India Proposes ₹8,000 Crore Initiative to Boost Traditional Textile Exports
New production-linked incentive scheme targets khadi, handloom, and handicraft sectors for global growth.
1Strategic Production-Linked Incentive
The Indian government is considering an ₹8,000 crore outlay for the Mahatma Gandhi Gram Swaraj Initiative. This five-year program aims to boost production in khadi, handloom, and handicraft segments. It is designed to complement the existing textile PLI scheme, which was launched in 2021 and recently extended until the 2033-34 fiscal year.
2Leveraging Global Trade Agreements
This initiative aligns with India's broader strategy to capitalize on free trade agreements with the UK and the EU. These markets offer duty-free access for textiles, yet current export volumes remain low. Officials aim to bridge the gap between existing trade potential and actual performance by enhancing domestic competitiveness and market linkages.
3Addressing Export Growth Challenges
Export growth for handloom and handicrafts remained stagnant at 1.2% in 2024-25 and 0.6% in 2025-26. While domestic khadi sales rose 10% to ₹7,869 crore, international expansion requires better scale. The government seeks to address these structural weaknesses to help the country's 10 million artisans compete effectively in the global marketplace.
4Scaling Through Infrastructure Investment
Beyond the new proposal, a separate ₹9,000 crore allocation is under consideration to support the handloom sector over five years. Experts emphasize that scaling requires common infrastructure and cluster development. These investments aim to modernize traditional practices, ensuring that MSMEs can meet international quality standards while maintaining their unique heritage craft identity.
5Employment and Economic Impact
The khadi and village industries sector provided employment to 20.4 million people during the last fiscal year. By focusing on production capacity and technology, the new initiative intends to increase rural incomes significantly. Strengthening these networks is viewed as a vital step toward achieving the national goal of $100 billion in textile exports.
6Role of Technology and Startups
Industry stakeholders suggest that startups play a critical role in modernizing the sector. By introducing new materials and digital marketing techniques, these firms can create additional value for weavers. Integrating technology into traditional supply chains is essential for reaching a wider consumer base and ensuring long-term sustainability for the labor-intensive handicraft industry.
7Bridging the Export Gap
India currently exports only $11.5 billion in textiles to markets covered by its 15 free trade agreements, despite a total potential market size of $199 billion. This massive headroom highlights the necessity for the proposed policy shifts. The government aims to double total textile and garment exports by the year 2030.
8Future Market Integration
The success of the Mahatma Gandhi Gram Swaraj Initiative depends on improving awareness and direct market access for artisans. Future developments will likely focus on building stronger branding networks and ensuring cheaper credit for small producers. These measures are intended to transform traditional industries into globally competitive entities within the coming years.