India’s Home-Textile Opportunity Beyond the U.S.
23 Sept 2026
How
the U.S. tariff shock reshaped sourcing and shipment patterns and why Europe
and the UK could become increasingly important to India’s next phase of export
growth
India’s home-textile industry has quietly
become one of the country’s important export-oriented textile businesses. Manufacturers
have built scale across bed linen, towels, bath and kitchen textiles, supported
by a strong cotton ecosystem and established manufacturing clusters. The
industry grew by around 8% between FY24 and FY25, reaching roughly INR 810B,
with around 70-75% of industry revenue coming from overseas markets. Growth
moderated in FY26 as the industry navigated a more uncertain global trade
environment, but its export orientation remained intact. Category-level exports
told an uneven story, curtains grew 45% year-on-year even as bed linen and
terry towels each declined by more than 20%, underscoring how unevenly the
slowdown was felt across the portfolio.
Today, roughly 55-60% of India's home-textile
exports are destined for the U.S., reflecting years of scale-building, customer
relationships and sourcing partnerships. That concentration has been an
important source of growth. But the tariff disruption of 2025 also highlighted
the value of having a broader export footprint.
Exhibit
1: World imports of home textile products
U.S. tariff changes exposed the importance of a
broader export base
Between
2024 and 2025, the tariff burden on Indian home-textile imports into the U.S.
rose sharply. A series of tariff changes between April and August added 50% to
the existing MFN duties, increasing the burden on Indian home-textile exports. The impact extended beyond the
headline tariff rate, influencing shipment timing, inventory decisions and the
sourcing equation across major supplier countries.
The impact of the tariff changes was visible
in U.S. import flows well before the full effect of the new duties could be
seen in trade data. For home textiles, where production and shipping can
involve long lead times, buyers had an incentive to bring forward before higher
duties took full effect. This created a temporary acceleration in trade flows,
followed by a correction as buyers adjusted orders and inventories to the new
tariff environment.
Exhibit
2: Month-on-month U.S. imports of home textiles from India
The tariff equation began to reset
The tariff environment changed materially
again in February 2026, when the U.S. Supreme Court’s ruling invalidated the
IEEPA-based tariffs, removing the additional tariff burden imposed under that
framework. A temporary 10% surcharge under Section 122 was subsequently applied,
while further country-wise tariff changes in July reshaped the relative
position of major suppliers.
For India, the additional country-wise rate has
been set at 10%, alongside Pakistan, 12.5% for Vietnam and 25%+12.5% for China,
providing India a material advantage over peer Asian economies. As a result, Indian
home-textile imports into the U.S. recovered from US$ 149M in February to US$ 182M
in March and US$ 200M in July, suggesting that trade flows began to stabilise
as the tariff regime moved away from the peak of the 2025 disruption.
The sourcing map is becoming more diversified
The tariff shock also prompted U.S. buyers to
look beyond their traditional sourcing bases. China, India and Pakistan
together accounted for around 83% of U.S. home-textile imports in April 2025;
by July 2026, their combined share had fallen to around 80%. India saw the
clearest decline among the major suppliers, with its share falling from around
29% to 23%, while Pakistan’s share also decreased.
Exhibit
3: U.S. imports of home textiles by major sourcing countries
However, India remains difficult to replace
at scale. Its manufacturing depth, integrated textile ecosystem, product
breadth and long-standing relationships with global retailers provide
structural advantages that newer sourcing markets cannot replicate quickly. But
the past 18 months also show that structural advantages do not automatically
translate into retained share. As buyers build greater flexibility into their
sourcing networks, India will need to continue strengthening the broader value
proposition it offers. The question is increasingly how Indian manufacturers
can deploy their existing capabilities across a broader set of markets.
Europe offers
scale, growth and room to gain share
Europe offers a
sizeable and growing market, but India’s presence remains relatively small. EU
home-textile imports grew from US$ 11B in 2024 to US$ 12.5B in 2025, a 13.6%
increase. India's exports to the region are rising at 17% from US$ 679M to US$ 797M.
Yet India accounted for only ~6% of EU home-textile imports in 2025, compared
with 24% for China and 23% for Pakistan.
That gap between
market growth and India’s current share is where the opportunity becomes more
tangible. Historically, access to European markets has been less favourable for
Indian exporters, with tariff barriers affecting the competitiveness of several
product categories. The India-EU FTA is expected to improve tariff access for
Indian textile and apparel exports, while the India-UK FTA, which entered into
force in July 2026, provides duty-free or reduced-tariff access for 99% of
Indian goods entering the UK.
For Indian
manufacturers, the combination of market scale, strong recent export growth and
improving trade access creates an opportunity to deepen their presence in
Europe and the UK.
The next step: Turning access into growth
Lower or
eliminated tariffs can strengthen price competitiveness but converting that
advantage into sustained business will require manufacturers to identify the
product categories where India can compete most effectively, build
relationships with the right customers and develop the certifications, local
presence and capabilities needed to win and retain orders.
India has already
demonstrated its ability to build a globally scaled home-textile business
through its presence in the U.S. market. Extending that capability to Europe
and other markets where demand is growing and market access is improving could
add a new dimension to the industry's growth story.
At Praxis, we see an opportunity to
help manufacturers make that translation, turning changing trade dynamics and new
market access into sharper choices on which markets and customer segments to prioritise,
and how to build the right go-to-market and market-access strategy.
In the next
edition, we’ll look at how the demand landscape for home textiles is changing.