India’s share in total home textile exports to the US fell by a percentage point in the first five months of this year. Market share losses began to subside with cotton sheets gaining a foothold from June. Improving US retail sales have raised the prospects of a recovery in performance of home textile exporters. US retail sales are expected to increase at a minimum of 4.5 per cent over 2017.

Higher wages, gains in disposable income, a strong job market and record-high household net worth have all set the stage for very robust growth in the nation’s consumer-driven economy.

After a turbulent time in fiscal ’18, the market is gradually improving. Large retailers in the US have reported their best quarterly performances in recent years. This has created hope that measures taken by traditional retailers to combat industry changes (such as a consumer shift to online retail) are beginning to yield results.

Volume recovery should also translate into earnings. Despite healthy volume growth, Indo Count Industries and Welspun India’s earnings remained weak as reduction in export incentives, high cotton costs and low realizations impacted performance. The depreciating rupee may provide some relief. But obtaining quality cotton at benchmark rates can be a challenge given the pest attacks and reduced crop acreage.