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The handloom industry holds immense significance in India's rural economy and culture. This study focuses on the economic aspects of Assam's handloom industry, examining its current production status and major challenges based on existing literature. Assam, the gateway to Northeast India, is rich in cottage industries, among which handloom stands out as the largest. The sector plays a crucial role in rural socio-cultural life by preserving traditions, providing livelihoods, generating supplementary income, and promoting women's economic empowerment. Using secondary data, the study analyzes handloom cloth production in Assam. District-wise data show a significant concentration of production in a few districts, particularly Dhubri, Dhemaji, and Barpeta, which together account for nearly two-thirds of the state's total output. While districts in lower and upper Assam serve as major production hubs, hill and remote districts exhibit very limited production, highlighting the need for targeted government policy interventions and capacity-building programmes to ensure balanced regional development. Existing literature identifies economic hardship, skill gaps, market and infrastructure deficiencies, educational and awareness barriers, and technological limitations as key constraints on the handloom sector's growth. Addressing these interconnected challenges is necessary to enhance productivity, support weavers' livelihoods, and preserve the cultural heritage of traditional handloom weaving in Assam. The sustainability of Assam's handloom industry depends on a combination of financial support, skill development, infrastructure improvement, awareness programs, and technological modernization. Properly implemented policy interventions can significantly boost productivity, innovation, and market competitiveness.