Cotton yarn exports up, India's textiles eye revival.

India's textile industry is showing tentative signs of revival, driven by An increase in cotton yarn exports and a slight uptick in demand from the US and Europe. This follows a prolonged slump since the pandemic.

Exports of garments, yarn and fabrics rose to $17.9 billion between October 2023 and May 2024, compared to $17.5 billion the prior year. Yarn exports saw a particularly strong increase, up 51 per cent.

However, experts warn this recovery is fragile. Domestic demand remains below pre-pandemic levels, and recent cotton price hikes are eroding the cost advantage Indian manufacturers enjoyed.

Some positive factors include better cotton production in India compared to competitors and a China+1 strategy by some companies seeking alternatives to China. E-commerce growth in India is also boosting domestic sales.

Challenges include ongoing global instability, rising production costs (partly due to higher freight charges), and inflation dampening consumer confidence. This is keeping order books lean, with a three-month cycle compared to the pre-pandemic six months.

The government is aiming to bolster the industry by potentially including garments in its production subsidy scheme and reviving a park development program. They've also set an ambitious export target of $50 billion for this year.