This research paper aims to provide an in-depth analysis of the anatomy and challenges faced by Micro, Small, and Medium Enterprises (MSMEs) in the handloom industry in Purba Medinipur district, West Bengal, India. The handloom industry plays a crucial role in the socio-economic development of the region, contributing to employment generation, rural livelihoods, and cultural preservation. However, despite its significance, the sector encounters numerous challenges that hinder its growth and sustainability. To achieve the objectives of this study, a mixed-methods research approach was adopted. Primary data was collected through surveys, interviews, and focus group discussions with various stakeholders, including handloom weavers, artisans, MSME owners, government officials, and industry experts. Secondary data was sourced from relevant literature, reports, and official records. The research findings shed light on the anatomization of the MSME handloom industry, providing an overview of its organizational structure, production processes, supply chains, market dynamics, and value chains. The study examines the social, economic, and cultural dimensions of the industry, emphasizing the significance of the handloom sector in the local context. Moreover, the research highlights the challenges faced by MSMEs in the handloom industry in Purba Medinipur district. These challenges encompass various aspects, such as limited access to finance, inadequate infrastructure, lack of modern technology adoption, skill gaps, fluctuating market demand, and competition from cheaper mass-produced textiles. The study also explores the impact of government policies and initiatives on the industry and identifies gaps in support mechanisms. Based on the analysis, the research offers recommendations and policy implications to address the challenges and promote the growth and sustainability of MSMEs in the handloom industry. These recommendations include enhancing financial inclusion, improving infrastructure facilities, facilitating skill development and technological up-gradation, fostering market linkages, and strengthening support systems provided by the government and other stakeholders.