The trade war between the US and China is now beginning to benefit Indian companies. One of them is Welspun India, the largest exporter of home textiles from the country.
US President Donald Trump's decision to increase import duties on Chinese imports of rugs last year; and now on bed sheets and towels, has increased trade queries for Welspun India.
"Yes, we are getting a lot more queries and visits from interested parties for our flooring portfolio," Welspun India Director & CFO Altaf Jiwani, told Moneycontrol.
The US government had increased duty tariff, to 25 percent from 10 percent, on flooring products from China.
The steep tariff increase helped Welspun India to attract interest from global companies, giving it a good reason to advance the opening of its new flooring facility in Telangana.
"Earlier, we were planning to commission it by December this year. We have now advanced it by two months," added Jiwani. The unit was originally planned just for the domestic market, but with the change in global trading equation, now the exports market look lucrative too.
The unit will make flooring solutions that broadloom carpets, carpet tiles, click & lock tiles, and artificial grass. These products were part of the $200 billion lists of the first US sanction.
Later, the Trump administration also increased duties on another set of Chinese products worth $300 billion. This list continues towels and bedsheets, two products in which Welspun India has leadership in the US markets.
While the duty on towels will be hiked to 24 percent from 9.1 percent, in bed sheets the increase is to 19.4 percent from 4.4 percent. The new rates are being implemented in two phases - first from September 1, and second from December.
Investment and turnover
The Telangana unit, work on which started last year, is being set up at an investment of Rs 1,100 crore.
Jiwani said the unit will generate revenues of Rs 150 crore this financial year. "Over the next four years, we are expecting the facility to generate over Rs 2,000 crore in revenues in a year."
The flooring segment is part of the new businesses that the company is focusing on. The other two are advanced textiles and retail. Over the four years, the company aims to generate Rs 4,000 crore in annual turnover from these three segments. While the flooring business will bring in Rs 2,000 crore, the other two will bring in Rs 1,000 crore each.
"At present, advanced textiles and retail generate Rs 200 crore each," Jiwani said.
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