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The handloom sector of Himachal Pradesh holds a unique position in the world of handloom textiles in terms of its history, heritage, process, design and material use. With the advent of powerloom and machine made textiles and availability of ready to wear economical clothing in variety of style, colour, design, the handloom sector in India came under tremendous pressure. However, the cultural roots, affinity to the heritage and the efforts and initiatives by the Governments both at the Centre and at the state helped the handloom sector survive and grow in many parts of the country. The situation in Himachal is no exception. Incidentally the handloom of Himachal has got a very strong backward linkage due to its attractiveness as a crowded tourist destination and secondly due to the rising eco-consciousness of the customers around the world. This research study is an attempt to understand the socio economic factors of handloom weavers of Himachal Pradesh and find the factors that have worked as incentives for certain districts which had at least able to check the continuous erosion in number of handloom weavers as compared to other parts of Himachal , and made them continue with the economic activity producing handloom fabrics. This study is concentrated in various weaving clusters of Himachal Pradesh, and the key finding of the study has been that in spite of decrease in handloom weaver population in the state of Himachal Pradesh, Kullu has been able to retain and prosper its reputation as the handloom capital of Himachal Pradesh. Another major outcome of the present study that has come out that professionally well managed cooperatives are the best safeguard for handloom sector.