Legal notice to Fabindia puts spotlight on 2013 rule: firms selling khadi need official approval

On Saturday, the Khadi and Village Industries Commission filed a legal notice against leading clothing retail company Fabindia for misleading customers by selling readymade cotton garments as khadi without permission.

Khadi is handspun, handwoven cloth popularised by Mahatma Gandhi during the freedom movement. Images of Gandhi spinning at his charkha remain iconic even 70 years after Independence, so much so that even Prime Minister Narendra Modi echoed this imagery for the commission’s 2017 calendar.

But how did a cloth that Gandhi hoped every household would produce and consume instead of British-made products come to be so regulated that the government can now decide who can call what fabric khadi?

One of the reasons is the exorbitant price khadi now commands in the market, both because of its association with the freedom movement and in its own right as a handmade fabric.

“There are hundreds of khadi bhandars selling not even a centimetre of khadi fabric,” said Ravi Kiran, founder of Metaphor Racha, a Bengaluru-based store that sells only khadi material sourced from villages in Karnataka. “Even cloth not made on handlooms is sold as khadi. It is quite misleading.”

The Khadi and Village Industries Commission monitors the sale and business of all khadi products in the country. Established in 1956 by Jawaharlal Nehru’s government, its primary duty was to promote khadi production to boost employment in rural areas.

This changed in 2013 when the Central government issued Khadi Mark Regulations in a gazette notification, stating that no textile sold by any person or institution can be sold as khadi without having a “Khadi Mark” label issued by the commission. With a Khadi Mark, the government reasoned, consumers could be reasonably certain they were not being sold cloth made on powerlooms instead.

The Fabindia case

In its legal notice to Fabindia, the commission noted that it had corresponded with the company on the subject in August 2015 after the retailer advertised some fabric as khadi. It claimed that Fabindia had responded, saying, “As per direction issued by your office, we have stopped advertisement campaign in all media. We have also sent internal directions to stop selling the cloth with reference to Khadi.”

In September last year, the commission rejected Fabindia’s request for Khadi Mark certification, following discussions with the company’s representatives. But, according to the commission, Fabindia continues to sell clothes that claim to be cotton on the stitched labels but have khadi written on the price tags, which could mislead customers.

For now, Fabindia is playing it safe. It has pulled its khadi collection from its website. Its chief executive officer Viney Singh wrote in an email response to Scroll.in, “We are in receipt of the notice and have responded to KVIC, requesting a meeting with the designated authorities to understand the issues that have been raised, and to resolve them.”

Fabindia is a large enough company to be aware of the legal requirements, said Laila Tyabji, founder of Dastkar, a Delhi-based non-governmental organisation working to revive traditional crafts, including khadi production, in India. She pointed out that it is often smaller producers who are caught unawares.

“Small production units, especially artisan families and craft clusters in the informal sector, are generally unaware of these government regulations, which often vary from area to area, and keep changing, and suddenly get stuck when some zealous official decides to scrutinise the matter,” Tyabji wrote in the email.

Changing market

Making matters more complicated is the fact that weavers have a limited range of customers they can sell to, with the Central and state governments often being the largest buyers.

The Urmul Marusthali Bunker Vikas Samiti, a fair trade weaving organisation based in western Rajasthan, is an exception. The organisation works with weavers to sell handloom fabric, including a small amount of khadi, to around 20 private companies. One of these is Fabindia.

Rewataram Panwar, marketing manager of the organisation, is against increased government interference in their sales, saying this would impact their work. “We do not want to sell our products to the government because we do not want to do budget work,” Panwar said. “If we take their help in selling our products, then they will dictate their rules to us. We would rather work independently.”

As a non-governmental organisation working with handloom weavers, the Samiti does not require government permission to function. All it has to do is to pay taxes on its sales, which includes around 10 exhibitions each year and sales at its showroom in Jaisalmer. But if the government now prevents companies from selling handloom cotton as khadi, this might impact even weavers’ profits.

Fabindia buys only cotton, not khadi, from the organisation, so Panwar declined to comment on that aspect of their business.

Government intervention

Khadi production is already highly centralised for a fabric meant to be made at home, Ravi Kiran of Metaphor Racha said. There are only five major centres in the entire country from where weavers can buy raw cotton to spin into thread and then weave into fabric. This cotton is often of poor quality.

“The government has a 75% subsidy on cotton bought at these centres,” Kiran explained. “You pay only Rs 25,000 for Rs 1 lakh worth of cotton, so why would you think of starting on your own raw cotton units?”

He added, “I am very happy not to use the word khadi, but the government should tell me what other word I should use. We are trying to popularise khadi by using the word khadi, but if you end up selling it only in [government-run] khadi bhandars, I don’t think it makes any sense.”