Textile demand is likely to get a boost in FY23 from the reduction in impact of COVID-19's third wave, as well as accelerated re-opening activities, says a report by India Ratings and Research (Ind-Ra).

According to the ratings agency, reduction in logistics issues for export demand will aid in keeping healthy demand.

Demand for all the textile sub-sectors in the domestic market continued to improve in from 2QFY22, after a slight dip in 1QFY22. This along with the supply chain issues has increased the realisations, the report adds.

Increased demand in 2HFY21 led to reduced opening stock for the new cotton season. The rise in prices of cotton has led spinners to accumulate the stock, it adds

Furthermore, it says, that demand for MMF (man-made fibre) has continued to increase, mainly due to the rise in cotton prices, leading to a shift of demand from cotton to MMF, to an extent.

In addition, the agency cites that textile exporters in the cotton yarn segment continued to witness an improvement during 7MFY22 with volumes exceeding 47 per cent YoY over FY21.

Ind-Ra expects export volumes to remain higher for FY22 over FY20 and FY21, on back of an increasing demand for Indian yarn. Fabric and apparel exports are also likely to sustain with the the opening up of economies and the adoption of 'China Plus One' strategy by importing countries, it adds.