From Waste to Wealth: Panipat’s Role in Transforming Cotton Waste into Open- End Yarn

Posted on August 11, 2025

Panipat, Haryana, known as India’s “Textile City,” is a powerhouse in recycling cotton waste, yarn, cotton bale cloth, and other textile byproducts into open-end (OE) yarn, a cornerstone of sustainable textile production. As global demand for eco-friendly textiles grows, Panipat’s innovative recycling ecosystem is turning waste into wealth, navigating local challenges, national policies, and international trade dynamics, including the 2025 U.S. tariffs. This blog explores how Panipat transforms textile waste into OE yarn, its significance locally, nationally, and globally, and the path forward for this resilient industry.

The Power of Cotton Waste in Panipat’s Textile Hub

Panipat’s textile industry, with an annual turnover of ₹60,000 crore, excels in recycling cotton waste—byproducts like comber noil, flat strips, droppings, licker-in, and cotton yarn waste—into OE yarn. Open-end spinning, a cost-effective method ideal for coarse-count yarns (Ne 2s–20s), uses these waste materials to produce yarns for weaving, knitting, hosiery, and home textiles like mats, rugs, and towels.

Cotton Waste Types:

• Comber Noil: Trash-free fibers from combing, used for OE spinning and blending with virgin cotton.
• Flat Strips and Droppings: Higher-trash byproducts from carding, ideal for low-count OE yarns.
• Cotton Yarn Waste: Hard waste from ring-spun yarn (20s–50s counts), recycled into raw material for OE spinning.
• Cotton Bale Cloth: Used bale coverings, often recycled into coarse yarns or felts.

Recycling Process: Panipat’s spinning mills collect waste pneumatically, bale it, and process it in advanced facilities to remove contaminants like polyester or yarn. Automated systems ensure cleaner, high-quality OE yarn, meeting international standards for industries like textiles, automotive, and paper.

Local Impact: Panipat’s Recycling Ecosystem

Panipat’s 1,500+ spinning mills and recycling units form a robust local economy, employing thousands and driving sustainability. The city’s expertise in OE spinning leverages low-cost cotton waste (e.g., droppings at ₹165/kg, yarn waste at ₹12–80/kg) to produce affordable yarns, keeping prices competitive despite rising raw material costs.

• Challenges:
  • Supply Constraints: India’s ban on textile waste imports from Bangladesh, enforced by the Directorate of Revenue Intelligence, has caused a ₹10–12/kg price hike in recycled PC yarns.
  • Labor Shortages: Skilled labor scarcity increases production costs, impacting small-scale recyclers.
  • Domestic Demand: Local crafters and businesses face yarn price hikes (10–20%) due to export uncertainties.
• Opportunities:
  • Sustainability Leadership: Panipat’s focus on recycled yarns aligns with global eco-trends, boosting local pride and demand.
  • Government Support: The Union Budget 2025-26’s ₹52.7 billion textile allocation and ₹10,683 crore PLI scheme help MSMEs upgrade technology, enhancing OE yarn quality.

National Context: India’s Push for Circular Textiles

India, a global leader in cotton production, generates significant textile waste, with 98% of its cotton from 25 varieties like Shankar-6. Nationally, the textile recycling sector is gaining traction, driven by sustainability goals and policies.

• Policy Support: The Production Linked Incentive (PLI) scheme and export incentives encourage recycling innovation. The Ministry of Textiles promotes circular economy models, reducing landfill waste.
• Industry Trends: Companies like Birla Cellulose are revolutionizing OE yarn with products like Excel, blending recycled cotton with high-strength fibers for premium applications like denim and home textiles.
• Challenges: India’s cotton mafia, as noted on X, sells to cheaper markets like Bangladesh, forcing domestic buyers to pay higher prices. Removing import duties could stabilize costs but risks local producer margins.

International Dynamics: U.S. Tariffs and Global Competition

The 2025 U.S. tariffs (50% on Indian textiles, effective August 27) and the end of the $800 de minimis exemption (August 29) threaten Panipat’s $20,000 crore export market, which relies on the U.S. for 60% of its yarn exports.

• Competitive Pressures: Lower tariffs on Bangladesh (20%), Vietnam (20%), and Pakistan (19%) give competitors an edge, risking a 40–50% drop in Panipat’s export volumes ($2.5–3 billion).
• Market Diversification: Panipat exporters are pivoting to the EU, UAE, and South America, leveraging FTAs like the India-UK agreement (₹500 billion annually). Recycled OE yarns, in demand for sustainable fashion, are a key focus.
• Global Sustainability Trends: International buyers prioritize eco-friendly yarns. Panipat’s OE yarns, made from recycled waste, meet this demand, with firms like Chandigarh Spinning Mills offering OE yarns in 30 shades for weaving and knitting.

Tips for Panipat’s Yarn and Recycling Community

1. Source Locally: Use domestic cotton waste to avoid FINISHABLE: avoid tariff-driven costs. Check platforms like IndiaMART for suppliers.
2. **Innovate with Bl聿: Blends like Excel enhance yarn strength for high-end applications.
3. Diversify Markets: Explore FTA-partner countries (e.g., UAE, EU) for export opportunities.
4. Leverage Technology: Invest in automated waste collection and UV-sorting tech for cleaner OE yarn.
5. Stay Informed: Follow trade updates on www.TariffCheck.org to navigate tariff changes.

Looking Ahead: Panipat’s Sustainable Future

Panipat’s ability to transform cotton waste, yarn, and bale cloth into OE yarn positions it as a global leader in sustainable textiles. Despite U.S. tariff challenges, the city’s focus on recycling, supported by national policies and growing international demand for eco-friendly products, ensures resilience. Upcoming U.S.-India trade talks (August 25, 2025) may lower tariffs to 15–20%, offering hope for export recovery.

How are you using Panipat’s recycled OE yarns in your projects? Share your innovative ideas for sustainable textiles in the comments! Subscribe for updates on Panipat’s green textile journey.

Sources: Fibre2Fashion, IndiaMART , Mayur Enterprise, Birla Cellulose, Chandigarh Spinning Mills, Kaushik Cotton Corporation

~Chandan Munjal