Due to strong demand, a global vendor diversification program, and merchants replenishing their inventory at strategic export destinations, India’s home textile export growth rose to over 10 per cent in the 9M FY 2025 from about 3 per cent in FY 2024.
With a 59 per cent share in FY 2024 and a 56 per cent share in 9M FY 2025, the US continues to be the biggest market for Indian home textile exports. The medium-term economic boost would still be reliant on the US’s continued tariff-related uncertainty and the outcome of the free trade agreements with the EU and the UK.
With increased focus on home aesthetics and personal well-being, the carpets/floor coverings and bed/table/toilet/kitchen linen segments grew by about 13 per cent YoY in 9M FY 2025, while other categories (such as blankets and other furnishing products) had slower development.
Due to poor demand sentiments, US retail sales of furniture and home furnishings stores decreased 2 per cent year over year in CY2024. But in Q4 of 2024, there were signs of recovery (up 5.5 per cent YoY).
Increases in export volumes, domestic sales, and inorganic expansions by a few key players drove a 14 per cent YoY revenue growth in FY 2024 for the four companies in ICRA’s sample set, which represents around 50 per cent of the industry size. However, the growth rate slowed to about 8 per cent YoY in 9M FY 2025.
With growing volumes and realisations, ICRA projects that industry revenues will increase by 7-9 per cent in FY 2025. The industry is also expected to stay strong in FY 2026 thanks to the China Plus One vendor strategy, improvements brought about by importers’ inventory liquidation, and advantageous exchange rates.
Regarding costs, although the prices of raw materials stayed relatively constant in FY 2025, it is anticipated that increased logistics and other operational expenses will reduce operating margins by 100–150 basis points and keep them between 13 and 15 per cent for home textile companies in that year. The margins in FY 2026 will be supported by steady export incentives, favourable exchange rates, and better scale economics.
