Through a notification, the Indian Textiles Ministry has reduced the mandatory supply of hank yarn by spinning mills to the handloom sector from 30% to 20% starting July-September 2026.
As per the notification, from the third fiscal quarter, mills must file quarterly returns to the Textile Commissioner with a 15% threshold for carry-forward.
This notification takes into account the declining yarn consumption in the handloom sector and aims to reduce compliance burden on mills while addressing the sector’s structural challenges.
Reduction addresses falling handloom demand and challenges like labour shortage and high-pollution traditional dyeing. This obligation was previously revised from 40% to 30% in 2019.
The hank yarn obligation is a policy instrument designed to protect the handloom sector by ensuring a steady supply of yarn and mandates spinning mills to produce yarn in hank form for the handloom sector.
The reduction to 20% acknowledges structural decline in the handloom industry, thereby reducing compliance costs and inventory burdens for textile mills.
Image courtesy: Taxscan
