The Indian home textile industry is on the cusp of a remarkable revival, with projections indicating an 8-10 percent sales growth for the fiscal year 2024-25 (FY25). This positive outlook comes after a challenging period in FY23, and it's attributed to a combination of key change factors, reveals a report by the credit rating agency CareEdge Ratings. This positive outlook is driven by a number of factors like: stable raw material prices, improvement in demand from key importing nations, and robust domestic consumption.

Several factors have led to the growth spurt. For example, rising per capita income with higher disposable incomes consumers are willing to spend more on discretionary items like home decor and textiles. Rapid urbanization is another factor as the ongoing shift of population to cities is driving demand for housing and, consequently, home furnishings. A buoyant housing sector is further boosting demand for home textiles. And more importantly, greater hygiene awareness is another growth driver as the COVID-19 pandemic has heightened awareness about hygiene, leading to increased consumption of home textiles.

Navigating a turbulent time

The past three years have been a rollercoaster ride for the Indian home textile industry. After a major demand surge in FY22, due to pandemic-induced lockdowns and increased consumer spending on home improvement, the sector faced significant challenges in FY23.

Table: Growth trends over the years

Catalyst to change 

CareEdge Ratings highlights several key factors contributing to the projected growth.

Stable raw material prices: After a period of volatility, cotton prices are expected to stabilize, providing much-needed relief to manufacturers.

Improved demand from key export markets: As major economies recover, demand for home textile products from key export markets like the US and Europe is anticipated to improve.

Growth in domestic consumption: Rising disposable incomes, increasing urbanization, and a growing preference for branded products are driving domestic demand.

Government initiatives: Supportive government policies, such as production-linked incentive (PLI) schemes, are encouraging investment and expansion in the sector.

Table: Home textile sector growth rate

In fact, several home textile companies in India are already reaping the benefits of this favorable market environment. For example, Welspun India, the leading player has reported a strong increase in sales in recent quarters, driven by both domestic and export demand. Bombay Dyeing, the established brand has successfully repositioned itself to cater to the evolving preferences of urban consumers. Indo Count Industries, the export-oriented company is capitalizing on the growing global demand for Indian home textiles.

It maybe noted that the growth of the Indian home textile sector is in sync with global trends. The global home textile market was valued at $122 billion in 2023 and is expected to reach $134 billion by the end of 2024. It's projected to grow at a CAGR of 5-5.5 per cent to reach $185 billion by 2030. India, with its strong raw material base, skilled workforce, and competitive manufacturing capabilities, is poised to play a key role in this expanding market.

The Indian home textile sector is set for a strong growth path in coming years. The convergence of various factors, both domestic and global, is creating a conducive environment for businesses. Companies that can adapt to the changing market dynamics and leverage their strengths are likely to thrive in this promising landscape.