Cottage industry, a industry that is based on a business or manufacturing activity carried in people's homes, usually a small scale business, but accounting to 80% of the manufacturing sector's employment in India. The cottage industry in India is a popular one in India as it can be started with very low investments. Usually unorganized with the production of goods takes place in the houses of labourers using conventional methods, the cottage industry has its origin in rural areas where unemployment and underemployment are prevalent.

While it is usually in a small scale, the small-scale industries and cottage industries slightly differ depending upon their features, location and ownership. Contributing to 30% of the Indian GDP, the cottage industry helps the Indian economy by involving the other unemployed workforce of rural areas. While the small-scale industries are mostly set up in urban and semi-urban areas whereas cottage industries are more concentrated in rural areas.

Another difference between the small-scale industries and the cottage industry i.e. the small-scale industries are slightly larger and hire employees to work and cottage industries are mostly run by members of the family.

This is followed by the difference that the cottage industries are not mass producers and are mainly focused on meeting the local need while the small-scale industry focuses and covers a wider range of product and areas.

Scope and Potential of Cottage Industries

Why one must invest in the cottage industry in India? Well, the key advantage of cottage industry is that it has immense potential of providing employment. Yes, the same can be proved as for an instance, it is already employing 2.2 million people in the state of West Bengal alone. When we talk about the total industrial output in India, 40% of the same is a contribution of small scale and cottage industries.

As a social benefit, the cottage industry in India offers economic independence to women in developing and developed countries as it continues to facilitate employment option to numerous families throughout the year.


AS mentioned above, the cottage industry is basically a home-based small business, more like self-employment or employment of a small group of people, so here are various industries that come under the cottage industry in India:

  1. Cotton Weaving: The most famous of all the cottage industries in India and one of the most important cottage industry in India, Cotton Weaving's popularity is a result of the fact that cotton clothes are widely worn across the country. From different regions mainly concentrated in Maharashtra, Tamil Nadu, and Gujarat to different vibrant colour, traditional designs, variety of patterns increases the demand for cotton clothes in the country.
  2. Silk Weaving: Something that has a traditional importance in the country is also a profitable business. India,being a major producer and exporter of silk has various typesof silk produced as well including Mulberry, Tassore, Muga, and Eri which are the different types of silks produced in the country. It is also a fact that 70% of the total silk weaving industries is situated in Karnataka.
  3. Carpet Making: Something that has its origin dating back to the Mughal era, the carpet making industry is mainly found in Kashmir, Rajasthan, Punjab, Uttar Pradesh, Andhra Pradesh, and Punjab. While the Kashmiri carpet, durries and coir carpet are in great demand owing to its superior quality and texture, the Indian government has set up the Carpet export council for promoting the knotted rugs and various other types of floor coverings from across the country.
  4. Leather Works: Visit the Delhi Haat, a place where all the handicrafts from different Indian states are displayed and what you will find is different leather bags, shoes, and other handicrafts made with leather. With the regions of India famous for leather production being Tamil Nadu, West Bengal, and Uttar Pradesh, these states puts India on the map as the major supplier of high-quality leather and meets around 10% of the global leather demands.
  5. Metal Works: Indian metal works is a business where the metals like silver, cooper, iron, and alloys like bronze are used to manufacture items ,like pan, pots, utensils and other things including mythological character sand animals hence , the Indian metal handicrafts are appreciated worldwide and it is a major contributor to the Indian economy

While many of these industries have been there in the country from ages, the art and skill they require has been passed from ancestors to their next generation and which sadly is getting scarce. While the cottage industry faces competition from medium and large industries which are seeing the better side of the customers with their high-end technologies for production, there is an urgent need for the implementation of modern technology which not only enhances productivity but also develops skills of the labourers to meet the requirements of the local market.

Female Entrepreneurs

No stories found.

Marketing Tips

No stories found.

Software's for Small Business

No stories found.
StartupCity Magazine