Posted on September 14 , 2025
~Chandan Munjal
Munjal International – Spinning into the Future
Panipat has long been at the heart of India’s textile recycling + yarn market. As we move deeper into Q3‑2025, multiple forces are shaping what lies ahead—raw material costs, tariff policies, domestic demand (especially handloom), and of course the upcoming festivals. Here’s what we’re seeing, what to expect, and how Munjal International is positioning itself.
1. State of the Yarn Market in Panipat & Beyond
- Demand remains mixed. Recycled yarn mills in Panipat are feeling weaker demand especially for handloom and home furnishing segments (curtains, floor‑mats, blankets etc.). As reported, output of recycled yarn dropped by ~50% in certain periods, with prices falling around 20%. NewsClick+2KNN India+2
- Cotton yarn / comber yarns have been under cost pressure. Rising cotton prices make comber yarn more expensive; meanwhile downstream users are cautious in taking large inventory because demand seems subdued. Apparel Views+2The Times of India+2
- Recycled yarn stability in some counts. In certain recycled yarn quality/counts (lower counts used for coarser fabric, mats, etc.), the price and supply are more stable—thanks to steady supply of waste cloth/rags, and Panipat’s strong recycling ecosystem. Munjal International+2The Tribune+2
2. Cotton Waste & Cloth (HSN Code 6310) Trends
- Panipat as global recycling hub. Discarded cloth (both domestic and imported) is a key raw material in Panipat. Thousands of tonnes of ‘waste cloth’ are processed daily. The Tribune+2The Tribune+2
- HSN 6310 refers to “worn clothing and other worn articles; rags,” etc. This category is critical because many of Panipat’s recycling mills depend on cloth/rags under this category for raw material. Any change in import rules, customs, or tariffs related to 6310 has direct effect on input cost and availability.
- Import of waste cloth / rags — regulations, cost, and quality. There are sometimes duty, inspection, delays associated with imported rags/waste cloth. The cost of import + transport + quality sorting matters a lot. Also, restrictions or bans in source countries or mid‑maritime transit can affect supply.
3. Tariff Effects & Policy Changes
- Duty‑free cotton import extension: The Indian government recently extended the exemption on import duties (Basic Customs Duty, Agriculture Infrastructure & Development Cess, Social Welfare Surcharge) on raw cotton (HS 5201) until end‑December 2025. This is intended to reduce input costs for yarn / fabric exporters. The Times of India+1
- US tariff on Indian textiles: From around August 2025, the US imposed a 50% tariff on a number of Indian textile exports. This has hurt profitability and order inflow for home textiles etc. It also increases the importance of exploring alternate export markets. The Times of India
- MIP / BCD / import duties on synthetic/synthetic blended fabrics: The government has taken steps to impose or maintain minimum import price (MIP) or Basic Customs Duty (BCD) on many synthetic knitted fabrics under certain HS codes, to protect domestic manufacturers. In-Cai+1
- GST changes: Some reductions in GST rates (especially for MMF / man‑made fibre chains) are coming into effect, which help reduce landed cost in value chains involving synthetic yarns / fabrics. This will aid demand in certain segments for textiles and home‑textile goods. Easitex
4. Local Effects in Panipat & Handloom Sector
- Many small handloom units and cottage weavers depend on recycled yarn and waste cloth stock. Price volatility in waste cloth or recycled yarn directly affects their margins.
- Because export demand is lower, many units are running partial capacity or even single shift. Inventories of finished goods (blankets, mats, etc.) are building up waiting for demand. KNN India+1
- Environmental & regulatory pressures are also rising: bleaching/dyeing/pollution control, especially units using waste cloth / rags etc., are under scrutiny. Units violating effluent treatment or other norms are getting notices. This adds compliance cost. Textile Trade Buddy+1
5. Festivities Ahead & What We Expect
India’s festive season (Navratri, Diwali, weddings etc.) is approaching. Historically, this brings a surge in demand for garments, home textiles (bedsheets, curtains, decorative fabrics), and also for ethnic wear.
What this likely means for Panipat and Munjal International:
| Segment | Expected Demand Change | Key Challenges | Opportunity Points |
|---|---|---|---|
| Recycled yarn / waste‑cloth based home furnishings | Moderate increase — customers may place smaller, more frequent orders | Price sensitivities, supply delays of quality waste cloth, competition with new fabrics | Ability to offer cost‑effective recycled products; emphasize eco‑credentials; improving supply chain reliability |
| Cotton/comber yarns / higher‑end fabrics | Demand may pick from premium buyers | High raw cotton cost; tariffs / import duty on cotton or inputs; longer lead times | Use of duty‑free cotton import extension; hedging cotton procurement; exploring export orders outside US due to tariffs |
| Handloom / local weaving units | Possibly modest boost, especially for ethnic and traditional fabric demand | Skilled labour scarcity; cost of yarn + dye; cashflow constraints | Offer flexible payment, smaller lots; collaborating with local weaver associations to ensure supply of suitable yarn |
| Export orders | Mixed: US market under pressure; other markets (Middle East, EU, maybe Africa) may absorb some orders | Tariff barriers, regulatory compliance (environmental, quality) | Target non‑US markets; highlight sustainability; adjust product lines to match buyer preferences (e.g. blends, recycled, eco) |
6. Expectations & What We Should Do
- Price movements: Yarn prices likely to inch up, especially for cotton comber counts, as cotton cost remains high and duty extensions are temporary. Recycled yarn prices may be volatile depending on raw waste cloth supply and quality.
- Supply chain tightening: Quality waste cloth (HSN 6310) supply might face delays or cost hike due to import delays, policy changes in source countries / shipping cost. Mills that maintain good relationships with rag importers or local collectors will be better placed.
- Export re‑orientation: With US tariffs, many exporters will try to shift focus to countries with lower trade barriers, or work on improving product value so higher price can be sustained. Domestic market will become more important.
- Focus on sustainability & regulatory compliance: Units with better environmental practices, cleaner processes, efficient waste handling will have an edge. Rainy season / monsoon issues must be managed (transport, drying of recycled fibre etc.).
7. Munjal International’s Position
At Munjal International, we’re keenly observing these developments. Some of our strategic moves:
- Maintaining buffer stocks of cotton waste and waste cloth (HSN 6310) through trusted sources to avoid supply shocks.
- Optimising production for multiple yarn counts—both coarser recycled yarns for home textiles / furnishing, and finer cotton yarns/comber yarns as demand picks up.
- Exploring export markets beyond the US, and developing value‑added recycled yarn (e.g. coloured recycled, blended, eco‑certified) to meet growing global demand.
- Ensuring compliance with environmental norms, and pushing for cleaner processes in spinning, bleaching, dyeing etc.
- Planning for festival season demand by aligning production schedules, ensuring quality control, and flexible order packaging.
Conclusion
The textile and yarn landscape in Panipat and India generally is at a crossroads. High raw material costs, tariff headwinds, and import‑export pressures are balancing against strong opportunities from the recycling ecosystem, rising sustainability focus, and the festive demand surge. For spinning mills like Munjal International, success will come from agility, close supply chain control (especially of cotton waste / waste cloth under HSN 6310), and listening to both domestic and international buyer signals.
