India's Cotton Bedlinen Exports Continue On The Growth Path

Market Intelligence

India's Cotton Bedlinen Exports Continue On The Growth Path

Global recessionary trends have taken a toll on India's home textile exports. Exports of home textiles (under HS Code 63) were down 1.28% to US$ 4586.05 million, during 2015-16.

India's main items under the segment - bed linens, table linens amounted to US$ 1430.95 million during the year, growing at a rate of 1.75%. Bedlinens account for 31.20% of total home textile exports. Furnishings which account for almost 35% of the home textile exports, saw a drop of 6.58% to US$ 1602.57 million. While overall home textile exports are down, there are some bright spots. Home textiles, especially cotton home textiles, were expected to drive growth of value-added cotton textile exports. And the expectations from the segment continue to remain high.

Cotton bedlinen exports rule

While overall, exports have declined, performance of cotton bed linens has been exceptional, recording significant increase in the last one year. Exports were of the amount of US$ 252.09 million, an increase of over 90% compared to a year ago. US is the single largest market accounting for the lion's share of 72%. Exports to the US grew 70.18% in 2015-16. The other important markets include Germany, the Netherlands, Canada, Australia, Spain. Exports to all these countries grew in high double and triple digits.

Cotton bedsheets, bed covers exports fumble

In contrast, exports of cotton bedsheets and bed covers recorded a drop of 9.32% to US$ 739.68 million. Here too, USA is the largest market accounting for a share of 76.05%. While exports to USA at US$ 562.53 million witnessed a fall of 3.81% in 2015-16, exports to all other markets fell 20-40%. Spain was the only exception, where India's exports of cotton bedspreads were up 6.24% to US$ 9.71 million.

Terry towel exports slow down

Another important product category in home textiles from India is cotton terry towels. Terry towel exports have however fallen almost 13% in 2015-16, to US$ 103.76 million. USA again is the largest market for India's terry towels, acccounting for a share of 42.09%, followed by UAE with a much lower share of 13.28%. However, exports to USA were down 9.4% to US$ 43.67 million. Exports to the UAE went up by 3.69% to 13.78 million.

Other important markets include UK (growth of 6.26%), Chile (81.22%), Canada (40.6%), South Africa (129.71%). Unit realisation on average has taken a fall of 11.83% to US$ 1.40 a unit. Unit realisations range from US$ 1.2-2.37 a unit, in the top markets.

US and other markets, going forward

As per the recent data from OTEXA, made ups imports of the US have grown by 2-3% from March 2015 to March 2016. Made-ups imports from India increased at a higher rate roughly at 8% for the financial year 2016. Chinese growth is flat, India has been able to gradually increase its share in global textile market.

The US bed linen market, and particularly the bed sheets retail market is valued at US$ 4.5 billion. India's share in this market is approximately 48% and expected to increase going ahead. The other new categories like fashion, utility and institutional bedding have a large market size of US$ 10 billion where India's presence is negligible at present. China dominates in these categories, but with higher costs, India will become an emerging force over the years.

Other countries like UK, Europe and Australia are shaping up well.

The EU is a larger market than the US, valued at around US$ 16 billion. However, with EU's trade preferences to Bangladesh and Pakistan in terms of duty-free access, Indian exporters are at a loss, as we have to pay around 10-15% duty for exporting to the EU. The India-EU FTA will certainly help. The UK, which ranks among the top 10 home textile markets for India, has till recently been pro-blends, but is now showing a distinct preference for cotton textiles. This could help India grow exports to the UK, however, the uncertainty today will keep things slow.

Other emerging markets for Indian home textile are South Africa, Latin America, and also the Middle East.