India’s yarn industry navigates challenges to chart a positive future.

The textile industry has long been a cornerstone of India's economy. But the threads of the yarn industry, the vital foundation of this sector, are facing numerous challenges. Rising cotton prices, global competition, and a sluggish domestic market threaten to unravel the industry's progress. Yet, amidst these concerns, innovation, and resilience weave positivity about the future.

Issues facing the industry.

Cotton crunch: Global cotton prices have grown almost 40 per cent since 2020, squeezing profit margins for Indian yarn manufacturers who rely heavily on the natural fiber. As per Textile Export Promotion Council (TEPC) stats, India's cotton imports jumped from 2.5 million tons in 2019 to 3.2 million tons in 2023, further highlighting the growing import dependence.

Growing competition: Countries like Vietnam and Bangladesh, with 20 per cent lower production costs and government subsidies, have emerged as formidable competitors. India's yarn exports, which stood at $5 billion in 2019, have dipped by 10 per cent in the past two years, reveal CITI reports.

Falling domestic demand: Weakening consumer sentiment and rising inflation have dampened domestic demand for textiles, leading to yarn inventory pile-ups. McKinsey & Company reports estimate a 15 per cent drop in domestic textile consumption since 2019, impacting yarn demand significantly.

Positive strategies the way forward

But the Indian yarn industry is not giving up just yet, as it’s drawing new strategic in response to move ahead.

Embracing innovation: Leading mills are investing in automation, AI-powered quality control, and advanced spinning technologies. Reliance Industries' ‘Haathi’ platform connecting yarn manufacturers directly with garment makers is a prime example.

Sustainable solutions: Sustainability is the buzz word in the industry today. Companies like UCO Textiles are focusing on organic cotton, recycled polyester, and eco-friendly dyes to cater to growing consumer demand and address environmental concerns.

Forging collaborations: Stakeholders from the industry have joined hands with the government to come up with initiatives like: skills development program, technology upgradation schemes and improved market access. The recent launch of the National Technical Textiles Mission is a promising step in this direction.

The near-term outlook for the Indian yarn industry remains cautious. Experts predict a gradual recovery within the next two years, driven by factors like increasing domestic consumption, government support, and the industry's focus on innovation and sustainability.

As Arun Jain, a veteran textile analyst explains, "Indian yarn industry has faced challenges before, and we've always emerged stronger. The road ahead may be bumpy, but with the right blend of resilience, innovation, and collaboration, the future of Indian yarn is brighter than the threads we weave."