The cottage industry provides employment opportunities, and women empowerment, and assures equitable distribution of national income. In the cottage industry products are produced at a low level and work is done by skilled workers. Cottage products are uniquely reflecting the traditional myths, folklores, religious beliefs, cultural ethos, and rich heritage of India. Metal crafts, wood crafts, bamboo products, products made from glass, khadi, handloom, and handicraft products are major parts of the cottage industry. Every state and region of India has some expertise in producing some special products. Patan patola of Gujarat and Kashmiri pashmina shawls of Kashmir are famous for their embroidery. The cottage industry has a long and traditional history in India. A number of crafts had been developing since then. The concept of a cottage industry in rural India has suffered greatly since the start of British rule. This industry faces challenges such as limited availability of raw materials, non-availability of timely and adequate credit, inefficient management and marketing, and competition with large-scale industries. There are government organizations, schemes, and programs that are contributing to flourishing the cottage industries in India. The cottage industry needs change in traditional marketing practices, provision of adequate credit, infrastructure, technological support, and branding of products.