India gains market share from China as textile exports to the U.S. soars during pandemic

Mumbai: Exports from India surged this year as demand for textiles recovered in the United States, helping it gain market share from China. The total exports of yarn to household textiles to the U.S. in the first five months of the year rose 46.4% over the previous year to $4.5 billion (about Rs 33,000 crore), according to data provided by U.S. textile trade association Otexa, a body of the U.S Department of Commerce.

The demand recovered in the U.S. after vaccination against Covid-19 picked up pace. In addition to a surge in exports from India, a shift away from China is happening, as American importers expand supply chains outside of China in response to tariffs.

Apart from India, Vietnam and Bangladesh have also benefited from China losing U.S. apparel orders. However, unlike Bangladesh or Vietnam, India controls the entire cotton supply chain from growing the cotton to the manufacturing of the final product, giving it a significant advantage.

With a 14% market share, India ranks 2nd in yarn exports and is also 2nd in home textiles with 11%. A 4% share of the world’s textile and apparel trade is held by the nation.

“China has lost market share due to higher tariffs, and many importing countries are seeking alternatives,” said Kailash Lalpuria, CEO of Indo Count Industries Ltd., which supplies global chains including Bed Bath & Beyond and Walmart. Lalpuria said people are still working from home and buying household textiles. This has resulted in higher exports.

An improving economic climate has also boosted demand for credit among textile exporters. According to the Reserve Bank of India, gross bank credit to the sector rose from Rs 1.9 lakh crore in December last year to Rs 2.05 lakh crore as of May.

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The cost of raw materials, as well as logistics, containers, and freight, is increasing. Labor costs rose as a result of a shortage of workers during the second wave of the pandemic. As a result, Indian exporters have raised their prices.