Elevated freight costs due to peak season shipments and the on-going Red Sea issue are expected to decrease in the coming months, potentially improving margins for Indian companies.
Financial advisory firm JM Financial stated that internal turmoil in Bangladesh and high production costs in Vietnam are likely to benefit Indian textile exporters. The firm highlighted that the significant market size, superior execution, and the UK Free Trade Agreement (FTA) could favour key players in India’s home textile and apparel sectors.
Bangladesh and Vietnam, being major textile and apparel manufacturers and exporters, are experiencing challenges that could offer opportunities for Indian exporters. The report further emphasised that the large addressable market, effective execution, and the UK FTA bode well for India’s textile industry.
JM Financial also pointed out that elevated freight costs due to peak season shipments and the on-going Red Sea issue are expected to decrease in the coming months, potentially improving margins for Indian companies. Additionally, deflation in yarn costs is anticipated to provide further margin support.
India’s market share in apparel exports to the US and UK has steadily increased, reaching 7 per cent and 6 per cent respectively in 2024, up from 5 per cent and 6 per cent in 2023.
Meanwhile, China has been losing market share globally. The report revealed that the UK market share has dropped from 27 per cent in 2020 to 19 per cent in 2024, mainly due to rising labour costs and the on-going China+1 strategy.
The report also suggested that global demand might see a slight increase due to the on-going holiday season, as the global inventory de-stocking cycle has ended. Indian exporters are expecting better demand in the second half of the year, as retailers prepare for the holiday season.
According to Invest India, the domestic textile market, valued at approximately $165 billion in 2022, with $125 billion from domestic sales and $40 billion from exports, is projected to grow at a compound annual growth rate (CAGR) of 10 per cent, reaching $350 billion by 2030.
India remains one of the world’s largest producers of textiles and apparel.