According to the Confederation of Indian Textiles Industry, India’s textile and clothing exports to the US were approximately US$11 billion (₹99,000 crore) in FY25. For India, the US is the largest export market for textiles and apparel, serving as a key driver of industry revenue. The US accounts for approximately 28-33% of India’s total textile and apparel exports.
However, it is the fourth-largest supplier of textiles and apparel to the US, accounting for around 9.4% of the total US import market. In fact, the US accounts for 59% of India’s carpet exports, 48% of India’s home textile exports, and 33% of India’s readymade garments exports. Thus, the 50% tariff imposed by the US on India threatened India’s competitive position.
Volumes remained slightly down, but pricing power and margins declined as exporters absorbed some of the tariff to retain clients. But now that India and the US have announced a trade deal to reduce tariffs to 18%, Indian companies will not only regain volume and margins, but are also expected to gain competitiveness.
India Favourably Placed Among Asian Emerging Markets
The Competitive Landscape: India vs. Peers
For example, Tariffs on Indian exports are now lower than those in Bangladesh and Vietnam (effective tariff rates of around 20%), Pakistan and Indonesia (19%), and even China (30-35%). This gap is expected to significantly benefit Indian companies. Furthermore, the EU-India Free Trade Agreement has opened another region with a high per-capita income. Once the FTA is in place by 2027, textile exports to the EU will be taxed at a NIL rate, compared to 12% today.
In this article, we will decode three textile companies with one of the highest exposures to the US market. How are they placed right now? Let’s take a look…
#1 Indo Count: The Premium Pivot to Brand Ownership
Indo Count Industries is a global leader in the home textiles industry, recognized as the world’s largest manufacturer of bed linen with an annual capacity of 153 million meters. The company’s operations are organized into three business segments: Bed Linen (core business, accounting for 85% of revenue), Utility Bedding, and Branded Business (a new business).
The 70% US Exposure
The US remains Indo Count’s largest export market, contributing nearly 70% of the company’s total revenues. It was navigating high volatility due to a 50% tariff imposed on Indian exports. However, it avoided major order cancellations, which weighed on the bottom line and margins. The company reported a 7% increase in volume.
In 1HFY26, total income rose by 3% year-on-year to ₹2,049 crore. However, the margin was affected because the company shared a portion of the tariff burden with customers to protect its market share. As a result, EBITDA margin fell by 420 bps to 11.8%, leading to a 51% decline in net profit to ₹78 crore.
1H FY26 Financials
Strategic De-risking
That said, the company has diversified its geographic footprint, with the non-US core business now accounting for 30% of overall revenue. Operating through brands Boutique Living (Premium) and Layers (Mass/Mid-market), the domestic business is growing via omnichannel strategies, including a presence in Shoppers Stop and more than 2,000 Multi-Brand Outlets.
Looking ahead, Indo Count has outlined a strategic roadmap to double its revenue by 2028, driven by new business verticals and capacity expansion.
The new business vertical is expected to report $275 million in revenue, comprising $175 million from Utility Bedding and $100 million from Branded Business. To this end, a new greenfield facility in North Carolina was expected to be fully operational by January 2026. This facility alone is expected to generate annual revenues of $85- 90 million.
The Premium Pivot
Indo Count is pivoting from contract manufacturing to high-margin brand ownership. The acquisition of the heritage brand Wamsutta is central to this premiumization strategy. Launched as a D2C brand in July 2025, it has already recorded sales in all 50 US states within 45 days.
The Company recently signed a licensing agreement with Tommy Hilfiger for the utility bedding segment, adding to a portfolio that already includes licensed brands like Fieldcrest, Waverly, and Gaiam. In the domestic market, the company added 700 new retail counters in Q2 FY26, indicating strong growth opportunities and increased retail wallet share.
#2 Welspun Living: Vertically Integrated Resilience
Welspun conducts its business primarily through a vertically integrated “Farm-to-Shelf” model. It is a global leader in home textiles and has diversified into flooring and advanced textiles. Home Textiles accounted for 94% of the turnover. Welspun is the leading supplier of terry towels and bed sheets to the US, holding a dominant market share.
The 61% Revenue Reliance on the US
The US is the largest market for Welspun Living, contributing 61% of the company’s export revenue. Welspun Living has maintained its position as the #1 Home Textile supplier to the US for five out of the last six years. The company’s strong foothold in the US helped it surpass the $1 billion (₹9,000 crore) revenue mark for the fourth consecutive year in FY25.
Welspun’s business is vertically integrated, controlling the entire value chain from sourcing raw materials to retail distribution. The company operates manufacturing facilities in India (Anjar, Vapi, Hyderabad) and a pillow manufacturing facility in Ohio, US. Its presence in the US afforded it some protection against tariffs.
However, despite that, the company faced challenges in both top-line and bottom-line performance. In 1HFY26, revenue declined 13% year-on-year to ₹4,702 crore. Operating profit fell a further 46% to ₹378 crore, while margins contracted 490 bps to 8%. Consequently, net profit fell 73.2% to ₹104 crore. Welspun could now regain its growth.
That said, Welspun maintains distribution centers on the US East and West Coasts, as well as in the UK, Europe, and the Middle East. This network supports just-in-time delivery and rapid order fulfillment. The company sources cotton heavily during the cotton season (80-85% of annual requirement) to mitigate price volatility.
The 2-3X Growth Potential from UK-India FTA
The company is actively focusing on markets outside the US, including the UK, EU, GCC, ANZ, and Japan. The revenue share from markets outside the US has increased to 39%. The India-UK FTA is expected to provide a strong impetus, as tariff barriers on home textiles are eliminated (down from 12%), positioning Indian exports to scale significantly. With Welspun already the #1 exporter of towels to the UK from India, it sees 2-3X growth potential with the FTA.
The Road to ₹15,000 crore Revenue
A major focus is scaling onshore manufacturing in the US, specifically through the pillow category. The Ohio facility has an annual capacity of 13.5 million pieces. A new investment in Nevada will add 10.8 million pieces, with operations expected by Q4 FY26. Overall, it has set a medium-term revenue target of ₹15,000 crore with 15-16% margins.
#3 Gokaldas Exports: Navigating Global Footprints and Footwear Trends
Gokaldas Exports operates as a fully integrated manufacturer with a significant global footprint and large-scale production capabilities. While marketing and corporate functions are located in India, the UAE, and the US, manufacturing operations are spread across India, Kenya, and Ethiopia.
Global Manufacturing Footprint
Gokaldas is a manufacturer of complex value-added garments and produces a diverse range of apparel products for all seasons. The company describes its clients as eminent global fashion brands and retailers operating in more than 50 countries. The US currently contributes approximately 70% of the company’s total revenue.
Targeting a 20% Revenue Contribution from the UK and European Markets.
Despite the trade headwinds, the company maintained its volume share. This rebalancing is intended to be achieved by accelerating growth in other geographies, particularly the UK and Europe. The company aims to increase the revenue contribution from the U.K. and Europe from the current 13-14% to nearly 20% in the foreseeable future.
Post-tariff, to prevent the loss of business to competing nations with lower tariffs (such as Vietnam and Bangladesh), Gokaldas entered into burden-sharing partnerships with key US clients. It also agreed to absorb up to 15% of the tariff impact, to sacrifice short-term margins.
Operational Resilience Despite Headwinds
Gokaldas’s revenue declined 5% year-on-year to ₹1,980 crore in 1HFY26, aided by 16% growth in India operations. Despite a challenging macroeconomic environment and the imposition of punitive tariffs by the U.S., the company improved its operational efficiency.
EBITDA increased by 23% to ₹202 crore, while margins expanded by 145 bps to 10.2%. This was driven by productivity gains and cost management efforts. While operating profits grew, the net profit was impacted by aggressive investment in capacity expansion and modernization. Net profit declined by 10% to ₹50 crore.
The Road to Margin Recovery
With the US business now in a more competitive position, Gokaldas is expected to gradually regain momentum. Management anticipates that revenue in the second half of the fiscal year (H2) will exceed that in the first half (H1). This growth is supported by a strong order book visibility for both India and Africa operations in the quarters ahead.
The company previously, during the Q2 concall stated that it will return to margin growth from Q4 onwards. Moreover, if tariffs normalize to approximately 20% by FY27, the company projects margins exceeding 12%. With capacity utilization at 90-95%, the company sees the potential to achieve a consolidated top-line revenue of approximately ₹4,500 crore.
The Premium Paradox
Return ratios, including the Return on Capital Employed (ROCE) and Return on Equity (ROE), are moderate across all three companies. However, valuations remain at a premium to both the historical median and the industry. That said, while recent margins were pressured as companies absorbed part of the tariff shock, the easing of duties restores both volume visibility and pricing power.
| Peer Comparison (X) | ||||||
| Company | US Exposure (%) | P/E | 5Y Median P/E | Industry P/E | ROCE (%) | ROE (%) |
| Indo Count | 70 | 36.8 | 16.0 | 19.3 | 13.5 | 11.3 |
| Welspun | 61 | 38.6 | 19.9 | 19.3 | 14.4 | 13.7 |
| Gokaldas | 70 | 50.7 | 30.1 | 27.5 | 10.6 | 8.2 |
| Source: Screener.in (As of 5 February, 2026) | ||||||
Indo Count, Welspun, and Gokaldas enter this phase with diversified capacities, strong U.S. exposure, and expansion plans already in motion, positioning them to participate meaningfully in the next leg of export-led growth, even as valuations remain elevated.
Disclaimer:
Note: Throughout this article, we have relied on data from http://www.Screener.in and the company’s investor presentation. Only in cases where the data were unavailable have we used an alternative, widely used, and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities, or other related investments of issuers and/or companies discussed therein. The articles’ content and data interpretation are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources, and only after consulting such independent advisors as may be necessary.