India losing share in US home textile market

India has lost its market share in some of the key home textile segments in the US market in the past few months as high cotton prices rendered Indian products less competitive in the international market.

As per the US Office of Textiles and Apparel (Otexa) data, India's share in the cotton bed sheet and terry towel segments have declined sharply in the past few months. China and Pakistan were seen grabbing this share from India.

In the cotton bedsheet market in the US, India had 67 per cent share in May 2021. This has dropped to 53 per cent as of March 2022. Meanwhile, China increased its share in the segment from

10 per cent to 16 per cent and Pakistan, from 14 per cent to 22 per cent.

In the terry towel segment, India's share dropped from 47 per cent in May 2021 to 41 per cent by March 2022. China, in the meantime, increased its share from 17 per cent to 19 per cent and Pakistan from 22 per cent to 23 per cent. Other players also gained share from 14 per cent to 17 per cent.

According to Motilal Oswal, the doubling of cotton prices in the past

18 months has been a major headwind for Indian home textile exports. Though the international prices were also on an uptrend, the domestic price movement was unmatchable.

Further, consumption in the key markets have been affected by high levels of inflation and rising interest rates. In addition, destocking by retailers in the US, due to inventory build-up from the holiday season, impacted volume growth in the home textile industry.

Apart from the cotton price advantage, Pakistan and China also benefited from their currency movement against the dollar, which favoured their exports more than India's.

With cotton prices staying firm, Motilal Oswal expects that home textiles will continue to face headwinds and muted demand in the near-term.