Policy Update
R.Tejaswini
Background
The Indian Handloom sector is one of the oldest and most vibrant textile traditions in the world. Yet it is also one of the most unorganised sectors of the Indian economy, which requires an integrated approach for systematised production of large scale orders. In this context, the National Handloom Development Programme was implemented from 2021-2022 to 2025-2026. It is a holistic and need-based approach for sustainable development of handloom industry and welfare of handloom weavers.
The programme aims to transform the sector into cohesive and self-reliant units. This sector employs 35.22 lakh households, revealing the vastness of the sector (PIB 2148300). It plays an important role in rural livelihood and social upliftment as women constitute around 71% of the handloom workforce and the rest of workers are majorly members from marginalised communities.
Therefore, it contributes to women’s economic participation and employment opportunities in rural areas. The scheme provides effective support in raw materials, technological upgrades, marketing assistance and infrastructure support for all the weavers, including those in cooperatives and Self-Help Groups. The scheme aims to enhance the handloom sector through capacity building, technological support, market access, cluster development programme, preservation of traditional and diminishing crafts, concessional credits and social benefits to workers.
The programme comprises several components –
A. Cluster Development Programme (CDP)
B. Handloom Marketing Assistance with special emphasis on uncovered & talented weavers.
C. Infrastructure & Special Projects including Indian Institutes of Handloom Technology (IIHT)-related projects
D. Mega Handloom Cluster
E. Concessional Credit/Weavers’ MUDRA Loan
F. Handloom Weavers’ Welfare
G. Miscellaneous Components
H. Any other component
Functioning
The NHDP is a Central sector scheme implemented by the Ministry of Textiles through the Office of the Development Commissioner for Handlooms. The scheme includes various other components which strengthen the functioning of NHDP. These schemes include Mega Handloom Clusters (MHC) and Small Cluster Development Programme which focus on around 10 lakh handlooms and 500 weavers respectively.
The MHC provides comprehensive support which includes value addition centres and basic infrastructure. Furthermore, the need-based infrastructure projects aim to bridge particular gaps in the value chain through design resource centres, technical support and development of handloom craft villages thereby targeting to enhance market visibility. It also includes a marketing incentive component shared between Central and state governments equally which contributes to enhancing market competitiveness.
In addition, the scheme supports research and education, including the handloom census, education support for weavers, and handloom helpline. Funds under the scheme are released mainly in two installments, where 50% of the fund is released in the first phase, while the other 50% is released only after certain documents are submitted. The state government through the State Directorate of Handlooms acts as a bridge between the Central government and implementing agencies The State Directorate of Handlooms and its subordinate field offices act as the nodal agencies.
The functioning involves a multi-tiered structure involving state and central level committees cooperating with nodal agencies for project approvals, appraisals, sanctions, implementation and monitoring. In conclusion, the scheme’s functioning involves multiple components which ensure holistic development of the handloom sector.
Performance
NHDP gained increased financial support in 2026, as the Union Budget allocated an outlay of ₹1500 crore to the Integrated Programme for Textile Sector, under which NHDP is a component. This integration has reinforced the scheme’s ambitious goal with availability of fiscal resources to accelerate holistic development of the handloom sector. Nearly 95% of the world’s handwoven fabric is made in India signifying India’s global leadership in handloom production.
As of 2025, approximately 22 lakh weavers including SHGs have been provided assistance demonstrating substantial outreach and coverage. At the same time only 356 CDPs have been developed revealing that cluster development is limited in comparison with the size of the sector. In addition, 16 lakh weavers were supported under the marketing assistance initiative, indicating strong outreach of this initiative The launch of the IndiaHandmade e-commerce portal demonstrates digitisation of market access to enhance visibility of India handloom products. Overall, the NHDP has shown solid performance in outreach and market integration yet it faces challenges in ensuring even coverage and implementation delays.
Impact
The NHDP has contributed to a multi-dimensional impact in the handloom industry. It has enhanced rural livelihoods, improves market access and institutional support to ensure the development of the handloom sector. By facilitating access to exhibitions and creating websites like the IndiaHandmade portal, the scheme has strengthened the income streams for weavers. The programme has also supported women employment as the sector’s workforce largely consists of women, ensuring women empowerment in rural areas.
This sector also plays an important role in social upliftment and inclusive growth with the majority of the workforce belonging to Scheduled Castes and Scheduled Tribes. In addition, it has enabled the integration of traditional weavers into the broader supply chain and increased their visibility in national and global markets. The programme enhances the livelihoods by ensuring social security through initiatives like Pradhan Mantri Suraksha Bimai Yojana and Pradhan Mantri Jeevan Jyoti Bimai Yojan. Overall, NHDP has improved productivity and welfare of weavers in the handloom industry but its structural impact will depend on consistent implementation and better outreach.
Emerging Issues
The programme also faces certain challenges from competition arising from machine-made and powerloom products, which reduces the demand for traditional handloom products. Hathkargha Samvardhan Sahayata component addresses this issue by providing financial assistance for loom upgradation.
In addition Hand woven products are often copied by powerloom and mill-made imitations, undermining the authenticity and value of original handloom products. To mitigate this issue certification mechanisms like Handloom Mark (HLM) and Indian Handloom Brand (IHB) have been introduced yet enforcement and consumer awareness remain limited.
Way Forward
The NHDP should adopt a more targeted, market-oriented and technology-driven approach to redress the challenges faced by the Indian handloom sector. The programme should utilise digital platforms, increase export promotion and improve direct market linkages between weavers and consumers by utilising digital platforms to counter competition from machine-made products.
To enhance visibility and competitiveness of Indian handloom products in global markets, the policy should invest significantly in branding and geographical indication (GI) promotion. Authenticity of handwoven goods could be maintained through consumer awareness campaigns and stricter monitoring of counterfeit products. In addition to improving productivity, access to technological support, skill development and financial assistance should be expanded. Such measures would contribute towards holistic and sustainable development of the Indian handloom sector and the broader objective of Atmanirbhar Bharat.
References
1. Press Information Bureau. (2020). Development of the handloom sector. Ministry of Textiles, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1655540
2. Ministry of Textiles. (2024). National Handloom Development Programme (NHDP) compendium. Office of the Development Commissioner (Handlooms), Government of India. https://handlooms.nic.in/assets/img/Handloom%20Schemes/NHDP_English%20Compendium_2024.pdf
3. Press Information Bureau. (2025). Assistance to handloom weavers under NHDP. Ministry of Textiles, Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2199517
4. Press Information Bureau. (2025). National Handloom Day 2025: Celebrating craftsmanship and excellence. Ministry of Textiles, Government of India. https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=154978
5. Press Information Bureau. (2024). 10th National Handloom Day: Celebrating tradition, innovation and excellence. Ministry of Textiles, Government of India. https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=151995
ABOUT THE CONTRIBUTOR
R.Tejaswini is a Research Intern at IMPRI. She is pursuing a Master’s in International Studies from Stella Maris College, Chennai. Her research interests include India’s foreign policy and Public policy.
Acknowledgement
The author sincerely thanks the IMPRI team for their constructive comments and editorial guidance during the review of this policy update.
Disclaimer: Any views expressed in this article are those of the author and do not necessarily reflect the views of IMPRI.
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