Internal unrest in Bangladesh and high costs in Vietnam boost India’s textile export prospects, says JM Financial.
Financial advisory firm JM Financial has projected a positive outlook for Indian textile exporters due to the ongoing internal turmoil in Bangladesh and high production costs in Vietnam. These challenges are expected to benefit India’s textile industry as global demand dynamics shift.
The report highlights that Bangladesh and Vietnam, both key manufacturers and exporters of textiles and apparel, are facing significant hurdles. While Bangladesh grapples with internal unrest, Vietnam’s high production costs are pushing international buyers to look elsewhere. These factors are now playing in favor of Indian exporters, particularly in the home textile and apparel sectors.
Key factors supporting Indian growth include:
- Market Opportunities: India’s access to a large addressable market and its strong execution capabilities.
- Trade Agreements: The UK Free Trade Agreement (FTA) further bolsters India’s position.
- Rising Global Share: India’s market share in apparel exports to the US and UK has grown steadily, reaching 7% and 6% in 2024, up from 6% and 5% in 2023.
In addition, the report notes that freight costs, which have been elevated due to peak season shipments and the ongoing Red Sea issue, are expected to stabilize in the coming months, improving margins for Indian exporters. Moreover, the deflation in yarn costs will further support profitability.
As global demand is poised to see a marginal uptick, particularly with the holiday season approaching, the outlook for India’s textile sector looks promising. India’s textile market, valued at approximately USD 165 billion in 2022, is expected to grow at a CAGR of 10%, reaching USD 350 billion by 2030.
With the ongoing shift away from China’s dominance in the sector, Indian exporters are poised to capture more market share, especially in key Western markets like the UK.
