Indian Home Textile Sector To Grow 8-10% In FY25 Amid Global Recovery
Drivers of this recovery are rising per capita income, rapid urbanisation, a thriving real estate market and greater hygiene awareness following COVID-19.
The Indian home textile industry is poised for a significant revival, with sales predicted to increase by 8 to 10 per cent in FY25 after a tough FY23. According to a CareEdge Ratings analysis, important drivers of this recovery are rising per capita income, rapid urbanisation, a thriving real estate market and greater hygiene awareness following COVID-19.
Globally, the home textile business was valued at USD 122 billion in 2023 and is forecast to reach USD 134 billion by the end of 2024, rising at a CAGR of 5 to 5.5 per cent, with a market value of USD 185 billion by 2030. China dominates the global market with exports of around USD 23 billion, followed by India at USD 5.7 billion and Turkey at USD 4.2 billion. The United States remains the top importer, accounting for 30 per cent of worldwide home textile imports, with India ranking second at 29 per cent, trailing only China.
India's domestic textile exports increased by 12.27 per cent between CY19 and CY23, establishing the country as a major player in the US market. Carpets, rugs, bed linen and kitchen linen remain popular export items. However, after peaking in FY22 with 26 per cent year-over-year increase driven by pandemic-induced demand, the industry encountered challenges. Cotton prices soared to Rs 1,00,000 per candy by mid-2022, while the Russia-Ukraine war increased freight expenses, reducing profitability. Exports fell by 12 per cent year on year in FY23, from Rs 14,200 crore in Q2 FY22 to Rs 11,200 crore in Q4 FY23.
Recovery And Outlook For FY25
Despite these losses, the industry began to recover in FY24, with exports trending upward, mainly to the US. Cotton prices have stabilised between Rs 160 to Rs 164 per kg, allowing manufacturers to re-establish profitability. Freight prices, while still high due to the ongoing Red Sea situation, have decreased from their peak levels, contributing to better financial performance, CareEdge Ratings stated.
The recovery is also aided by Indian home textile companies' robust bank sheets, with many investing in capacity development to meet rising worldwide demand. CareEdge Ratings predicts that the industry will sustain operating margins of 14 to 15 per cent in FY25, owing to stable raw material prices and growing demand from important countries such as the United States and Europe.
While freight prices continue to be an issue, the transition towards sustainable and eco-friendly products is projected to play an important part in the industry's growth. India continues to benefit from the China+1 strategy, which has seen multinational corporations diversify their supply chains away from China, creating possibilities for Indian exporters.
