The blanket industry in Panipat, already grappling with a slowdown in overseas markets amid the Iran-Israel-US conflict, is facing a nearly 50% decline in domestic demand this season. Production has fallen by around 30-35%, while mounting raw material costs and inflation have further squeezed manufacturers. Industry representatives said yarn that cost Rs 100-105 per kg last year was now priced at around Rs 155 per kg, pushing up manufacturing costs and retail.