Yarn & Fiber Exports from India: Cotton, Silk & Technical Threads

Panipat processes over 100,000 tonnes of discarded wool and cotton every month. Old sweaters, worn-out coats, and cast-off clothing from Europe and the US arrive by the truckload, get shredded, respun, and shipped back out as shoddy yarn and recycled thread. Some of it ends up as army blankets. Some of it, reprocessed further, ends up in $50 hoodies sold in European stores. The city that was once mocked as the "cast-off capital of the world" is now doing something almost no other textile cluster on earth can do at this scale: turning waste into an export line.

That is the kind of detail most yarn export guides skip entirely, because most of them are written from a spreadsheet, not from an understanding of how India's yarn industry actually breaks down by fiber and by city. This guide goes cluster by cluster: cotton out of Gujarat and Coimbatore, silk out of Karnataka, wool and knitting yarn out of Ludhiana, synthetic and technical yarn out of Surat, and recycled yarn out of Panipat. Each one runs on a different supply chain, sells to different buyers, and carries different compliance requirements.

This guide covers yarn, thread, and fiber, the upstream inputs under HS Chapters 50 through 55. Finished fabric and made-up textile products are a separate export category with their own buyers and compliance profile.

The Numbers

Sources: TEXPROCIL, IBEF Cotton Industry Report, IBEF Indian Silk Industry Report, Ministry of Textiles PLI Scheme data, IMARC Indian Textile Market Report.

The spinning capacity number is worth sitting with for a second. Fifty million spindles is not a small industry finding its feet. It is the second-largest spinning base on the planet, built up over decades, and it is why Indian yarn shows up reliably in mills from Bangladesh to Vietnam to Turkey regardless of what is happening with cotton prices in any given quarter.

The Product Categories

Cotton Yarn

India's largest yarn export category and the one with the deepest buyer relationships. Cotton yarn exports run through 250 different exporting districts, though a handful of them dominate the value. Gujarat is the top exporting state, with Punjab a close second. Bangladesh alone imported $535 million worth of Indian cotton yarn in just the first four months of FY26, with Egypt and China trailing well behind at $86 million and $55 million respectively.

Indian cotton yarn covers an unusually wide range: greige, bleached, mercerized, gassed, dyed, combed, carded, compact, and melange, spun anywhere from a coarse 2 count to a fine 200 count. That range is a real competitive edge. A mill in India can usually match a buyer's exact specification without the buyer having to compromise on count or finish.

Silk Yarn

India is the world's second-largest silk producer, behind only China, and the only country that commercially produces all four natural silk types: Mulberry, Eri, Tasar, and Muga. Karnataka alone accounts for roughly a third of national production, with sericulture also concentrated in Andhra Pradesh, Tamil Nadu, West Bengal, and Jammu and Kashmir. Production has been volatile lately. FY24 hit 38,913 metric tonnes, then FY25 climbed to 41,121 tonnes, even as pest pressure on mulberry crops has pushed some farmers in traditional cocoon-growing districts like Ramanagara and Sidlaghatta out of the trade. Silk yarn buyers sourcing from India should expect some year-to-year supply variation tied directly to that agricultural volatility, not just currency or demand swings.

Wool Yarn

Ludhiana is India's wool and knitwear capital, and its yarn output splits two ways: virgin wool and acrylic yarn feeding the city's own knitwear export industry, and a large recycling operation processing wool waste into lower-grade wool yarn for blankets and coarse knitwear. Ludhiana's strength is fashion-facing wool and acrylic yarn. For the recycled and shoddy end of wool yarn, Panipat has effectively taken over as the dominant hub, described further below.

Synthetic Yarn

Surat is the country's synthetic yarn engine, processing an estimated 75% of India's total polyester yarn output. This is not a boutique category. It is the backbone of India's fast-growing man-made fiber (MMF) sector, feeding fashion, sportswear, and home textile manufacturers both domestically and for export. Synthetic yarn demand has been growing faster than cotton yarn demand in recent years, and government policy has followed that shift rather than lagging behind it.

Blended Yarn

Cotton-polyester and cotton-viscose blends sit in a real gray zone for classification. The 85% threshold determines everything: a blend with 85% or more cotton by weight classifies under Chapter 52 with the pure cotton yarns, while anything below that threshold shifts into Chapter 55 with the synthetics. Getting this wrong on a shipping bill causes real delays. Blended yarn buyers should always confirm the exact fiber percentage with their supplier before finalizing an HS code, not after.

Recycled Yarn and Threads

This is the category most competitor guides ignore entirely, and it is one of India's more distinctive export lines for exactly that reason. Panipat runs the country's largest circular textile economy, recycling discarded wool and cotton garments, largely imported as rags from Europe and North America, into open-end spun yarn and shoddy wool yarn. Around 400 industrial units in Panipat recycle roughly 8 lakh kg of rag daily. The open-end spinning side alone generates about Rs 4,000 crore a year in turnover, while the shoddy wool side adds another Rs 2,000 crore. Ludhiana and Surat also run smaller-scale recycled yarn and thread operations, but Panipat is the center of gravity.

Buyers looking for GRS-certified recycled content, increasingly a real requirement from European sustainability-conscious apparel brands, should be looking specifically at this cluster.

Embroidery Threads and Sewing Threads

Smaller in export value than yarn but essential to garment manufacturing supply chains. Embroidery threads support India's large embroidered textile and handicraft export base, particularly out of Lucknow and Varanasi. Sewing threads are a steadier, higher-volume commodity category tied directly to garment export volumes, since every garment shipment needs matching thread supply.

Knitting Yarn

Feeds directly into India's substantial knitwear export industry, most of it produced or finished around Ludhiana and Tiruppur. Knitting yarn buyers are frequently the same buyers sourcing finished knitwear, since many exporters offer both raw yarn and finished garment options from the same supply base.

Textile Fiber

The raw input stage before spinning: raw cotton, silk cocoons, wool fiber, and man-made staple fiber. Textile fiber exports run under a different HS chapter than spun yarn (raw cotton sits under 5201, ahead of the yarn headings in 5205 and 5206) and face stricter phytosanitary requirements, since raw fiber shipments carry pest and contamination risk that processed yarn does not.

The Manufacturing Clusters

Gujarat: Cotton Yarn's Largest Exporting State

Gujarat leads India in both raw cotton fiber exports and cotton yarn exports. Its scale comes from proximity to some of India's best cotton-growing regions combined with a mature spinning industry built up over decades.

Punjab: The Second Cotton Yarn Hub

Punjab ranks second nationally in cotton yarn exports, anchored heavily around Ludhiana's broader textile ecosystem even though Ludhiana itself is better known for wool and knitwear.

Surat, Gujarat: The Synthetic and Technical Yarn Capital

Surat processes roughly 75% of India's polyester yarn and weaves around 30 million meters of synthetic fabric daily. It is also where much of India's PLI-backed investment in man-made fiber and technical textiles is concentrated, since the raw synthetic yarn supply chain already exists locally at scale. Surat's effluent treatment compliance lags behind clusters like Tiruppur, sitting at around 58% zero liquid discharge adoption against Tiruppur's 92%, which is worth knowing if a buyer's sustainability audit checks wastewater handling specifically.

Ludhiana, Punjab: Wool, Acrylic, and Knitwear Yarn

Ludhiana anchors India's wool and knitwear yarn production, feeding both its own large knitwear export industry and buyers sourcing raw wool and acrylic yarn directly. It also runs a smaller wool and synthetic recycling operation alongside its primary virgin yarn output.

Panipat, Haryana: The Recycled Yarn and Circular Economy Hub

Panipat deserves more attention than it usually gets in export guides. Beyond its 100,000-tonnes-a-month recycling operation, the city produces roughly 75% of India's hand-tufted carpets and high-end durries and supplies over 90% of the blankets used by Indian Railways and the armed forces. Its hosiery sector has also carved out a specific niche in functional hosiery, industrial socks, thermal wear, and protective garments, running alongside Ludhiana's fashion-focused knitwear rather than competing head-on with it.

Karnataka: India's Silk Center

Karnataka accounts for roughly a third of India's raw silk production, concentrated in cocoon markets around Ramanagara and Sidlaghatta, with reeling, twisting, and yarn production feeding both domestic saree weaving and export-oriented silk yarn buyers.

Ichalkaranji and Bhilwara: Blended and Synthetic Fabric Feeders

Smaller but established clusters supplying blended and synthetic yarn into the broader fabric and made-up manufacturing chain, often working in tandem with the larger Surat and Gujarat cotton bases.

Who Buys Indian Yarn and Fiber

Bangladesh

The single largest buyer of Indian cotton yarn, importing $535 million worth in just the first four months of FY26. Bangladesh's enormous garment export industry depends on imported yarn, and India's proximity and pricing make it a natural primary supplier.

China

A major buyer of Indian cotton yarn, though demand has fluctuated over the years depending on the price gap between Indian and Chinese domestic cotton.

Egypt

A steady mid-size buyer, importing $86 million in the same FY26 window, generally sourcing yarn to feed its own textile and garment manufacturing base.

United States and European Union

Buyers here increasingly care about two things beyond price: sustainability certification (GOTS, OEKO-TEX, GRS) and forced-labor supply chain compliance under frameworks like the US Uyghur Forced Labor Prevention Act, which has made Indian cotton yarn more attractive relative to some competing origins.

Vietnam, Turkey, South Korea, Taiwan

Established buyers of Indian synthetic and blended yarn feeding their own garment and technical textile manufacturing.

Compliance: What Actually Matters by Fiber Type

HS Classification and the 85% Rule

Cotton yarn sits under Chapter 52 (headings 5205 and 5206, depending on whether it is 85% or more cotton by weight). Synthetic and blended yarn under 85% cotton content shifts into Chapter 55. Getting this wrong is one of the most common and most avoidable causes of shipping bill rejection and customs delay. Raw cotton fiber, ahead of the spinning stage, sits separately under Chapter 51 for wool and Chapter 50 for silk, with cotton fiber itself under early headings in Chapter 52.

OEKO-TEX Standard 100

Tests finished yarn and thread for harmful substances. Increasingly expected as a baseline requirement by European apparel buyers, regardless of fiber type.

GOTS (Global Organic Textile Standard)

Required if a buyer wants to make organic cotton claims on the finished product. Applies to the full supply chain, not just the raw fiber, so certification needs to be verified at the yarn stage if the buyer intends to carry the claim through to a finished garment.

GRS (Global Recycled Standard)

The certification that matters most for Panipat and Ludhiana's recycled yarn output. Validates actual recycled content percentage and is what European sustainability-focused brands specifically ask for when sourcing recycled yarn rather than virgin fiber.

UFLPA and Forced-Labor Documentation (US Market)

US buyers increasingly require supply chain traceability documentation for cotton specifically, given heightened scrutiny under the Uyghur Forced Labor Prevention Act. Indian cotton yarn exporters who can document their raw cotton sourcing clearly have a real advantage here over origins with less transparent supply chains.

RoDTEP

Remission of Duties and Taxes on Exported Products applies to yarn exports, with the specific rebate rate depending on the HS code. Confirm the rate for your exact classification before pricing an export order.

Government Support

GST Rationalization on MMF Fibers and Yarns

GST on man-made fiber and yarn was reduced to 5%, correcting a previously inverted duty structure that had squeezed working capital for synthetic yarn manufacturers. This aligns fiber, yarn, and fabric tax rates across the MMF chain.

PLI Scheme for Textiles

Covers MMF apparel, MMF fabrics, and technical textiles, running through FY 2029-30. As of March 2026, the scheme had attracted Rs 8,117.64 crore in investment across 170 approved companies and generated over 33,000 new jobs, with Gujarat, Karnataka, Goa, and Tamil Nadu drawing the largest investment shares.

PM MITRA (Mega Integrated Textile Region and Apparel) Scheme

Aims to modernize and integrate established clusters like Tiruppur, Surat, Panipat, Ludhiana, and Ichalkaranji into more technology-enabled manufacturing ecosystems rather than leaving them as fragmented production zones.

Kasturi Cotton Bharat Programme

A traceability and quality initiative meant to improve international market acceptance of Indian cotton, addressing exactly the kind of sourcing transparency concerns that US and EU buyers now expect.

ATUFS (Amended Technology Upgradation Fund Scheme)

Provides capital investment support for spinning and yarn manufacturing technology upgrades, part of the broader special package aimed at keeping India's spinning base competitive against Vietnam and other emerging suppliers.

Ministry of Textiles Support for Sericulture

The Silk Samagra and Silk Samagra-2 schemes under the Central Silk Board fund mulberry cultivation, cocoon production, and reeling infrastructure, aimed directly at stabilizing the raw silk supply base that yarn spinners depend on.

How to Start Exporting Yarn and Fiber from India

Step 1: IEC from DGFT

Mandatory before any export shipment, same as every other export category.

Step 2: TEXPROCIL or relevant export promotion council registration

Cotton yarn exporters register with TEXPROCIL (The Cotton Textiles Export Promotion Council). Silk-specific exporters can register with the Indian Silk Export Promotion Council. This registration is what unlocks RoDTEP facilitation, market intelligence, and trade fair participation support.

Step 3: Confirm your exact HS code

Get the fiber content percentage verified before classifying under Chapter 52 (cotton), 51 (wool), 50 (silk), or 55 (synthetic and blends under the 85% cotton threshold). This single step prevents most classification-related shipment delays.

Step 4: GST and RoDTEP registration

Standard requirement, with the 5% MMF rate now applying specifically to synthetic yarn and fiber.

Step 5: Map buyer-specific compliance

EU and premium US buyers generally want OEKO-TEX at minimum, GOTS if any organic claim is involved, and GRS if the yarn carries recycled content. US cotton buyers increasingly want documented sourcing traceability given UFLPA scrutiny.

Step 6: Sample and trial order

Especially important for blended and technical yarn, where exact count, twist, and fiber ratio need to be confirmed against buyer specification before committing to a full production run.

Pre-Export Checklist

1. IEC from DGFT
2. TEXPROCIL or relevant council RCMC
3. GST registration in place
4. HS code confirmed against exact fiber percentage (85% threshold for cotton vs synthetic classification)
5. RoDTEP rate confirmed for your specific HS code
6. OEKO-TEX Standard 100 certification, if targeting EU or premium buyers
7. GOTS certification arranged if any organic cotton claim is involved
8. GRS certification arranged if exporting recycled yarn or thread
9. Cotton sourcing traceability documentation prepared for US-bound shipments
10. Phytosanitary certificate arranged if exporting raw fiber rather than spun yarn

Related Navi Exports Categories

• Yarn, Threads & Fiber (main category)
• Cotton Yarn
• Silk Yarn
• Wool Yarn
• Synthetic Yarn
• Blended Yarn
• Recycled Yarn & Threads
• Embroidery Threads
• Sewing Threads
• Knitting Yarn
• Textile Fiber

The Bottom Line

India's yarn and fiber export industry is not one story. It is at least five. Gujarat and Punjab spin cotton yarn at a scale that keeps Bangladesh's entire garment industry running. Karnataka feeds the world's second-largest silk supply through cocoon markets that are currently under real agricultural pressure. Surat has quietly built the country's largest synthetic yarn base, now backed by serious PLI investment. Ludhiana keeps wool and knitting yarn moving into its own knitwear export pipeline. And Panipat, once dismissed as a dumping ground for the world's discarded clothing, has turned that waste into one of the more genuinely circular export operations anywhere in the textile world.

The compliance picture splits cleanly by fiber once you know where to look. Cotton yarn classification comes down to a single 85% threshold. Recycled yarn lives or dies on GRS certification. US-bound cotton increasingly needs documented sourcing traceability. None of this is complicated once separated out by category, which is exactly why treating "yarn export" as one undifferentiated topic does new exporters a disservice.

Silk production's recent volatility, up in FY25 after three years of decline, then facing fresh pest pressure in core growing districts, is worth watching closely if silk yarn is part of your sourcing plan. The PLI scheme's technical textiles and MMF push, meanwhile, is the clearest signal of where government support and private investment are both heading next.

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