INTRODUCTION
Chhattisgarh, often referred to as India’s rice bowl, is home to a distinctive natural fiber called Kosa Silk. This silk originates from the wild Antheraea mylitta silkworm, which feeds on leaves from Saja and Sal trees found in the region’s lush tropical forests. Kosa Silk is celebrated worldwide as the “Golden Thread.” For tribal communities in areas like Bastar and Janjgir-Champa, this silk represents more than just fabric; it embodies their rich heritage and plays a vital role in their everyday lives and livelihoods. Unlike silk produced from domesticated silkworms, Kosa is collected directly from the forest, creating a deep connection with nature. Rural folks rely on these native trees for their livelihoods. Over the past decade, the Kosa industry has seen significant financial growth. Back in 2015, it made ₹85 crore, but by 2024, that number jumped to ₹160 crore. That’s an impressive 88% increase. Meanwhile, exports of Kosa items saw a huge rise of 233%, highlighting their growing demand in luxury markets globally. Today, around 35,000 craftspeople work in this sector, and women make up about 65% of that workforce. This clearly demonstrates its potential to empower women. People often talk about business success and moving out of poverty, but there’s a hidden issue: an economic mystery. Kosa silk is marketed as a luxurious, costly product in fashion capitals around the globe. Yet, the local artisans who craft it, those with deep-rooted expertise in harvesting and weaving and remain trapped in perpetual poverty. Despite the industry’s expansion, a tribal weaver typically earns just ₹5,000 to ₹6,000 each month. Looking at this through the lens of Law and Economics, the difference indicates a breakdown in how markets function and how legal safeguards operate. Despite obtaining the Geographical Indication (GI) Tag in 2010, which resulted in a 10% increase in revenue in 2018, the advantages have been unevenly taken by intermediaries. Producers encounter elevated transaction costs, limited access to institutional financing, and an absence of direct market links. This paper aims to explore how legal structures such as the Biological Diversity Act and technological solutions like blockchain can close this gap, turning the Golden Thread from a representation of cultural heritage into a means for true financial autonomy.
Chhattisgarh’s Kosa silk industry shows significant growth, with raw cocoon production rising 48% to 475 metric tons between 2015 and 2024, yet artisans remain trapped in poverty due to an “intermediary trap” and market failures. Despite raw silk prices reaching approximately ₹5,100/kg by 2023, market vulnerabilities allow middlemen to absorb profits, leaving local weavers as price-takers with low earnings.
Objectives of the study
1. To analyze the Kosa silk value chain and identify structural market frictions.
2. To evaluate the effectiveness of GI Tag and the Biological Diversity Act in safeguarding indigenous intellectual property rights and preventing market identity theft of Kosa silk
3. To suggest changes that can help reduce poverty and give tribal communities more control over their own income and resources.
Research Method
This study is based on secondary data analysis using a multi-dimensional approach. It involves a review of policy and legal documents, including the Geographical Indication Act, the Biological Diversity Act, and relevant government notifications, to understand the regulatory framework. Additionally, it focuses on published works on indigenous textiles, intellectual property rights, and rural development, including books, scholarly papers, and case studies. Value distribution in the Kosa silk supply chain is also examined by analyzing market data, which includes trade figures, NGO reports, and industry surveys. The findings and conclusion are based on a methodical synthesis and interpretation of various sources, supported by the examination of corresponding data, statistics, and comparative observations.
Review of Literature
Geographical Indications (GI) tags offer cultural recognition, but their economic advantages frequently do not reach grassroots craftsmen due to lax enforcement, according to Basu and Roy’s (2015) analysis of the socioeconomic impact of GI on Indian handloom businesses. Building on this, Sahu (2018) examined how Kosa silk supports tribal livelihoods in Chhattisgarh, highlighting how traditional cocoon-rearing knowledge is still underappreciated because middlemen keep the majority of market gains. In the same way, Kumar and Singh (2020) examined the relationship between indigenous textiles and intellectual property rights, arguing that legal safeguards by themselves are ineffective unless combined with structural market reforms meant to reduce poverty. More recently, Sharma (2022) emphasized the revolutionary potential of digital infrastructure and e-commerce platforms, demonstrating how direct-to-consumer models lower transaction costs and improve rural artisans’ financial security. Collectively, these studies underscore the need for a combined approach of legal empowerment, market restructuring, and digital innovation to ensure that indigenous communities benefit equitably from their cultural and economic contributions.
VALUE CHAIN ANALYSIS: FROM FOREST TO FASHION
The Kosa silk supply chain illustrates the step-by-step transformation of a forest-derived biological resource into a premium textile, carrying both economic importance and legal challenges. In its initial stage, tribal communities gather cocoons from forest regions, forming a vital component of the non-timber forest produce (NTFP) economy. India accounts for nearly 70–75% of global tasar silk output, with states such as Chhattisgarh and Jharkhand serving as leading centers of production1. However, only 10–15% of the final product value is usually given to primary collectors, underscoring disparities at the beginning of the value chain2.
Women constitute about 60 and 65 % of the workforce and are mostly responsible for the processing stage, especially yarn reeling.3 This stage is still mostly manual, which limits productivity and income levels despite its significance for quality control. According to reports, reelers make between ₹150 and ₹300 per day on average, which raises questions about both economic viability and working conditions4. During the production phase, skilled weavers use traditional handlooms to turn yarn into completed fabric. Even though this stage adds a large amount of artisanal value, production costs have grown due to growing input costs, particularly raw silk prices, which are between ₹5,000 and ₹5,500 per kilogram.5 Because of structural limitations in the production chain, independent weavers frequently only receive 20–25% of the final market value6. Kosa silk products are marketed into luxurious items in domestic and foreign markets at the marketing and retail stage. Due to branding, geographical indication identification, and export demand, a saree that costs ₹2,000 to ₹3,000 at the production level may retail for ₹10,000 to ₹25,000 or more7. However, a disproportionate portion, often more than 50% of the ultimate value, is taken by intermediaries and retailers, highlighting the unequal distribution of economic gains. Studies indicate that the GI framework’s benefits are not consistently distributed to grassroots stakeholders, despite the fact that it seeks to guarantee authenticity and safeguard producer interests8.
VISUALIZING THE ECONOMIC GAP
| Year | Cocoon Production (Metric Tons) | Workforce (Approx. Count) | Avg. Weaver Monthly Income (₹) |
|---|---|---|---|
| 2015 | 320 | 28,000 | 4,200 |
| 2018 | 365 | 30,500 | 4,800 |
| 2021 | 410 | 32,000 | 5,300 |
| 2024 | 475 | 35,000 | 6,000 |
Source: Derived from Chhattisgarh State Handloom Development Federation and industry growth reports.
An analysis of industry data from 2015 to 2024 highlights significant trends in the growth and distribution dynamics of the Kosa silk sector. Table 1 shows that total industry revenue rose from ₹85 crore in 2015 to ₹160 crore in 2024, reflecting an overall increase of about 88 percent. Export performance was especially noteworthy, climbing from its 2015 baseline to 233 percent by 2024. At the same time, the annual growth rate declined gradually from 10 percent in 2018 to 7 percent in 2024, suggesting that the market may be stabilizing after a period of rapid expansion. These figures indicate that although the industry has achieved substantial overall growth, the pace of expansion is slowing over time.
The graph provides further insights into production and livelihood indicators, revealing a contrasting picture at the community level. Cocoon output increased from 320 metric tons in 2015 to 475 metric tons in 2024, a rise of nearly 48 percent. Employment in the sector also grew, with the workforce expanding from about 28,000 to 35,000 individuals, an increase of roughly 25 percent. Despite these gains in production and participation, the average monthly income of weavers rose only modestly, from ₹4,200 in 2015 to ₹6,000 in 2024, representing growth of about 43 percent.
This visualization makes clear that while output and participation expanded significantly, income growth lagged behind, underscoring the imbalance in value distribution across the Kosa silk sector. While industry revenue increased by 88%, weaver wages only increased by 43%, highlighting a widening gap in profit distribution. The increase in cocoon production (48%) has outpaced workforce growth (25%), suggesting a higher labor intensity per artisan that is not reflected in their earnings. This divergence between industry expansion and artisan earnings highlights a clear imbalance in value distribution across the Kosa silk supply chain. While overall revenue nearly doubled, the benefits reaching primary producers and weavers have been relatively limited. The data suggests that much of the value addition occurs in downstream activities such as marketing, branding, and retail, where intermediaries capture higher margins. Moreover, the increase in cocoon production compared to workforce growth points to rising labor intensity, indicating that artisans are contributing more output without receiving proportionate improvements in income.
THE LEGAL FRAMEWORK: PROTECTION VS. IMPLEMENTATION
The sustainability of Kosa silk as a premium heritage craft is contingent upon the establishment of a strong legal framework that safeguards both the identity of the product and the biological resources underpinning its production. Nevertheless, a considerable gap persists between statutory provisions and their practical implementation. Tribal artisans frequently lack the legal awareness and institutional support necessary to activate these protections.
In 2010, Champa Silk Fabric was granted a Geographical Indication (GI) tag under the Geographical Indications of Goods (Registration and Protection) Act, 19999. The primary objective of this recognition was to differentiate authentic, hand-woven Kosa silk from low cost synthetic substitutes and power loom fabrics marketed under the Kosa name. Although the GI tag initially contributed to a revenue increase of approximately 10 percent in 2018, its effectiveness has been constrained by limited post-market surveillance. Enforcement remains largely a private responsibility, placing the burden of identifying and prosecuting infringements on weavers’ cooperatives, which often lack the financial capacity to pursue litigation against large scale manufacturers10. As a result, the market continues to be saturated with polyester blends marketed as Kosa style fabrics, thereby diluting the brand equity of genuine Kosa silk, often referred to as the Golden Thread.
As a forest-based product, Kosa silk falls within the scope of the Biological Diversity Act (BDA), 2002, which seeks to ensure the fair and equitable sharing of benefits derived from the use of biological resources and associated traditional knowledge11. Since the Antheraea mylitta silkworm is a wild resource collected by tribal communities, the Act theoretically requires that commercial entities utilizing these resources share profits with local Biodiversity Management Committees (BMCs).
The Biological Diversity Act also functions as a safeguard for Indigenous Intellectual Property by preventing external corporations from patenting traditional rearing and reeling techniques without prior informed consent12. Within the Kosa silk value chain, this legal provision is intended to ensure that the wealth generated from forest resources remains with the forest-dwelling communities. Despite the presence of such advanced legal instruments, enforcement continues to be the critical weakness of the Kosa industry. Several factors contribute to this shortcoming. One major issue is institutional absence, as many tribal regions lack functional Biodiversity Management Committees, leaving no formal mechanism to claim Access and Benefit Sharing from large commercial buyers. The legal process of registering as an Authorized User of a GI tag is complex and financially burdensome for a weaver earning approximately ₹5,000 per month13. Current legislation primarily emphasizes the roles of producers and consumers, while largely neglecting intermediaries who operate within informal and unregulated spaces. In the absence of a legal mandate for transparent pricing or mechanisms such as smart contracts, the profit-sharing provisions envisioned under the Biological Diversity Act remain largely theoretical and fail to translate into tangible financial benefits for grassroots stakeholders.
LAW AND ECONOMICS: INTERFACE IN THE KOSA SILK SECTOR
An important lens for analyzing how institutional structures, property rights, and transaction costs affect livelihood outcomes in the Kosa silk sector is provided by the interplay between law and economics. The industry still has structural inefficiencies that restrict its ability to reduce poverty even though it is a high-value traditional textile. From a financial point of view, ensuring that producers receive a fair portion of value requires well defined and enforceable property rights. However, in the case of Kosa silk, tribal artisans and rearers frequently work within unofficial or inadequately enforced legal structures, which limits their capacity to claim ownership of both traditional knowledge and raw materials.
The application of the Coase Theorem posits that in the absence of transaction costs, resources would be allocated efficiently regardless of the initial distribution of rights. In practice, however, the Kosa silk value chain is marked by significant transaction costs, including restricted market access, inadequate information flows, and weak bargaining power. These constraints limit the capacity of tribal cooperatives and artisans to engage directly in high-value markets, thereby reducing their ability to capture the full economic potential of Kosa silk. Empirical evidence demonstrates that intermediaries frequently appropriate more than half of the final product value, while primary producers receive less than 15%, illustrating a significant deviation from efficient market outcomes14.
Persistent market failures continue to undermine efficiency in the Kosa silk sector. Artisans lack access to timely price data, demand trends, and quality standards, leaving them dependent on intermediaries and limiting their bargaining power. Credit constraints further exacerbate the problem, with many producers relying on informal lenders charging 24 to 36 % interest, which perpetuates debt and restricts investment in productivity15. Fewer than 30% of workers have access to formal financial systems, constraining mobility16. At the same time, synthetic substitutes priced 30 to 40 % lower erode demand for authentic Kosa silk17. Although geographical indication protection exists, weak enforcement and limited consumer awareness reduce its impact. Together, these factors create a structurally imbalanced value chain, highlighting the need for stronger institutions, better financial inclusion, and effective intellectual property enforcement.
LEGAL AND ECONOMIC STRATEGIES: TOWARDS FINANCIAL INDEPENDENCE OF KOSA SILK WEAVERS
The transition of Kosa silk artisans into a self-sustaining economic class requires a shift from raw material extraction to localized value addition through decentralized, state-supported processing units in regions such as Bastar and Janjgir Champa. Establishing community-managed reeling and spinning centers can retain value within tribal economies and potentially raise artisan margins by up to 25 percent by reducing reliance on intermediaries. This must be complemented by digital empowerment through Direct to Consumer platforms facilitated by the Chhattisgarh State Handloom Development and Marketing Federation, enabling weavers to access premium markets and bypass traditional middlemen. Technological tools such as blockchain can further enhance transparency and ensure real-time implementation of Access and Benefit Sharing mechanisms under the Biological Diversity Act18. In addition, strengthening intellectual property protection beyond Geographical Indications to include safeguards under the Designs Act, 200019, can help preserve unique tribal patterns and traditional knowledge from misappropriation.
FINDINGS
The study finds that despite significant growth in the Kosa silk industry, value distribution across the supply chain remains highly unequal. Despite the industry’s 88% growth to ₹160 crore and a 233% surge in exports, artisan monthly wages remain stagnant between ₹5,000 and ₹6,000. Primary producers and weavers capture a disproportionately low share of the final market value due to high transaction costs, information asymmetry, and dependence on intermediaries. Limited access to formal credit, weak enforcement of intellectual property rights, and competition from synthetic alternatives further constrain income growth and financial security. While legal frameworks such as Geographical Indications and the Biological Diversity Act exist, their benefits are not effectively transmitted to grassroots stakeholders.
CONCLUSION
Economic growth and equitable livelihood outcomes are clearly at odds, as demonstrated by the Kosa silk value chain. Stronger institutional frameworks, better market and financial access, and more successful enforcement of intellectual property rights are all necessary, according to a law and economics viewpoint. In order to guarantee equitable value allocation and provide craftspeople in the industry with long-term financial independence, it is imperative that these structural deficiencies be addressed. The industry can do away with exploitative middlemen by combining blockchain-driven transparency with regional manufacturing centers and direct-to-consumer digital markets. Kosa silk can only be transformed from a cultural heritage into an effective tool for tribal financial independence and poverty alleviation through these institutional and technological improvements.
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Footnotes
1. Central Silk Board, Annual Report 2022–23, Ministry of Textiles, Government of India.
2. National Bank for Agriculture and Rural Development (NABARD), Value Chain Analysis of Non-Timber Forest Products, 2021.
3. Ministry of Textiles, Government of India, Sericulture and Silk Industry Report, 2022.
4. International Labour Organization, Labour Conditions in Textile Sector, 2020; NSSO Data Reports.
5. Central Silk Board, Market Price Reports, 2023.
6. UNESCO, Craft Economy and Inclusive Growth Report, 2019.
7. Export Promotion Council for Handicrafts (EPCH), Handicraft Export Data, 2022.
8. World Intellectual Property Organization, Geographical Indications and Traditional Knowledge, 2017; Das, K. (2010). Socio-economic Dimensions of Handloom Sector.
9. Geographical Indications Registry, Champa Silk Fabric – GI Application No. 137, Intellectual Property India (2010)
10. Das, K., Socio-economic Implications of Geographical Indications in India, Centre for WTO Studies, 142-145 (2021)
11. Section 21, The Biological Diversity Act, 2002, No. 18, Acts of Parliament, 2003 (India)
12. Sahai, S., Indigenous Knowledge and Its Protection in India, 18(1) Journal of Intellectual Property Rights, 24-28 (2013)
13. Jena, P. R., & Grote, U., The Economic Impacts of Geographical Indications: A Case Study of Indian Handlooms, 15(2) World Trade Review, 215-230 (2020
14. National Bank for Agriculture and Rural Development (NABARD), Value Chain Analysis of Non-Timber Forest Products, 2021
15. Reserve Bank of India, Report on Rural Credit and Financial Inclusion, 2022
16. National Sample Survey Office (NSSO), Government of India, Household Data Reports
17. Ministry of Textiles, Handloom Sector Report, 2022
18. Government of India, Biological Diversity Act, 2002 (Access and Benefit Sharing provisions)
19. Government of India, Designs Act, 2000.