New Delhi [India], September 13 (ANI): Home textile manufacturers are bracing for a 5-10 per cent decline in revenue, apart from reduction in operating profitability, as the 50 per cent tariffs imposed by the US came into effect on August 27, Crisil Ratings said in a report.

Exports of home textiles account for about three quarters of the industry's revenue.

The report noted that three key factors could help cushion the impact: strong frontloading of sales between April and August 2025; limited export capacity in competing countries like China, Pakistan, and Turkey--especially in product categories where India benefits from lower tariffs; and the expected shift of Indian manufacturers towards alternative global markets.

Additionally, deleveraged balance sheets will partly offset the impact on credit profiles.

Manish Gupta, Deputy Chief Rating Officer, Crisil Ratings, said, 'Home textiles are discretionary products and their exports to the US grew a modest 2-3 per cent in the first quarter of this fiscal as retailers remained cautious of demand amid inflationary concerns. But prior to the implementation of higher tariffs from August 27, exports had spiked because of some frontloading of orders.'

'Additionally, with competing countries having limited capacity to make cotton-based home textile products, India should be able to maintain its competitive position in the US market over the near term. That should limit the overall revenue decline for the industry to 5-10 per cent this fiscal,' Gupta added.

The report added that the impact is expected to be more pronounced for companies that generate more than half of their revenue from the US. To offset the lower offtake in the US, Indian manufacturers would try to increase trade with the European Union (EU) and the United Kingdom (UK), the Crisil rating added in the report. These geographies together accounted for 13 per cent of India's home textile exports last fiscal.

Domestic exporters are expected to sharpen focus on the UK, where the gates have opened after the recent free trade agreement, and the EU, the report added.

Gautam Shahi, Director, Crisil Ratings, said, 'Scaling up of revenue from the alternative export destinations will take time. Meanwhile, operating profitability on exports to the US over the remainder of this fiscal may decline sharply. This will be a result of the Indian exporters absorbing part of the higher tariffs and some expected reduction in demand from the US due to inflation. The potential oversupply may also affect the profitability of exports to other destinations as well as in the domestic market. Consequently, operating profitability at the industry level could fall 200-250 bps this fiscal from last fiscal.' (ANI)