Arvind To Welspun: Textile Industry's Growth Levers In Place, Outlook Upbeat: Systematix
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India’s garment exports ($17 billion) are lower than its peer countries like Vietnam ($35 billion), Bangladesh ($32 billion) and China ($175 billion) even as it accounts for ~27% of the global cotton capacity and has the world’s second-largest labour force along with significantly lower water costs.
This is attributable to the European Union's duty-free access to several countries (Vietnam, Bangladesh, Cambodia, Pakistan), while imports from India attract a ~10% duty and involve higher power costs & longer lead times.
Strong tailwinds should support India’s overall textile exports.
Arvind Ltd. plans to sweat its existing assets for the next 2-3 years for growth and hence, requires minimal capex.
Welspun India Ltd. is expanding its traditional business capacity after four years with capacity addition of 7% in towels (from Q1 FY21), 20% in bed linen and 50% in rugs (from H2 FY22).
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