Reviving Khadi in India



Themes: Corporate Restructuring
Period : 1985-2003
Organization : Minister for Small Scale Industries
Pub Date : 2003
Countries : India
Industry : SSI

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Case Code : BSTR055
Case Length : 9 Pages
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Reviving Khadi  in India | Case Study

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Khadi Loses its Sheen Contd...

The Khadi brand included products like essential oils, herbal oil & soaps, face scrubs, dry fruit honey, designer garments etc. The Khadi brand was introduced exclusively for exports and upmarket. The fabric was being promoted as a fashion fabric. Many high profile fashion designers were roped in to create garments using the fabric. KVIC allotted huge funds into research and development to improve the quality of Khadi. It allotted around Rs. 0.4 billion for promoting the fabric emphasizing its Unique Selling Proposition (USP), eco-friendliness.

Background Note

Khadi has its roots in the freedom struggle of India. Khadi, the home spun cloth was central to Gandhi's vision of self- reliance and self- rule. Gandhi wanted Indians to spin their own cotton thread and to weave Khadi, thereby, providing employment to many Indians and contributing to the country's self-sufficiency.

Post independence, Khadi fabrics were woven on handlooms from cotton, silk, and woollen yarn, which were hand-spun. The production of Khadi is labour intensive as the weaving has to be done manually. The pure cotton collected from cotton farms is first ginned and bales are made.

These bales are then converted into rowings and distributed to different spinning units. In the spinning units, the cotton fibre is manually converted into yarn using charkas.4 The yarn is then woven into fabric using handlooms.

During the post-independence era, Indian industrialists set up capital intensive textile mills. Due to mass production, these mills could offer fine cloth at lower prices. Synthetic material like polyester was available at a very low price compared to Khadi. Thus despite all policy incentives to popularize Khadi, people bought machine made textiles.

In order to popularize khadi among the masses, in 1957, the government set up the KVIC. It had the following broad objectives:

- The social objective of providing employment
- The economic objective of producing saleable articles, and
- The wider objective of creating self-reliance amongst the poor and developing a strong rural community spirit.

Besides Khadi, KVIC also dealt with other products such as toilet soaps, detergents, honey, pickles, spices, incense sticks, handmade paper, leather, ceramics, and many other agro-based products (Refer Exhibit 1 for product range of KVIC). To keep the spirit of Khadi alive and promote it as a national fabric, KVIC has set up many outlets across India. As a result thousands of spinners, who wove the fabric could sell their output through the vast network of KVIC retail outlets.

However, the situation did not improve much. The poor quality of garments sold through the KVIC outlets, resulted in customers' dissatisfaction. People even complained that the quality of Khadi had deteriorated and hence it faded easily. In the 1990s, very few people bought Khadi. Khadi was bought only during the annual discount sale.

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4] Charka is the Indian version of the spinning wheel.