The revenue of India's home textile exporters is expected to increase by roughly 20%
02 November 2021, Mumbai:
India's home textile exporters are expected to boost revenue by over 20% in fiscal 2022, as well as increase worldwide market share, thanks to strong retail sales in the US and a stronger prognosis for the forthcoming festive season in export-dominated countries.
Homegrown domestic textile exporters are likely to benefit from global corporations adopting a "China plus one" sourcing model. According to a report by Crisil, a major rating organisation, this was based on an analysis of 50 home furnishing export companies.
This fiscal year, Crisil expects the companies it studied to increase their operating profitability by 200-250 basis points to 18%. It's worth noting that exports account for 60% of India's home textiles business, which is worth Rs. 55,000 crore.
"Export demand has been good so far this fiscal," said Gautam Shahi, Director of Crisil Ratings, "and is likely to be strong in the third quarter, as the impact of the pandemic wanes."
The United States represents 55% of the Indian home textile sector's export income. According to Crisil estimates, exports to the market increased by 42% year over year in the first half of calendar 2021, compared to 15% growth in the pre-pandemic period of calendar 2019.
The strategy of 'China plus one' is certainly working. This is reflected in a dramatic increase in India's proportion of US imports of cotton bed sheets and terry towels from 46% in calendar 2020 to 51% in the first eight months of calendar 2021, compared to 46% in calendar 2020, while China's share has decreased to 16% from 20%.
When compared to pre-pandemic levels of 68 percent, the average capacity utilisation of three significant listed home textile operators in the bed linen segment grew to 87 percent in the first quarter of the fiscal year. The RoSCTL plan will be extended through March 2024, and improved capacity utilisation will help offset the significant increase in cotton prices, which is the major raw material.
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