CITI Hails Reduction in Hank Yarn Obligation from 40% to 30% as Historical
New Delhi, Friday, 08 March 2019: Chairman CITI, Shri Sanjay Kumar Jain welcomes the Government’s decision to reduce the Hank Yarn Obligation (HYO) from 40% to 30% of the total weaving yarn produced for domestic consumption. This step would remove the anomaly of excessive obligation of hank yarn and save the ailing spinning industry from the extra burden. He stated that this is an historical step, as the industry was facing this extra burden for more than a decade now. He specifically thanked the Hon’ble Union Minister of Textiles, Smt. Zubin Irani for this historic announcement.
Mr. Jain stated that HYO provision had compelled the textile mills to produce a minimum of 40% of the Weaving Yarn for domestic consumption as Hank Yarn, which was inhibiting the growth of the industry. The actual cotton hank yarn requirement by the handloom sector is less than 15% of the total as per the estimate based on the Handloom Census 2009-10 data. It is estimated that now the requirement for hank yarn would have fallen to about mere 10% of the total weaving yarn produced for domestic consumption. Mills were under severe stress to meet this obligation as there was not sufficient demand for hank yarn in the country.
Chairman-CITI further stated that he is very thankful to the Government for considering the long standing demand of the industry. This will help the spinners bring down the cost and improve their competitiveness, thereby enabling Ease of Doing Business for the entire cotton textile industry. Lasttime, this obligation was reduced was in 2003 from 50% to 40% and the industry had to wait for about 15 years for the next round of reduction despite actual requirement percentage reducing every year.