The article mentions that commercial napkins sold for 4 rupees despite cotton being 1/4000th the cost, but also says farther down that the locally produced ones sell for an average of 2.5 rupees each. That's a 38% discount: significant, but it doesn't seem like a game-changing difference to me. I imagine that if this catches on, the larger manufacturers will likely just cut their margins to compete.
On a more general note, one of the big reasons for the Industrial Revolution's switch to mass-production was that making goods in huge factories is more efficient, and ultimately cheaper, than producing them locally in small quantities. Economies of scale are powerful.
On a more general note, one of the big reasons for the Industrial Revolution's switch to mass-production was that making goods in huge factories is more efficient, and ultimately cheaper, than producing them locally in small quantities. Economies of scale are powerful.