- 15 Mar 2022
- ICICIdirect Research
RMG segment reports highest ever monthly export data in February
News: Textile exports continued their healthy growth momentum across categories in February 2022. Key positive was ready-made garment (RMG) exports surpassing Rs.12000+ crore mark for the first time. Exports for RMG garment grew 23% YoY to Rs.12002 crore (up 4% QoQ, two-year CAGR: 7%). Exports for cotton yarn and home textile dipped QoQ (down 8%) to Rs.9453 crore but continues to be significantly ahead of pre-Covid levels (two year CAGR: 26%).
Views: In the last three months, RMG segment has staged a strong recovery with consistent sequential growth of 38.3%, 4.1%, 4.2%, respectively in December, January and February. Subsequently, for April-February 2022, export for RMG has surpassed pre-Covid levels with growth of ~5% to Rs.106165 crore (US$14.3 billion) with trajectory accelerating in second half of FY22. Indian RMG exporters are well placed to capitalise on opportunities from shift in demand from China to other low cost Asian countries. Driven by significantly higher yarn prices and volume demand owing to US’s sanctions on China’s Xinjiang cotton, export market for cotton yarn and home textile continued to be healthy with two-year CAGR of 26% in April-February 2022 to Rs.103636 crore (US$13.9 billion). Overall India’s textile & apparel exports for April-February 2022 was at ~ US$37.3 billion (vs. US$34 billion in FY20). We expect textile exports to surpass US$40 billion mark for the first time in FY22.