India's Khadi Economy 2026: What the ₹1.87 Lakh Crore Number Actually Measures

Every year the headline lands in much the same shape: khadi has crossed another record, a lakh crore and counting, Gandhi's cloth reborn as a modern industry. The number is real and it comes from the government's own accounts. What almost no coverage says is that the overwhelming majority of it is not cloth at all. This report separates the two, traces what a khadi artisan is actually paid, and sets the sector against handloom, with which it is routinely confused.

1. What the ₹1.87 lakh crore actually counts

In FY2025-26 the Khadi and Village Industries Commission reported sales of ₹1,87,105 crore, against ₹31,154 crore in 2013-14 — growth of 501 per cent across twelve years.^[1] Production over the same period grew 380 per cent.^[1] It is a genuine expansion and the figures are published by the Ministry of Micro, Small and Medium Enterprises.^[19]

The problem is the label. KVIC's mandate covers khadi and village industries — two distinct things joined by an administrative comma. Khadi is hand-spun, hand-woven cloth. Village industries are everything else the commission promotes: soap, honey, pottery, leather goods, food processing, agarbatti, handmade paper. Both roll into one turnover line, and that combined line is what gets reported as "khadi".

2. Khadi cloth: the real number

The same press release that carries the ₹1.87 lakh crore headline breaks the textile figure out separately. Khadi sales rose from ₹1,081 crore in 2013-14 to ₹7,869 crore in FY2025-26.^[1] By our calculation that is 4.2 per cent of the sector total. The other ₹1.79 lakh crore is village industries.

This is not a criticism of the number — it is a criticism of how the number travels. A reader who sees "khadi crosses ₹1.87 lakh crore" reasonably concludes that hand-spun cloth is a ₹1.87 lakh crore industry. It is not. It is a ₹7,869 crore industry sitting inside a much larger rural manufacturing programme that shares its name.

Held to its own scale, khadi cloth has still grown faster than the sector around it: 628 per cent in sales against the sector's 501 per cent.^[1] Production moved from ₹811 crore to ₹3,974 crore over the same twelve years.^[1]

3. The twelve-year growth record

The growth is consistent across the government's own reporting periods. An earlier eleven-year accounting put sales growth at 447 per cent, production at 347 per cent and employment generation at 49.23 per cent.^[8] Those figures are lower than the twelve-year numbers because the base year and end year differ, not because the series was revised — a distinction worth holding when comparing statements published a year apart.

Historical context sharpens it. Khadi production stood at roughly ₹1,904.5 crore in FY21.^[13] Reaching ₹3,974 crore in production by FY2025-26 means the figure roughly doubled in five years, which is a faster clip than the twelve-year average implies and suggests most of the acceleration is recent.

4. Who spins and weaves

Approximately 5,00,000 artisans work in khadi specifically, and more than 80 per cent of them are women.^[2] That share makes khadi one of the most female-dominated production sectors in Indian manufacturing. Independent evaluation of the sector has put the female share somewhat lower, at around 65 per cent, using a different definition of who counts as a contracted artisan^[16] — the direction is consistent even where the precise figure is not.

Across the full Khadi and Village Industries sector, employment reached 2.04 crore people in FY2025-26, up from 1.30 crore in 2013-14, a rise of 56 per cent.^[2][7] Again the distinction matters: the 2.04 crore figure describes the whole programme, not the half-million people working in cloth.

"Hand-spun and hand-woven is two lots of paid human labour in a single metre of cloth. That is the entire reason khadi costs what it costs, and the entire reason it is worth it."— Ramola Bachchan, Founder

5. What an artisan earns per hank

Khadi spinning is paid by the hank — a fixed length of yarn — rather than by the hour, which makes the wage unusually legible compared with most Indian textile work. The rate has risen from ₹4 per hank in 2013-14 to ₹15 per hank today, an increase of roughly 275 per cent.^[1]

It moved in steps rather than continuously. Spinning wages went from ₹7.50 to ₹10.00 per hank, with weaving wages for cotton khadi, woollen khadi and polyvastra raised 10 per cent alongside.^[5] The rate reached ₹12.50 per hank in October 2024 and ₹15.00 per hank from April 2025,^[3] the last of these a 20 per cent increase.^[4]

“Khadi is sold as heritage and priced as commodity, and the gap between those two things lands on the spinner.” says fashion designer Ramola Bachchan, who founded First Resort in 2018.

6. PMEGP: the employment engine that is not khadi

A large share of KVIC's employment story runs through the Prime Minister's Employment Generation Programme, a credit-linked subsidy scheme for rural micro-enterprise. In FY2025-26 it established 66,494 new units generating employment for more than 7.31 lakh people.^[1] Cumulatively, from inception to 31 December 2025, it has supported about 10.73 lakh micro-enterprises and an estimated 87 lakh jobs, with close to 80 per cent of units rural, according to Parliament's Standing Committee on Industry.^[10]

PMEGP funds rural enterprise broadly — a dairy unit, a workshop, a food-processing business. It is not a khadi cloth programme. When KVIC's employment figures are quoted as evidence of khadi's scale, this is usually where the bulk of the number comes from.

7. Khadi is not handloom

The two are used interchangeably and they are not the same. Khadi must be hand-spun and hand-woven. Handloom requires only hand-weaving — the yarn may be mill-spun. All khadi is handloom; most handloom is not khadi.

Handloom is also the much larger sector. It supports 35.22 lakh weavers and allied workers, over 72 per cent of them women.^[11] The Fourth All India Handloom Census counted 31.45 lakh handloom households, of which 64.1 per cent sell into the open market and 17.6 per cent through master-weaver households.^[12] Against 5,00,000 khadi artisans, handloom is roughly seven times the workforce.

8. What legally counts as khadi

Khadi has a statutory definition and a certification mark, which most fabric marketed as "khadi" does not carry. Under the Khadi Mark Regulations, 2013, every person or certified khadi institution holding Khadi Mark registration must attach a Khadi Mark tag, label, or both.^[15] KVIC, constituted under the KVIC Act, 1956,^[14] certifies the institutions and administers the mark, and publishes state-wise lists of registered and certified khadi institutions.^[17]

The practical consequence for a buyer is simple. "Khadi-style", "khadi cotton" and "khadi look" are marketing descriptions with no certification behind them. The Khadi Mark is the only claim that means the cloth was hand-spun and hand-woven under a certified institution.

9. What this means if you buy khadi

Three things follow from the numbers. First, real khadi is a small and specific category — ₹7,869 crore of cloth against a ₹1.87 lakh crore programme — so genuine khadi is rarer in the market than the headlines suggest. Second, the price premium is labour, not branding: two hand processes where mill cloth has none, with the hank wage the visible portion. Third, the mark is the only verification available at the point of purchase.

For anyone buying hand-made Indian cloth more broadly, the handloom distinction is the more useful one day to day. A handloom weave carries the irregularity and breathability of hand-weaving without requiring hand-spun yarn, and covers a far wider range of fabrics and price points.

10. Where the data is weakest

Employment counts in this sector are the softest figures in it. The Fourth All India Handloom Census attracted published criticism over how workers were counted and what the totals implied.^[20] Khadi artisan numbers vary by source and definition — roughly 5,00,000 in KVIC's reporting,^[2] with the female share put at over 80 per cent there^[2] and around 65 per cent in independent evaluation.^[16]

Turnover and wage figures are firmer, because both are administered numbers: sales are booked and the hank rate is set by notification with an effective date.^[3] Where this report gives an employment total it should be read as an official estimate, not a headcount.

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