An advisory body constituted under the Ministry of Textiles, the All India Handloom Board advised government bodies on policy recommendations for the handloom sector to reduce unemployment and preserve the handloom and crafts of the country. The board was distinguished for involving members from the handloom industry, making it one of the only bodies that let stakeholders of the industry provide direct feedback to the government.

The need for establishing organisations to aid the handloom and cottage industries in India was first noted by the Royal Commission of Agriculture in 1928, which resulted in a Fact Finding Committee being instituted by the colonial government of India in 1941. An All India Handloom Board was established in 1945 and was functional till 1947, with its primary duties being the procurement of raw materials, marketing of goods and the administration of financial aid. Following the independence of India, the government set up a Cottage Industries Board in 1948 with a Standing Committee to address the grievances of handloom weavers. In 1952, a single body called the All India Handicrafts and Handlooms Board was set up by Pupul Jayakar under the aegis of Kamaladevi Chattopadhyay. The subsequent year, in 1953, the body split into separate handicrafts and handlooms divisions, with Jayakar serving as the chairperson of the Handlooms Board.

In the 1980s, the board was reconstituted under then-Minister of Textiles Sharad Yadav and included members from central and state governments as well as members of the handlooms industry. Subsequently, the board was granted the responsibility of promoting, developing and marketing handlooms and crafts, as well as coordinating these efforts across government agencies. In 1992, the board was developed with eighteen government members and eighty-eight members from the handloom industry, including weavers and artisans.

The board organised fairs and exhibitions to showcase the work of weavers. Between 2012-17, the board instituted the National Handloom Development Programme (NHDP), which provided support and financial aid for the formal education of weavers and their children. The Handloom Marketing Assistance was also constituted under the NHDP scheme, which allowed weavers to sell their products directly to consumers and provided financial assistance to organise marketing events in the domestic and international space. Other initiatives included the Yarn Supply Scheme, which was set up under the National Handloom Development Corporation (NHDC) in 2016 to provide subsidies to weavers and establish warehouses in areas with a rich handloom weaving tradition.

The board also undertook a number of development and welfare schemes, such as the Handloom Weavers Comprehensive Welfare Scheme in 2018, wherein weavers and workers between the ages of eighteen and fifty were entitled to lifetime welfare coverage and insurance, as well as an annual scholarship for two children of the weavers, under the Pradhan Mantri Jeevan Jyoti Bima Yojana and the Pradhan Mantri Suraksha Bima Yojana.

The board was last reconstituted in 2016, with Ritu Kumar as its chairperson. After its term expired in 2018, the board stopped meeting regularly and was officially dissolved by the government on 27 July 2020.