The Ministry of Textiles has reduced the mandatory hank yarn packing obligation for textile spinning mills to 20% from 30%, according to a notification issued on June 15.
Hank yarn obligation refers to the quantity of yarn meant for the domestic market that spinning mills are required to pack in hank form for supply to the handloom sector. The latest revision marks the first change since 2019, when the obligation was lowered from 40% to 30%.
Under the revised norms, spinning mills will be required to pack only 20% of the yarn produced for the domestic market in hank form from the July–September quarter of 2026 onwards. Mills will also continue to file quarterly returns with the office of the Textile Commissioner. The notification provides that mills fulfilling less than 15% of the obligation can carry forward the shortfall.
Industry stakeholders have welcomed the move, describing it as a long-standing demand of spinning mills. According to an industry official, the reduction reflects the declining consumption of hank yarn by the handloom sector over the years.
The official further noted that the handloom industry is currently grappling with challenges such as labour shortages and increasingly stringent pollution control requirements. Dyeing yarn in hank form typically requires larger quantities of water and generates environmental concerns, making the process more resource-intensive.
The industry also believes that wider adoption of modern processing techniques within the handloom sector could reduce the need for yarn to be supplied in hank form. Stakeholders maintain that demand for handwoven products will continue to drive demand for yarn, regardless of the reduction in the mandatory packing obligation.
The move is expected to provide greater operational flexibility to spinning mills while aligning production requirements with current market demand patterns in the handloom segment.
Bharat Tex Special Report 2026 
