Domestic textile exports are expected to increase by 20-25 percent in FY22

"Home textile exports were one of the first few textile segments to recover from the impact of the pandemic last fiscal, with companies reverting to year-on-year growth from the second quarter of FY21 itself and reporting three consecutive quarters of double-digit growth thereafter," said Pavethra Ponniah, Icra Senior Vice President and Co-Group Head, Corporate Sector Ratings.

According to her, export demand has been mostly driven by the United States, the largest market, which accounts for 60% of India's domestic textile exports.

India's home textile product exports to the US increased by 14 per cent in FY21, while exports to other major markets of the UK and EU reported a y-o-y decline. India's larger exporters have a robust order backlog and are likely to rely more on job-work or outsourcing to fulfil delivery commitments over the next few quarters, the report said.

Icra said the larger exporters have a robust order backlog and are likely to rely more on job-work or outsourcing to fulfil delivery commitments over the next few quarters. The rating agency expects operating efficiencies and re-negotiation of product prices amid sustained cost pressures to help companies maintain their profitability at robust levels.