Textile Ministry Cuts Hank Yarn Obligation for Mills from 30% to 20%

Revised notification lowers mandatory hank yarn supply for textile mills from the September quarter of 2026, with carry-forward provision for unfulfilled obligations.

The Ministry of Textiles, through a notification dated June 15, has reduced the hank yarn obligation for textile mills to 20% from 30%.

Hank yarn obligation refers to the mandatory quantity of yarn produced for the domestic market that textile spinning mills must package in hank form and supply to the handloom sector.

The previous revision to the obligation was made in 2019, when the requirement was reduced from 40% to 30%.

Beginning with the September quarter of 2026, textile mills will be required to package only 20% of the yarn produced for the domestic market in hank form. Mills must also continue filing quarterly returns with the office of the Textile Commissioner.

Under the revised notification, if the obligation fulfilled is less than 15%, mills will be permitted to carry forward the remaining obligation.

An industry official said, “This is one of the long-pending demands of the textile mills as the consumption of yarn by the handloom sector has reduced over the years.”

The report noted that the handloom sector currently faces challenges including labour shortages and stringent pollution control norms. It also stated that dyeing yarn in hank form requires significant water usage, leading to pollution-related concerns.

According to the report, if the handloom weaving sector adopts modern processing techniques, the requirement for yarn in hank form may reduce.

The report further noted that increased demand for handwoven products could stimulate demand in the yarn market.