New Delhi: Home textile exports from India are expected to fall 16-18% year-on-year in FY2023 with a decrease in demand, especially from the US and Europe, and a rise in material and logistics costs, according to a report by CARE. Is. Edge Ratings.
According to a brokerage report, after the boom seen in FY21 and FY22, total textile exports from India declined by 13.4% y-o-y to $23.1 billion during the April-November 2022 period.
In contrast, FY22 saw exports of $44.4 billion, helped by pandemic-induced demand and the China+1 strategy of importing countries.
Home textile is the largest export contributor in the textile industry after readymade garments. The sub-segment registered a growth in exports of around 34% in FY21 and a further growth of 12.6% in FY22.
“CareEdge expects a 16-18% decline in home textile exports in FY23, impacted by recessionary trends in Europe and non-essential spending cuts in the US amid high inflation. While rupee depreciation against the dollar and China+1 policy across the globe prevent turnover decline for Indian home textile players, margins will shrink by 400-500 bps due to lower operating leverage given lower capacity utilisation," said Aarti Roy, associate director.
He added that demand momentum should see a gradual recovery from Q1 FY24 onwards as material and cotton costs appear to be softening and retailers are liquidating inventory.
After peaking in Q2 FY22, exports started decelerating with a sharp jump in commodity inflation and a global recessionary trend disrupting growth.
“Indian home textile exports grew from USD 5.3 billion in CY17 to USD 8.0 billion in CY22, registering a compound annual growth rate (CAGR) of 7.1%. After peak growth in Q3FY22, home textile exports started softening Q-o-Q on the back of ever-increasing cost of cotton, inflation in the US; and recessionary pressures in Europe," Care Edge said.
No comments:
Post a Comment