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For decades, the West’s discarded winter wear has come to Haryana’s Panipat to be ripped apart, tuned into shoddy yarn and reborn as cheap, warm blankets. But a new type of Chinese fleece, which is lighter, softer and cheaper, has shifted demand, shrinking business at the world’s castoff capital, with blankets made from virgin polyester yarn. Panipat, once accounting for 90% of shoddy blankets used worldwide now finds its prime product facing failure, rising production costs and the industry shifting to cotton yarn to compete.