The unsettling global trade conflict between the US and China may become a silver lining for home-textile exporters from India.
Although benefits could be insignificant if the US demand remains subdued, Indian companies expect to benefit from the imposition of US duties on imports from China. Beginning September, import duties will kick in on home textiles, including towels and sheets.
India being a large producer and exporter of such products local companies can expect to benefit. “Indian home textile exporters stand to benefit in volumes/market share if the duty persists,” analysts at JM Financial Institutional Securities Ltd said in a note.
Analysts, managements of Welspun India Ltd, Indo Count Industries Ltd and Himatsingka Seide Ltd alluded to the advantageous context the tariffs created for Indian companies in the US market.
A significant portion of China’s share is being captured by other emerging countries such as Vietnam and Bangladesh.
Compared to India, these countries have better trade pacts with the US and offer superior incentives to their domestic producers, sharpening their competitive edge.
Even then, for Indian home-textile companies to see any noticeable benefit, demand should also shape up. Purchases by the US retailers have been tempered by slowdown fears, warned Welspun India.