Yarn spreads strengthen as export competitiveness returns

The textile spinning sector is entering a phase of renewed profit, with industry data signaling a recovery in yarn spreads. Following the stabilization of trade dynamics and normalization of US tariffs on Indian textile goods in early 2026, cotton yarn spreads have rebounded to approximately Rs 120-125 per kg, an improvement from the Rs 95-100 range seen earlier in the fiscal year. This recovery is underpinned by the restored parity between domestic and international cotton prices, which has effectively bolstered India’s global market standing.

The rationalization of supply-side capacity, combined with easing trade uncertainties, has created a more sustainable pricing environment, notes a market analyst. Industry figures corroborate this momentum, with total textile exports, including handicrafts, rising 2.1 per cent to Rs 3.16 lakh crore in FY 2025-26. Strong demand from markets like the UAE, Germany, and Japan has provided a crucial buffer as the sector shifts its focus toward value-added products. By utilizing this cost competitiveness and the recent progress in major Free Trade Agreements, domestic spinners are strategically positioning themselves to capture higher margins in the global apparel and home textile supply chains throughout the coming year.

The industry is a comprehensive value chain, from raw fiber to finished apparel, serving as a pillar for rural employment. It focuses on cotton yarn, synthetic fabrics, and technical textiles. Strategic growth is driven by modernizing industrial clusters and pursuing global trade agreements to boost high-value exports.