By "??500", do you mean 500 pounds, dollars, what? In any case, you could buy curtains for a 20-room mansion and still have money left over pretty much anyplace in India, including Goa.
Sorry, I don't know of any specific shops or places to look for soft furnishings and upholstery fabric, but there most definitely should be some, though probably not in your average tourist shop or tailor's. I would ask at your hotel and also check out cities like Panjim. You shouldn't have a problem finding a tailor to do the stitching. Just make sure you bring all the proper measurments.