KKGSS was established on 1 November 1957 with the intention of establishing a federation that addressed the need for Khadi and other village industries to develop. Another of the federation 's objectives was to provide rural youth employment opportunities in these sectors. Around 58 institutions were placed under the aegis of this federation around the state. The head office is in Hubli and is spread over 17 acres of land.Khadi production began in the year 1982.This federation also runs a training college to train students in textile chemistry. The aim of this college is to produce technicians that will improve the quality of the fabrics. All government officials buy from them the Indian flags.

The flag is created by KKGSS Khadi device. KKGSS has been certified by the Khadi and Village Industries Commission as the sole Indian flag manufacturer and supplier to the whole country. There are 100 specialist spinners and 100 weavers used to make the flag. The cloth needed for the flag comes from the unit of KKGSS in Bagalkot and is divided into three lots, each of which is to be dyed with one of the three main colors in the Indian flag. The tissue is cut in the required size and shape after dyeing and the blue chakra (wheel) is printed on the white cloth with 24 equally spaced spokes. The three pieces are finally stitched together to form the Indian flag.Approximately 60 Japanese sewing machines are used during stitching to maintain the precision. Some of the critical confirmation criteria include that the width and length of the whole flag should be in the 3:2 ratio, and that the chakra should be printed on both sides of the flag perfectly matched with both of these prints, like two hands joined palm to palm. Each lot shipped is subject to BIS inspection and any problem with a single flag could result in rejection of the whole lot. The flags are produced in nine sizes, the smallest being 6 x 4 inches (150 x 100 mm) and the largest is 21 x 14 feet (6300 x 4200 mm).
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