Unfavorable textile market dynamics in Bangladesh and Vietnam positive for Indian exporters: Report
Dec 06, 2024
New Delhi [India], December 6 : The internal turmoil in Bangladesh and high production costs in Vietnam are expected to play well for Indian textile exporters, asserted financial advisory firm JM Financial in a report.
"The internal turmoil in Bangladesh and high factor costs in Vietnam might play well for Indian exporters. The huge addressable market size / top-notch execution / UK FTA bode well for key players in India's home textile/apparel sector," read the report
Bangladesh and Vietnam are key manufacturers and exporters of textiles and apparel.
According to the firm's report, the huge addressable market size, top-notch execution, and FTA with the UK bode well for key players in India's home textile and apparel sector.
The elevated freight costs due to peak season shipments and the Red Sea issue are expected to cool off in the coming months, which will aid margins for Indian players. The deflation in the cost of yarns will also aid margins.
India's market shares in apparel exports to the US and the UK have risen steadily to 7 per cent and 6 per cent in 2024 from 6 per cent to 5 per cent in 2023.
At the same time, China has been losing market share across the world. As per the JM Financial report, the UK market share is down from 27 per cent in 2020 to 19 per cent in year-to-date of 2024) with rising labour costs amidst the China+1 theme playing out.
Overall, global demand might see a marginal uptick given the ongoing holiday season, it asserted.
The global inventory de-stocking cycle has now come to an end with Indian players expecting relatively better demand in the second half compared to the first as retailers get ready for the holiday season.
According to Invest India, the domestic textile market, valued at around USD 165 billion in 2022, including USD 125 billion from domestic sales and USD 40 billion from exports. Projections indicate that the market will grow at a compound annual growth rate (CAGR) of 10 per cent to reach USD 350 billion by 2030.
India is one of the world's largest producers of textiles and apparel.
