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Although domestic cotton prices remain higher than international prices, the overall demand scenario seems to be improving according to a report by Systematix Institutional Equities Research.
It can recover spread in the coming quarters to support the profitability and operational efficiency of Indian textile companies.
The report says the demand outlook remains strong for the Indian textile sector because of the normalizing channel inventories at the global retailer level, likely tariff hike by the US on China, rising labour costs in Vietnam, and ongoing political instability in Bangladesh.
The report however raised concern about the capacity constraints of the Indian garment manufacturers, which could limit their ability to take full advantage of the expected surge in demand.
It however noted that driven by stable cotton prices, favourable forex rates, and continued focus on operational efficiency the profitability of Indian manufacturers will improve in the coming quarters.
Indian textile companies recorded healthy (YoY) performance with revenue grown by 11 per cent EBITDA growth of 11 per cent and profit after tax (PAT) growth of 28 per cent on an YoY basis. The subdued cotton prices which were down 10 per cent (YoY) and stable yarn prices aided gross margin expansion for spinners.
The Union Budget 2025-26 also focuses on strengthening the textile sector through cotton productivity initiatives, duty restructuring on fabric, and supporting domestic manufactu ..
Earlier the Government had increased allocation for the textiles sector to Rs 52.7 bn from Rs 44.2 bn in Budget 2024-25.
The government’s focus on the Productivity Linked Incentive (PLI) scheme, manmade fibre, 5-year mission to facilitate productivity improvements, sustainability of cotton farming and the technical textile (TT) market will boost the growth of the Indian textile sector.
An increase in customs duty in the union budget 2025-26 on the import of fabrics will be advantageous to India’s technical textile producers.
The Cotton Association of India (CAI) has lowered the cotton production forecast for the 2024-25 season (October-September) by 7.8 per cent (YoY) to 30.17 million bales (170kg per bale) in its January 2025 report from 30.4 million bales in its December 2024 report.
Domestic consumption may stay unchanged at 31.5mn bales in the current season (2024-25). CAI expects a closing stock of 2.59 million bales at the end of the season vs. 3.02 million bales in the last season. However contrary to this, the ICAR-Central Institute of Cotton Research (CICR) forecasts production at 32.0 million bales.
This figure exceeds earlier estimates ranging between 29.9 million bales and 30.4 million bales.
International cotton prices however have steadily declined and currently hover at USD 0.67- 0.68 per pound vs. USD 0.70 in 2QFY25.
Indian cotton prices have slightly firmed to Rs 54,000-55,000/candy (USD 0.80 per pound) from Rs 52,000- 53,000/candy in 2Q and continue to quote at a premium to international prices.
With a likely reasonable cotton crop, the prices are likely to remain at the lower end of the above range, ensuring predictable input costs in future. (ANI)
India’s textile exports have reached Rs 3 lakh crore and the goal is to triple this to Rs 9 lakh crore by 2030 by strengthening domestic manufacturing and expanding global reach, the government has said.
India is the sixth-largest exporter of textiles globally, contributing 8.21 per cent to the country’s total exports in 2023-24.
The sector holds a 4.5 per cent share in global trade, with the United States and European Union accounting for 47 per cent of India’s textile and apparel exports, according to the Ministry of Textiles.
The recently concluded ‘Bharat Tex 2025’ in the national capital served as a platform to accelerate the government’s “Farm to Fibre, Fabric, Fashion, and Foreign Markets” vision. The event demonstrated India’s leadership in the textile sector and its commitment to innovation, sustainability, and global collaboration.
Organised from February 14 -17, the event spanned 2.2 million square feet and featured over 5,000 exhibitors, providing a comprehensive showcase of India’s textile ecosystem.
More than 1,20,000 trade visitors, from 120+ countries including global CEOs, policymakers, and industry leaders, attended the event, according to the ministry.
“From an employment perspective, the textile industry provides direct employment to over 45 million people and supports the livelihoods of over 100 million individuals indirectly, including a large proportion of women and rural workers,” said the government.
The government’s focus on increasing textile manufacturing, modernising infrastructure, fostering innovation, and upgrading technology has strengthened India’s position as a global textile hub.
India is one of the world’s largest producers and exporters of fabrics, catering to both domestic and international markets.
The sector is characterised by a mix of large-scale industrial manufacturing and small-scale artisanal production, reflecting a vibrant tapestry of innovation and tradition.
Major fabric hubs in the country include Gujarat, Tamil Nadu, Punjab, and West Bengal, each known for its unique textile specialties.
The apparel and fashion industry is a major economic driver, contributing significantly to GDP and employment.
High-frequency indicators point towards a sequential pick-up in the momentum of economic activity during the second half of 2024-25, which is likely to sustain moving forward, RBI said on Wednesday in its monthly bulletin.
The monthly bulletin noted that the Union Budget 2025-26 prudently balances fiscal consolidation and growth objectives by continued focus on capex alongside measures to boost household incomes and consumption.
Retail inflation moderated to a five-month low in January, mainly due to a sharp decline in vegetable prices.
The Union Budget 2025-26 has placed thrust on boosting consumption while maintaining the quality of expenditure, with effective capital expenditure/ GDP ratio budgeted to improve to 4.3 per cent in 2025-26 from 4.1 per cent in 2024-25 (RE).
The RBI bulletin noted that the uncertainty surrounding global trade and geopolitical landscape, have had a bearing on domestic equity markets.
The benchmark and broader markets declined on account of selling pressures from foreign portfolio investors (FPIs) as sentiments remained weak. The Indian rupee has depreciated in line with other emerging economies, weighed down by the strength of US dollar.
“Strong macroeconomic fundamentals, along with improvements in various measures of external sector vulnerability, have helped India tide over the ongoing wave of global uncertainty,” RBI said.
Headline CPI inflation moderated to a five-month low of 4.3 per cent in January 2025 as food prices, especially those of vegetables recorded a sharp decline driven by the arrival of winter crops in the market.
In the bimonthly monetary policy meeting of February 2025, the Monetary Policy Committee (MPC) of the Reserve Bank reduced the policy repo rate by 25 bps to 6.25 per cent as growth-inflation dynamics opened up policy space to support growth while remaining focussed on aligning inflation with the target.
The MPC noted that excessive volatility in global financial markets and continued uncertainties about global trade policies, coupled with adverse weather events, pose risks to the growth and inflation outlook. Accordingly, the MPC voted to continue with a neutral stance, which provides the flexibility to respond to evolving macroeconomic conditions.
In the Union Budget for 2025-26 presented on February 1, the central government has announced that no income tax will be payable on income up to ?12 lakh, providing significant relief to taxpayers, especially the middle class. Earlier, this limit was ?7 lakh.
The government expects that taxpayers saving money through lesser income tax will plough back into the economy in the form of either consumption, savings or investments. (ANI)
ICE cotton futures rose to a three-week high yesterday as supply concerns supported the natural fibre. Severe weather conditions in the US cotton-growing regions have delayed harvesting. US cotton remains near a two-month low, while a weaker dollar has made cotton purchases more affordable for overseas buyers.
Yesterday, the ICE cotton May 2025 contract settled at 68.82 cents per pound (0.453 kg), up by 0.51 cents. The contract touched a high of 69.25 cents, the highest since 24 January. May, March, and July contracts posted their fifth higher close in the last six sessions. The May contract has gained 200 points over the past six sessions.
The falling dollar has also supported cotton prices. It is hovering near a two-month low, making US cotton more attractive to international buyers. Analysts suggest that a weak dollar will continue to support cotton prices.
Trading volume was 84,719 contracts, indicating strong market participation. On 14 February, 58,603 contracts were cleared. The CFTC report showed that speculators reduced their net short positions in ICE cotton futures and options by 4,232 contracts, bringing the total net short position to 64,014 contracts as of 11 February. ICE data shows that as of 14 February, the deliverable stock of ICE No. 2 cotton futures remained unchanged at 218 bales.
Severe weather in the US has delayed cotton harvesting, raising supply concerns. According to the National Cotton Council’s 44th Annual Early Season Planting Intentions Survey, US cotton acreage is expected to decline by 14.5 per cent in 2025, with total planting intentions at 9.6 million acres. Upland cotton acreage is estimated at 9.4 million acres, representing a 14.4 per cent decrease. Meanwhile, long-staple cotton acreage is projected at 158,000 acres, 23.5 per cent lower than last year. These figures were released at the 2025 National Cotton Council Annual Meeting on 16 February.
The broader financial markets saw the S&P 500 break its previous record closing high amid earnings season. Market sentiment is also influenced by the upcoming Federal Reserve meeting minutes and rising geopolitical tensions. This week’s US trading is shortened due to a holiday.
Currently, ICE cotton for May 2025 is trading at 68.58 cents per pound (down 0.24 cents). Cash cotton is trading at 66.82 cents (up 0.51 cents), the March 2024 contract at 67.25 cents per pound (down 0.26 cents), the July 2025 contract at 69.51 cents (down 0.18 cents), the October 2025 contract at 70.17 cents (down 0.02 cents), and the December 2025 contract at 69.72 cents (down 0.15 cents). Some contracts remain at the last closing level, with no trading recorded today.
Kasturi Cotton made a significant impact at Bharat Tex 2025 with a prominent booth and kiosk that garnered attention from industry leaders. The Hon’ble Prime Minister, Shri Narendra Modi during his visit engaged in discussions about the program’s progress with Shri Vijay Agarwal, Chairman of TEXPROCIL, Shri Lalit Gupta, CMD of CCI, and Dhirubhai Knaetiya, Director of Maruti Texprocess (Ginner), and Dinakaran Sambandam, Joint MD of Sambandan Spinning Mills (Spinner).
“Kasturi Cotton’s remarkable presence at Bharat Tex 2025 is a testament to the growing recognition of Indian cotton on the global stage. The industry’s enthusiasm and the strategic partnerships we’ve forged highlight the immense potential of this program in shaping the future of our textile industry” said Shri Vijay Agarwal, Chairman, TEXPROCIL.
A Masterclass on Kasturi Cotton, led by Shri Sunil Patwari, Immediate Past Chairman of TEXPROCIL, and Dr. P.K. Mandhayan, attracted tremendous interest from visitors, highlighting the program’s growing influence. A key milestone was the signing of an MoU with Alok Industries Ltd and Indo Count to promote Kasturi Cotton on a global scale.
For the first time CITI-TEXPROCIL Leading Ginners’ Award was presented to encourage active participation in the Kasturi Cotton program, which has gained widespread industry acceptance. Numerous brands showcased products made exclusively from Kasturi Cotton at the event.
Overall, Kasturi Cotton’s presence at Bharat Tex 2025 marks a major step forward in establishing a globally recognized Indian cotton brand, strengthening the Indian textiles industry. Gratitude is extended to all stakeholders who supported this vision.
India’s new projects which are supported by a Rs855m ($9m) EU grant, are designed to promote inclusive growth, resource efficiency, and sustainability within India’s textile industry, while also enhancing livelihoods and empowering women economically.
The collaborative ventures will unfold across nine Indian states, namely Assam, Andhra Pradesh, Telangana, Uttarakhand, Uttar Pradesh, Odisha, Jharkhand, Bihar, and Haryana.
The initiatives will focus on a variety of products including natural dyes, bamboo crafts, handlooms, shawls, traditional handicrafts and textiles with plans to improve production processes, branding strategies, and market access.
The central objectives of all the projects are to enhance income opportunities for women and encourage collaboration between artists, producers, civil society organisations (CSOs), government institutions, and market stakeholders.
Each project will integrate environmental considerations by minimising negative impacts on nature while promoting circularity and resource efficiency.
It is hoped that 35,000 individuals will directly benefit from the projects over the next three to five years.
This includes support for 15,000 micro, small and medium enterprises (MSMEs), 5,000 artisans, and 15,000 farmer-producers.
The projects are expected to improve the economy of local communities and industries, particularly empowering approximately 200,000 women.
The Indian textile and apparel sector employs over 45m people — 60% of whom are women — and faces challenges such as emissions, energy consumption, water usage, and low recycling levels.
This collaboration continues the EU’s partnership with India on sustainability and circular economy principles and supports the Ministry of Textiles’ “Sustainable Bharat Mission for Textiles.”
The funding is part of the EU’s Global Gateway Strategy and complements the EU-India Resource Efficiency Circular Economy initiative.
This initiative is co-funded by Germany’s Federal Ministry (BMUV), executed in tandem with India’s Ministry of Environment, Forest, and Climate Change, and implemented by GIZ.
The projects will be executed through collaborations between government agencies and private sector partners. They are crafted to preserve India’s cultural heritage in textiles while fostering economic self-reliance through innovation, competitiveness, and improved market linkages.
A Textiles’ Toolkit has also launched to encourage Circular Economy and Resource Efficiency in the sector and it was developed in partnership with GIZ.
The EU delegation to India cooperation head and minister counsellor Franck Viault said: “While fast fashion dominates global trends, both the EU and India have been making serious effort to make the textile industry more sustainable. India’s rich textile heritage is internationally acclaimed, particularly in Europe.
“By merging tradition with innovation and technology, India’s textile sector can leapfrog into a sustainable future. As a key partner, the EU is committed to supporting India’s circular economy agenda, sharing best practices, and promoting environmentally sustainable practices in this vital sector.”
The seven projects will be managed by various organisations including Humana People to People India, Deutsche Welthungerhilfe EV, Stiftelsen Varldsnaturfonden WWF, Professional Assistance for Development Action, Network for Enterprise Enhancement and Development Support, Foundation for MSME Clusters, and Intellecap Advisory Services.
Indian textile minister Piyush Goyal recently urged Indian industry leaders to set ambitious targets as the economy is poised for a sustained spell of rapid growth. Addressing the 5th meeting of the Confederation of Indian Industry (CII) national council in New Delhi, he said there is huge scope to expand labour-intensive plastics, footwear and textiles industries.
Goyal is also in charge of commerce and industry, consumer affairs, and food & public distribution portfolios.
He encouraged the industry to have a greater risk appetite, invest in labour-intensive industries that may be less profitable at the beginning, but generate lakhs of jobs, and promote tribal handicraft products as part of corporate social responsibility activities.
Stressing that the country is going through a sharp and strong revival, the minister said rising economic indicators indicate India is shaping up for a growth decade, according to an official release.
The textiles ministry Thursday amended hank yarn packaging norms whereby yarn packed for civil consumption in each quarter commencing from January-March should be less than 30 per cent of total yarn packed in each quarterly period for civil consumption.
The move is expected to benefit spinning industry.
Previously, this proportion was 40 per cent of the total yarn packed.
“This notification will come into effect from January 1, 2019,” an official statement said.
“However, not less than 80 per cent of the yarn required to be packed in hank form shall be of counts 80s and below,” it added.
In the textile industry, a hank is a coiled or wrapped unit of yarn or twine.
In the post-GST implementation period, the exports of garment and made-ups have been struggling due to inadequate export benefits and tariff barriers in the global market. The industry Associations and export promotion councils have been pleading the government to refund the blocked and embedded taxes so as to enable the industry to remain competitive and mitigate the challenge of trade barriers to a certain extent. The Union Cabinet chaired by the Hon’ble Prime Minister, Shri Narendra Modi on 7th March 2019 has approved the Scheme to rebate the State and Central Embedded Taxes to support the textile sector and boost exports.
In a Press Release issued here today, Mr.P.Nataraj, Chairman of The Southern India Mills’ Association (SIMA) has stated that the proposed rates of RoSL has come at a right time and felt that it would benefit the garmenting and made-ups segments. He has added that this would also increase the demand from the downstream sector and thereby strengthen the entire cotton textiles value chain.
SIMA chief has pointed out that the industry has also been pleading to include spun yarn and fabrics under the RoSL benefit for the last two years. He has said that the Government should have considered the spinning and weaving / knitting segments as these segments suffer with surplus production capacity for the last few years. He has further said that the envisaged demand would not meet the excess supply from the spinning and weaving segments. He has appealed to the Government to consider the genuine demand of the industry and include spun yarn and fabrics under RoSL and enable these segments to revive from the financial stress being faced during the last three years.
SIMA Chairman has thanked the Hon’ble Union Textile Minister for considering the long pending demand of the spinning sector and reducing the hank yarn obligation from 40% to 30% with effect from 1st January 2019 to enable Ease of Doing Business. Mr.Nataraj has stated that when the hank yarn obligation was reduced from 50% to 40% during 2003, the obligatory quantity was around 930 million kgs and the same had increased over 1600 million kgs during 2018. On the other hand, the number of handlooms were 31.37 lakhs during 1997-98 and the same got reduced to 21.46 lakhs during 2009-10 handloom census. He has said that the proportionate reduction in obligation works out to less than 15% and therefore, there is a room to reduce the obligation further by 10%. Mr.Nataraj has stated that as per the Handlooms Census 2009-10, the actual hank yarn requirement works out to less than 10%.
The proposed rates of Rebate on State Levies (RoSL) has come at a right time, which would benefit the garmenting and made-ups segments, Southern India Mill’ Association (SIMA) said Thursday.
This would also increase the demand from the downstream sector, thereby strengthening the entire cotton textiles value chain, SIMA Chairman, P Nataraj said here.
In a statement, he said the industry has also been pleading to include spun yarn and fabrics under RoSL benefit for the last two years and the Government should have considered the spinning and weaving / knitting segments as these segments suffer with surplus production capacity for the last few years.
The envisaged demand would not meet the excess supply from the spinning and weaving segments, Nataraj said and appealed to consider the genuine demand of the industry to include spun yarn and fabrics under RoSL.
Thanking Union Textile Minister, Smriti Irani for considering the long pending demand of the spinning sector and reducing the hank yarn obligation from 40 to 30 per cent with effect from January 2019 to enable ease of doing business.
He said that when the hank yarn obligation was reduced from 50 to 40 per cent during 2003, the obligatory quantity was around 930 million kgs and the same had increased over 1,600 million kgs during 2018.
On the other hand, the number of handlooms were 31.37 lakhs during 1997-98, which got reduced to 21.46 lakhs during 2009-10, he said.
The proportionate reduction in obligation works out to less than 15 per cent and therefore, there is a room to reduce the obligation further by 10 per cent, since as per the Handlooms Census 2009-10, the actual hank yarn requirement works out to less than 10 per cent, Nataraj said.
The Union Cabinet chaired by the Prime Minister, Narendra Modi today has approved the Scheme to rebate the State and Central Embedded Taxes to support the textile sector and boost exports.
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