The handloom sector plays a very important role in Indian economy, the importance of handloom sector in the national economy cannot be over emphasized on account of having the advantage of flexibility of small production uniqueness innovation and adaptability to the export requirement. The dawn of 21st century has opened up challenges and problems for the handloom industry. Globalization also has shaken the foundation of the industry. With the impending dismantling the quota in 2004 under mandate from the agreement in textile and clothing the WTO focus has clearly shifted to the Indian textile and clothing export.In Kerala, handloom industries were facing severe problems after the introduction of economic reforms and WTO regime. Handloom industry was concentrated in Kannur district. In Kannur district, 44 handloom industrial units operates handloom and power loom sector. Thus the present study was carried out in Kannur district. Four handloom industrial units can be selected for investigation. The present study mainly concentrated in the various aspects of the handloom industry in Kannur district.