This case can be useful for courses
in rural entrepreneurship, sustainable business, and textile marketing.
Introduction
Khadi, a handwoven fabric made from
cotton, silk, or wool, has deep roots in India's history and culture.
Traditionally handspun and handwoven, this fabric represents India's ancient
textile tradition. It gained prominence during India's struggle for
independence when Mahatma Gandhi promoted Khadi as a symbol of self-reliance
and national pride. Today, the Khadi industry continues to thrive, contributing
significantly to the rural economy and the livelihoods of artisans,
particularly women.
Historical
Context
Khadi, also known as
"khaddar," became a pivotal element of India's identity during the
Mughal era when Emperor Akbar promoted cotton over silk. However, the most
significant phase of Khadi's revival occurred during the freedom movement.
Mahatma Gandhi envisioned Khadi not just as fabric but as a movement. It
symbolized India's rejection of British-manufactured textiles and an embrace of
homegrown, handmade products. Post-independence, Khadi continued to be a
critical part of the rural economy, promoted by the Indian government through
various initiatives.
Khadi
in Modern India
The Khadi and Village Industries
Commission (KVIC) has played a key role in promoting Khadi, especially through
campaigns such as "Make in India," "Vocal for Local," and
"Aatmanirbhar Bharat" (self-reliant India). Over the last few years,
Khadi has seen remarkable growth. For instance, between FY17 and FY21, Khadi
production rose from ₹1,520.8 crores to ₹1,904.5 crores, and Khadi sales grew
at a compound annual growth rate (CAGR) of 13.2%.
This growth is partly attributed to
the rise in domestic demand and the increasing interest of international
markets, including the USA, UK, and UAE. A significant development occurred in
2019 when Khadi products received a unique Harmonised System (HS) code, further
boosting exports. In a world turning toward eco-friendly and sustainable
products, Khadi has potential for international expansion.
The
Manufacturing Process
The production of Khadi fabric is
labor-intensive. It begins with the manual carding of raw cotton into threads,
followed by washing, dyeing with natural dyes, and drying. Finally, the fabric
is woven on handlooms, ensuring that each piece of Khadi is unique. This
handmade nature gives Khadi its exclusivity but also presents challenges such
as inconsistency and higher prices, which makes global expansion difficult.
Yet, Khadi has continued to symbolize craftsmanship, tradition, and
sustainability.
Marketing
Strategies of Khadi
The Indian government and KVIC have
worked to revive Khadi's popularity through innovative marketing strategies.
Khadi is promoted through exhibitions, fairs, workshops, and even training
programs aimed at empowering rural artisans to create and sell their products.
The "Khadi Gram Udyog Vikas Nigam Limited" (KGUVNL) was set up as a
public sector enterprise to commercialize Khadi production.
Khadi’s domestic appeal is rooted in
cultural identity, but its international success has faced challenges, such as
high production costs and a lack of availability. However, KVIC’s push towards
eco-friendly branding has seen increasing demand for Khadi in international
fashion markets. The difficulty lies in balancing the uniqueness of Khadi with global
market demands for affordable and consistent fabric.
Challenges
and Opportunities
While Khadi has expanded, it faces
several challenges, including:
- High Production Costs: The handmade nature of Khadi makes it labor-intensive
and more expensive than mass-produced fabrics, limiting its appeal in
global markets.
- Lack of International Presence: While efforts have been made to increase Khadi's
presence internationally, it remains largely unavailable to foreign buyers
due to supply chain constraints and pricing issues.
- Rural Dependency:
Khadi production is largely confined to rural areas, where infrastructure
may be inadequate to scale up production to meet international demand.
- Brand Awareness:
Although Khadi is widely known in India, international consumers often
struggle to differentiate it from other handloom fabrics. Increased
marketing efforts are needed to position Khadi as a premium, eco-friendly
fabric globally.
Despite these challenges, Khadi has
immense potential for growth due to the rising demand for sustainable products
worldwide. The KVIC and other stakeholders must develop strategies to make
Khadi more accessible, affordable, and visible in international markets while
maintaining its handmade, eco-friendly appeal.
Discussion
Questions:
- What are the key factors that have contributed to the
growth of the Khadi industry in India?
- How did Mahatma Gandhi's promotion of Khadi during the independence
movement influence its significance in modern India?
- What challenges does Khadi face in global markets, and
what strategies can be employed to overcome these barriers?
- Discuss the role of government initiatives such as
'Make in India' and 'Aatmanirbhar Bharat' in promoting Khadi. How
effective have these been?
- What are the potential benefits and drawbacks of
expanding Khadi production beyond rural areas to meet international
demand?
Teaching
Notes
- Learning Objective:
The primary goal of this case study is to understand the evolution of the
Khadi industry, its impact on rural livelihoods, and the challenges it
faces in balancing tradition with modern market demands. Students will
explore marketing strategies and government policies to promote Khadi as a
sustainable fabric, both domestically and internationally.
- Discussion Focus:
The case study should spark discussions on balancing heritage and
tradition with modern business practices. Students can explore how Khadi
can maintain its eco-friendly identity while addressing global
competition. The debate over pricing strategies and expanding the market
for sustainable products should also be central.
- Additional Readings:
- KVIC Annual Reports on Khadi’s growth and marketing
strategies.
- Case studies on other traditional Indian industries
facing global challenges.
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