- 08 Jun 2022
- ICICIdirect Research
DECLINING IMPORTS BY US MAY IMPACT ORDERBOOK OF INDIAN TEXTILE COMPANIES
News: As per media reports, inbound container index to US has dropped by 36% since May 24, 2022 as major global retailers are saddled with inventory and are reducing imports and contemplating inventory markdowns and cancellations of orders given to vendors
Views: Lower imports from US retailers can negatively impact the volume and revenue performance of Indian textile companies as US is a key market for Indian textile companies . Many retailers have excess inventory owing to lower than expected demand and are looking at inventory markdowns and cancellations of orders given to vendors. Soft demand scenario and excess channel inventory can negatively impact the order book of Indian textile players , particularly apparel’s and home textiles in the near term. From a long term perspective we remain structurally positive on Indian textile exporters owing to China +1 strategy of global retailers and proposed FTA’s with Europe and UK and the recent FTA signed with Australia and UAE, which would enable market share gains for India in textile exports
Impact: Negative