Home textile exports from India may fall 16-18% in FY23: Report

India’s home textile exports are expected to decline by 16-18% in FY23 as compared to FY22 due to slow down in demand from the US and Europe, according to a report by CareEdge. The US and Europe have been the major market for home textile exports constituting approximately 68-70% of the home textiles segment.

After a boom in FY21 and FY22, the overall textile exports from India contracted by 13.4% YoY to $23.1 billion during the April-November 2022 period compared with an export of $44.4 billion in FY22 and $31.5 billion in FY21.

India’s home textile segment, which is the second largest export contributor in the textile industry after ready-made garments, saw its exports drop by 3% in FY22 post the abnormal growth of 10% in FY21 YoY, the report said.

The Indian home textiles exports grew from $5.3 billion in CY17 to $8 billion in CY22, recording a compounded annual growth rate (CAGR) of 7.1%. However, after peak growth in Q3FY22, home textile exports started to moderate quarter-on-quarter due to continuous rising cost of raw materials, inflation plaguing the US and recessionary pressure in Europe.

The export demand was dented by an uptrend in key raw material prices like cotton which led to higher finished good prices hurting the demand. The financial year 2022 and first quarter of FY23 recorded a significant increase in cotton prices month-on-month until May 2022, but price moderated as export demand declined.

Moreover, bed, table, and bath linen imports by US and Europe market saw signs of contraction by around 8.1% in FY22 and a similar trend was observed in another significant home decor category which includes curtains and blinds. Exports of drapes and blinds from India shrunk by 14.5% in FY22 after reaching $6.2 billion in FY21.

Besides, weak consumer sentiments and soft demand are expected to result in a decline in exports by 16-18% in FY23 on a yearly basis, CereEdge said in the report. In addition, higher operating cost and lower capacity utilisation are likely to weigh on turnover by 10%-12% in FY23 (considering the top four players) and margin contraction by 400-500 bps, CareEdge noted.