six-seven years ago, would have thought the transformation was ever possible. The outlet’s success mirrors the growing craze for khadi in recent years.

From just Rs 1,081 crore in 2013-14, the sales of khadi, an unfading symbol of the Indian freedom movement, are estimated to touch an all-time high of Rs 3,200 crore this fiscal, Khadi and Village Industries Commission (KVIC) chairman Vinai Kumar Saxena told FE.

MSME ministry data show sales stood at Rs 2,510 crore in 2017-18. In the first four years of this government, sales grew at an annual average of over 30%, against 6.7% in the previous 10 years, Saxena said. Massive push by this government (especially PM Narendra Modi), KVIC’s supply tie-ups with firms like Raymond, Arvind Mills and Aditya Birla Fashion in 2017-18, aggressive marketing and growing interest of public-sector enterprises for khadi products for employees are the biggest drivers of the sales, Saxena said.

Raymond, for instance, bought as much as 7.26 lakh metres of grey khadi fabric last fiscal, while Arvind Mills purchased around one million square metre of Khadi denim. These companies source fabric from Khadi institutions to manufacture garments and sell them under their own brand names.

Interestingly, KVIC and Khadi institutions started tapping the corporate gifting segment last year by tying up with several public-sector units. In a first, they received orders of Rs 46 crore from ONGC and those of Rs 43 crore from Indian Oil Corporation in 2017-18. They are in the process of clinching another Rs 11-crore deal with Oil India. These PSUs typically place order for gift coupons by KVIC to be distributed among their employees, who can shop at any Khadi store within a stipulated period.

Very soon, as many as 83,000 postmen across states will be clothed in Khadi uniform, as an MoU with the department of post is being finalised, said Saxena. The upcoming polls season is expected to provide a leg-up to Khadi sales as well.

“Khadi institutions have transformed themselves to cater for the changing needs of time and improved their range of products, with focus on style. Aggressive marketing, too, has helped,” said a senior official with the MSME ministry.

KVIC owns a total of 18 sales outlets (including seven main stores), while various Khadi institutions across states own 8,062 of them. Of the 1,942 khadi institutions in the country, 1,585 produce Khadi fabric and ready-made products. Retail sales mainly take place through these outlets.

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