Textile stocks such as Kitex Garments, Arvind, and Siyaram Silk Mills surged as much as 5-10% on the National Stock Exchange on Monday after reports indicated that India’s decision to ban Bangladesh imports through land ports could open about Rs 1,000 crore of opportunity for the domestic textile sector.
Shares of Kitex Garments were locked in the 5% upper circuit at Rs 289.88 per shares on the NSE. Siyaram, on the other hand, rose 10% on the exchange to its intra-day high of Rs 798.
On Saturday, the Directorate General of Foreign Trade issued a notification banning the import of garments and several other products from Bangladesh through land routes, while permitting shipments via Kolkata and Nhava Sheva ports. The domestic industry had been asking for such restrictions due to the surge in textile imports from the neighbouring country. Indian firms sourced woven and knitted apparel, leveraging the zero-duty benefit. This will also curb the indirect import of Chinese textiles, which otherwise attracts a 20% import duty.
In addition to this, the recently agreed India-UK FTA is expected to drive a significant growth in trade volumes and hence earnings of the textile firms, ICRA said in a report. The FTA is expected to boost manufacturing, open export opportunities for the Indian textiles sector as under the agreement, tariffs on almost 99% of Indian textile and apparel exports are eliminated.
India's apparel and home textiles trade with the UK is expected to double from its current levels in the next 5-6 years. India-originated textiles accounted for 6.6% of UK’s total textile imports in 2024, according to the report. This will also give an edge to the Indian textile firms, whose share in the UK has largely remained stagnant in the past few years. Earlier, Bangladesh’s share in the UK’s apparel and home textile imports has increased significantly post Brexit, ICRA said.
The ratings agency expects India's textile exports to the UK to grow by a compound annual growth rate of 13% over the next five years. Share of Indian textile in the total textile imports by the UK is expected to reach 11-13% from the current 7-8% in the next 5-6 years.
