Yarn Supply Scheme (YSS)

Yarn is the major raw material used by the handloom sector. Being dependent on

yarn, manufacturers/traders and handloom weavers are facing shortage with escalating prices. The National Handloom Development Corporation Limited (NHDC) was set up to address the problems. The Yarn Supply Scheme (YSS) seeks to provide under-privileged handloom weavers with subsidized yarn and help them compete with the mill and power loom sectors.

Mill Gate Price Scheme

Mill Gate Price Scheme (MGPS) has been in effect since 1992 to make yarn available to

handloom weavers by reimbursing transportation charges to depot operating agencies. Freight is reimbursed and depot operating charges at 2% is given to depot operating agencies. Funds for YSS are released to NHDC as per proposals initiated and utilization of previously released funds. The Mill Gate Price Scheme (MGPS) has been continued along with a subsidy of 10% and modifications. This scheme is called the Yarn Supply Scheme (YSS) with a total outlay of Rs.433 crores. Mill Gate Price is the price at which the yarn is procured from registered license holders of Silk Exchange. Cotton hank yarn is obtained from the mills producing hank yarn under the Hank Yarn Packing Obligation as recorded by the Textile Commissioner. This helps remove monopoly and cartels. NHDC procures yarn in huge quantities and thus the MGP is lesser than that procured by wholesalers at the mill gate.

10% subsidy under YSS

As handloom products are inherently expensive due to long lead time in weaving due to complex and exquisite designs, and lower productivity as compared to powerloom, it is essential to provide explicit subsidy on hank yarn. 10% subsidy is applicable on cotton yarn and domestic silk; subject to quantity caps. Now, wool for individual weavers and weavers’ cooperative societies is also subjected to 10% subsidy.

NHDC Depots

NHDC has warehouses or depots at major places to stock varieties of yarn to reduce delivery time. This way, smaller quantities can then be supplied to individual units and weavers in lesser time. A person is appointed for each major cluster to collect the indents from the handloom weavers and to coordinate with them. This indent is then submitted to the nearest NHDC warehouse. At the NHDC depot, individual invoices are created so that yarn is distributed to the respective handloom weaver and the payment collected. A service charge of 1.5% to 2% is charged for depot operating charges.

Mobile Vans

GSP-enabled vehicles are used for transporting the yarn. This GPS information is integrated with the e-Dhaga app so that all associated agencies are able to keep track. Yarn depots are opened in the

Handloom Clusters. The mobile vans travel through the villages for about 20 days a month. They serve as a collection point for the handloom products as well as the supply source for the yarn.

Eligibility for Yarn Supply Scheme (YSS)

All Handloom Development Centres
Handloom Organizations, including weavers’1 at the National/State/Regional/Primary levels
Handloom manufacturers registered with Export Promotion Council under the Ministry of Textiles or exporting directly
Individual Weaver entrepreneurs
Member of approved Handloom associations
Producers who are within the handloom clusters sanctioned under Mega Clusters or Integrated Handloom Textile Parks
Any other agency approved by the Office of the Development Commission (Handlooms), Ministry of Textiles

These eligible agencies place their indents on NHDC. A tie-up between NHDC and suppliers is arrived at. A yarn-passbook is given to first-user agencies to avail the 10% subsidy. This can be applied for on the NHDC website. (

/). All types of yarn are supplied such as polyester, acrylic, rayon, jute, blended yarn and zari. But all of them are not eligible for a 10% subsidy. The procedure of advance payment to precede indenting and supply of yarn (15 to 45 days) is waived for individual weavers and primary weavers’ societies. National Handloom Development Corporation (NHDC) has open distribution centres to introduce cash sales of yarns to them.

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Frequently Asked Questions

Common questions about Yarn Supply Scheme.

The Yarn Supply Scheme (YSS) is a government initiative that aims to provide underprivileged handloom weavers with subsidized yarn. It seeks to help them compete with the mill and power loom sectors by making yarn more affordable and accessible.

Agencies eligible for the Yarn Supply Scheme (YSS) include Handloom Development Centres, handloom organizations, registered handloom manufacturers and exporters, individual weaver entrepreneurs, members of approved handloom associations, producers within sanctioned handloom clusters or parks, and any other agency approved by the Office of the Development Commissioner (Handlooms).

Under the Yarn Supply Scheme (YSS), a 10% subsidy is applicable on cotton yarn and domestic silk, subject to quantity caps. This subsidy aims to make handloom products more affordable, as they are inherently expensive due to the complex and time-consuming weaving process.

The Mill Gate Price Scheme (MGPS) has been in effect since 1992 to make yarn available to handloom weavers by reimbursing transportation charges to depot operating agencies. It has been continued alongside the Yarn Supply Scheme (YSS) with a 10% subsidy and modifications.

The National Handloom Development Corporation (NHDC) has warehouses or depots at major places to stock various yarn varieties. This reduces delivery time, allowing smaller quantities to be supplied to individual units and weavers efficiently.

GPS-enabled mobile vans are used for transporting yarn under the Yarn Supply Scheme (YSS). These vans travel through villages, serving as collection points for handloom products and supply sources for yarn.

The Mill Gate Price is the price at which yarn is procured from registered license holders of the Silk Exchange. Cotton hank yarn is obtained from mills producing hank yarn under the Hank Yarn Packing Obligation, as recorded by the Textile Commissioner. This process helps remove monopolies and cartels.

Under the Yarn Supply Scheme (YSS), various types of yarn are supplied, including polyester, acrylic, rayon, jute, blended yarn, and zari. However, not all types of yarn are eligible for the 10% subsidy.

The procedure of advance payment to precede indenting and supply of yarn (15 to 45 days) is waived for individual weavers and primary weavers' societies under the Yarn Supply Scheme (YSS). NHDC has also opened distribution centres for cash sales of yarns to these groups.

A yarn-passbook is provided to first-user agencies under the Yarn Supply Scheme (YSS), allowing them to avail the 10% subsidy. This passbook can be applied for on the NHDC website.