(source : ANI) ( Photo Credit : ani)
Indian home textile manufacturers are facing tough times ahead, with experts predicting a 5-10% drop in revenue and lower profits this fiscal year. This comes after the US slapped 50% tariffs on these products, effective from August 27, according to a new report from Crisil Ratings.
Home textiles, like bedsheets, curtains, and towels, rely heavily on exports—making up about 75% of the industry’s total revenue. The US is a major market, so these tariffs hit hard.
But it’s not all doom and gloom. The Crisil report highlights three factors that could soften the blow: First, companies frontloaded sales big time between April and August this year, shipping out orders before the tariffs kicked in. Second, rivals like China, Pakistan, and Turkey don’t have enough capacity to ramp up production of cotton-based home textiles, where India enjoys lower tariffs. Third, Indian exporters are eyeing new markets to shift focus.
Plus, stronger balance sheets—thanks to less debt—will help protect their credit ratings amid the shake-up.
Manish Gupta, Deputy Chief Rating Officer at Crisil Ratings, explains it simply: “Home textiles are luxury buys, not essentials. Exports to the US grew just 2-3% in the first quarter of this fiscal year because retailers there were wary of inflation. But before the tariffs hit, we saw a surge in orders—smart frontloading.”
Gupta adds that India’s edge over competitors should keep it competitive in the US for now, capping the revenue dip at 5-10% for the home textile industry this year.
The pain will be sharper for firms that get over half their sales from the US. To fight back, they’re turning to the European Union (EU) and the UK, which together took 13% of India’s home textile exports last year. With a fresh free trade deal opening doors in the UK, and the EU as a steady option, exporters plan to push harder there.
Gautam Shahi, Director at Crisil Ratings, warns it won’t be quick: “Building sales in these new markets will take time. In the meantime, profits from US exports could plunge this year as Indian firms eat some tariff costs and US demand softens due to inflation. We might even see oversupply spilling into other markets and India’s domestic scene, dragging industry-wide operating profitability down by 200-250 basis points from last year.”
Overall, the home textile sector in India is adapting fast, but these US tariffs on exports are testing their resilience. Stay tuned as manufacturers pivot to global opportunities.
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