Khadi (pronounced [kʰaːdiː], Khādī), derived from khaddar, is a hand-spun and woven natural fibre cloth promoted by Mahatma Gandhi as swadeshi (self-sufficiency) for the freedom struggle of the Indian subcontinent, and the term is used throughout India, Pakistan and Bangladesh. The first piece of the hand-woven cloth was manufactured in the Sabarmati Ashram during 1917–18. The coarseness of the cloth led Gandhi to call it khadi. The cloth is made from cotton, but it may also include silk or wool, which are all spun into yarn on a charkha. It is a versatile fabric that remains cool in summer and warm in winter. To improve its appearance, khadi is sometimes starched to give it a stiffer feel. It is widely accepted in various fashion circles. Popular dresses are made using khadi cloth such as dhoti, kurta, and handloom saris such as Puttapaka Saree, Kotpad Handloom fabrics, Chamba Rumal, and Tussar silk. Gajam Anjaiah, an Indian master handloom designer and a recipient of the Padma Shri, is known for his innovation and development of tie-dye handloom products along with the Telia Rumal technique of weaving products based on the Ikat process.

Greco-Roman merchants imported finer cotton in large quantities to Roman Empire. In medieval times, cotton textiles were imported to Rome through the maritime Silk Road. Arabian-Surat merchants traded cotton textiles to Basra and Baghdad from three areas of Gujarat, the Coromandel Coast and the East Coast of India. To the east, trade reached China via Java. 14th-century Moroccan traveler Ibn Battuta mentioned Delhi sultan Muhammad bin Tughluq sending five varieties of cloth to the Yuan emperor in China. Some of the textiles are stored in repositories of the Victoria and Albert Museum, London.

After the First Indian War of Independence in 1857, domestic textile production by mill or traditional methods declined to its lowest levels before khadi emerged as a "silent economic revolution" as an outcome of a long and laborious evolutionary process.

The American Civil War (1861–1865) caused raw cotton crisis in Cottonopolis Britain. Indian cotton at cheap prices was sourced for them as the textile industry did not exist in India, and hand spinning was a dying art. During Victorian era (1837–1901), 47 mills existed in the 1870s but Indians still bought clothes at an artificially inflated price, since the colonial government exported the raw materials for cloth to British fabric mills, then re-imported the finished cloth to India. In the Edwardian era (1901–1914) the Swadeshi movement of boycotting foreign cloth remained prominent. During the first two decades of the 20th century it was backed by nationalist politicians and Indian mill owners.

In 1922, Mahatma Gandhi requested the Indian National Congress (INC) to start a khadi department. In 1924, due to a large amount of work, a semi-independent body All India Khadi Board (AIKB) was formed which liaisoned with the INC's khadi department at the provincial and district levels. In 1925, the All India Spinner Association (AISA) was formed comprising the khadi department and AIKB. Mahatma Gandhi was the founder of AISA. He made it obligatory for all members of the INC to spin cotton themselves and pay their dues in yarn. Gandhi collected large sums of money to create grassroots-level khadi institutions to encourage spinning and weaving which were certified by AISA. Handspun yarn was expensive and of poor quality, and weavers preferred yarn produced by mills because it was more robust and consistent in quality. Gandhi argued that the mill owners would deny handloom weavers an opportunity to buy yarn because they would prefer to create a monopoly for their own cloth. When some people complained about the costliness of khadi to Gandhi, he only wore dhoti, though he used wool shawls when it got cold. Some were able to make a reasonable living by using high-quality mill yarn and catering to the luxury market. Gandhi tried to put an end to this practice by threatening to give up khadi altogether, but since the weavers would have starved if they listened to him, they ignored the threat. In 1919, Gandhi started spinning at Mani Bhawan Mumbai and encouraging others to do so. He invented Patti Charkha, using a double-wheel design to increase speed and control while reducing size. In 1946, when huge funds were being spent on development for more productive charkhas, he recommended takli over charkha.

The khadi movement began in 1918 and was marked with its own changing dynamics. Initially, a clear emphasis could be seen on using khadi as an economic solution due to stagnation, from 1934 onwards the fabric became something that villagers could use for themselves.

In 1921, Gandhi went to Chandina Upazila in Comilla, Bangladesh, to inspire local weavers and consequently in the greater Comilla region, weaving centers were developed in Mainamati, Muradnagar, Gauripur and Chandina.