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This paper examines the commercial viability of Parmelia usnea in small-scale dyeing units of Garhwal Himalayas and the traditional craft of the region. Physicochemical analysis of the plant was carried out in order to standardise the extraction method. The parameters studied were colour, physical appearance, pH, moisture, ash, acid-insoluble ash and water-soluble extractive value. Extraction and application of the dye were carried out and its conditions on wool were standardised by studying the effects of time, pH and temperature on extraction and also the effects of shades on exhaustion of the dye by a substrate.