It is an apex organisation under the Ministry of Micro, Small and Medium Enterprises, with regard to khadi and village industries within India, which seeks to - "plan, promote, facilitate, organise and assist in the establishment and development of khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary".

"The livery of freedom" – Mahatma Gandhi[3] Khadi, (pronounced Khādī) refers to hand-spun and hand-woven cloth.

Khadi is sourced from different parts of India, depending upon its raw materials - While the silk variety is sourced from West Bengal, Bihar, Odisha and North Eastern states, the cotton variety comes from Andhra Pradesh, Uttar Pradesh, Bihar and West Bengal.

Khadi poly is spun in Gujarat and Rajasthan while Haryana, Himachal Pradesh and Jammu and Kashmir Karnataka are known for the woolen variety.

The National Internet Exchange of India Domain Dispute Policy (INDRP) Arbitration Tribunal in New Delhi rejected the contention of a private entity that "Khadi" is a generic word.

[4][5][6] Any Industry that is located within a rural area, where the Fixed Capital Investment per Artisan (weaver) does not exceed One hundred thousand Rupees.

Furthermore, it has asked the MSME ministry to redesign the scheme in a manner that it should benefit the artisan and not the seller, which (has been) the case so far" With regard to this, A proposal received from the commission for introducing Market Development Assistance as a possible alternative to Rebate on Sale is being considered by the Government.

A major part of the Khadi grant is being utilised for the payment of sales rebate, which is considered a promotional expenditure.