The handicraft industry of Ladakh is where culture, economy and environment meet. Despite the potential, the sector faces many challenges - limited market access, outdated production methods and fluctuating demand. Key elements like supply chain and logistics, awareness of government policies, environmental practices, contingency planning, training opportunities, lean management, online presence, marketing, product visibility, social innovation and supplier networks are identified through literature review and stakeholder interviews. Interpretive Structural Modelling (ISM) is used to examine the contextual relationships among key success factors for the handicraft industry in Ladakh. The findings of the analysis demonstrate that supply chain and logistics, awareness of government policies, environmental practices, contingency planning, and social innovation emerged as the independent variables, while lean management, handicraft product visibility, and supplier network act as dependent variables. The key success factors, such as training opportunities, online presence, and marketing, act as the linkage variables between independent and dependent variables. Supply chain and online presence are key to market and product visibility. Social innovation and contingency planning can drive resilience and adaptability in economic and environmental changes. The findings of the study suggest that the Government should collaborate with local institutions to conduct regular training workshops for artisans. These workshops should focus on skill enhancement, marketing strategies and sustainable production techniques. This research provides practical tips to harness these success factors to turn the handicraft industry into a sustainable and competitive sector without losing its cultural heritage.