Indian Home Textiles Sector Set for Recovery After Pandemic-Driven Surge

Bengaluru, Sep 25 (KNN) India's home textiles industry, a key player in the global market, experienced a notable export boom during the COVID-19 pandemic, peaking at USD 7.1 billion in FY22.

Driven by a surge in demand from Western markets looking beyond China, the sector saw an unprecedented 13 per cent year-on-year growth in FY21, as global supply chains shifted and home renovation trends spiked amid lockdowns.

However, the industry soon faced a series of cost pressures, which dampened its growth in the following years.

According to a recent report by CareEdge Ratings, the sector is now on a recovery trajectory and is expected to grow by 8-10 per cent in FY25, supported by stabilising costs and a resurgence in domestic and international demand.

During the height of the pandemic, India emerged as a strong contender in the global home textiles market, although still a distant second to China.

While China continues to dominate the global market with a 35 per cent share, India commands a 29 per cent share, particularly in the critical US market, the largest importer of home textiles.

This surge in demand, however, was followed by a challenging year in 2023, as raw material and logistics costs escalated.

Cotton prices soared to Rs 272/kg, and freight costs surged, primarily due to rerouting brought about by global supply chain disruptions.

2024 is seeing a turnaround as cotton prices have stabilised between Rs 160-164/kg, marking a sharp correction since December 2022.

Additionally, with domestic real estate booming and rising urbanisation driving local demand, the industry is poised for renewed growth.

The six largest manufacturers, who account for 65 per cent of the market share, posted a 10 per cent rise in their total operating income in FY24 after an 8 per cent decline the previous year.

Despite these positive developments, challenges remain. Geopolitical tensions, particularly the Red Sea crisis, have continued to inflate freight costs as Indian exporters have had to reroute 95 per cent of vessels, pushing up logistics expenses by nearly fivefold.

While global oil prices have cooled significantly since their peak in 2022, these volatile conditions keep pressure on the sector.

With a steady domestic market and improving export demand, India’s home textiles sector appears to be emerging from the storm, poised for moderate but stable growth in the coming years.

(KNN Bureau)