Cotton Yarn Ind To See 9% Growth

New Delhi: -A rebound in exports and favourable domestic demand are expected to drive India's cotton yarn industry to a 7-9 per cent revenue growth in the current financial year, up from a modest 2-4 per cent growth in the previous financial year, according to a Crisil report released on Monday.

The uptick in volumes will primarily drive this growth, supported by modest increase in yarn prices, the report stated. Operating margins, after witnessing a recovery in the last financial year, are expected to see further uptick of 50-100 bps this fiscal, owing to stable cotton yarn spreads and better availability of cotton through Cotton Corporation of India (CCI).

The report is based on an analysis of 70 cotton yarn spinners, which account for 35-40 per cent of the industry revenue. The primary driver for the revenue uptick in fiscal 2026 will be the rebound in yarn exports to China. Exports account for around 30 per cent of the industry’s revenue, of which China accounts for 14 per cent.

In fiscal 2025, India’s yarn exports to China declined compared to prior fiscals on account of an exceptionally high cotton production in China. This resulted in a 5-7 per cent de-growth in India’s total cotton yarn exports. However, this is likely to reverse in the current fiscal with yarn exports seeing a 9-11 per cent growth as exports to China recover, driven by normalisation of their domestic cotton production, the report stated.