Home textile exports likely to drop 16-18% in FY 2023: Report

New Delhi, Feb 9 (KNN) Due to the increase in material and logistic costs and the slowing down of demand from the US and Europe, the Home textile exports from India are expected to fall 16-18 per cent year-on-year in FY23, according to a report by Care Edge Ratings.

The home textile is the second largest export contributor in the textile industry after the ready-made garments. The sub-segment reported growth in export of around 34 per cent in FY21 and further growth of 12.6 per cent in FY22.

However, the CareEdge reports points to a 16-18 per cent DEgrowth in home textile export in FY23, impacted by the recessionary trend in Europe and cut down on non-essential expenses in the US amid high inflation.

“While the depreciating rupee against the dollar and China+1 policy across the globe restricts turnover fall for Indian home textile players, margins would contract by 400-500 bps due to lower operating leverage given lower capacity utilization,” said Arti Roy, Associate Director.

Demand momentum should witness gradual recovery from Q1FY24 as freight and cotton costs show moderation and inventory exhausts with retailers, she added.

After witnessing a rise in the FY21 and FY22, the overall textile exports from India contracted by 13.4 per cent y-o-y at USD23.1 billion during the April-November 2022 period, the report pointed out.

In contrast, FY22 witnessed exports of USD 44.4 billion, helped by the pandemic-induced demand and the China+1 strategy of importing nations.

“The Indian home textiles exports grew from USD 5.3 billion in CY17 to USD 8.0 billion in CY22, recording a compounded annual growth rate (CAGR) of 7.1 per cent. After peak growth in Q3FY22, home textile exports started moderating Q-o-Q due to continuous rising cost of cotton, inflation plaguing the US; and recessionary pressure in Europe," Care Edge said.

The US and Europe are the major market for home textile constituting approximately 68-70 per cent of the home textiles imports.  (KNN Bureau)