The role of policies in promoting the handloom sector in India

The role of policies in promoting the handloom sector in India

Government policies play a vital role in promoting the growth of the weaving sector which can have a positive impact on the entire economy. Here are some of the ways in which government policies can promote the development of the weaving industry.

Financial aid

The weaving sector regularly goes through periods of high demand and high supply. During the periods of high demand, businesses need to make sure they have sufficient stock in order to service the demand. The downside to this is that they need to maintain production even during times of low economic activity. This is where government schemes like very low interest loans for manufacturers of hand-loom goods, subsidies and grants could help.

Currently small businesses that are engaged in this sector find it very hard to get financial help from banks and hence resort to borrowing at very high interest rates which hurts their profit margins.

Removing taxes on handloom products

The government could boost the sale of handloom products by drastically reducing or even removing taxes on these goods. Currently, the flow of input credit from the producer to the final seller who collects taxes from the end consumer is filled with time consuming statutory procedures.


Promotion of exports

Governments can promote textile exports by providing incentives to export-oriented companies. These can include tax rebates, export credits and marketing support.


Protectionist policies

The government can implement protectionist policies such as tariffs and import quotas to protect the domestic weaving industry from foreign competition. This helps to level the playing field for domestic companies and facilitate their development.

Skill development programs

The government can promote skills development programs to improve the quality of the workforce in the weaving industry. These can include training, apprenticeship and vocational training programs.


The economic impact of these policies can be significant. By promoting the weaving industry, the government can create new jobs and increase exports. It can also help reduce poverty and increase income levels in weaving communities. Additionally, the growth of the weaving industry can positively impact related industries such as textiles and fashion, thereby boosting overall economic activity and growth.

Back to blog