Indian Texpreneurs Federation (ITF), a Coimbatore-based premier association for textiles, has urged the centre to remove the hank yarn obligation, which compels yarn manufacturers to produce 40 per cent of their total yarn as hank yarn for the benefit of the handloom sector.

In a letter to Prime Minister Narendra Modi, ITF said there is an excess of hank yarn in the country with comparatively lesser consumption.

The hank yarn obligation was originally imposed on yarn manufacturers in a notification issued in 2003 under the Essential Commodities Act, 1955 to ensure a steady supply of hank yarn, a basic raw material in handloom weaving, to the handloom sector at reasonable rates.

Most of the handloom weavers have now moved on to powerlooms or automatic looms, which has reduced the demand for hank yarns, according to ITF secretary D Prabhu. “There is hardly any demand for hank yarn due to Textile Upgradation Scheme and other initiatives of the government,” he said.

Tamil Nadu produces 3.05 crore kg of hank yarn per month, as against the requirement of 16 lakh kg, which results in excess production of 1,880 per cent which is 18 times more than the requirement.

In such a scenario, ITF is insisting on the removal of hank yarn obligation altogether or to reduce the slab of 40 per cent to 10 per cent.

In the letter, ITF said there was an urgent need for textile-focused Free Trade Agreements (FTAs) with existing and emerging markets. It also urged the government to accommodate textiles in the lower slab of taxation in the proposed Goods and Service Tax (GST), which has the potential to transform and boost the Indian economy.