Jefferies flags UK tariff reset, EU access as growth triggers for Indian textiles
Jefferies has initiated Raymond Lifestyle with a Buy and reiterated Buy on Welspun Living, citing near-zero UK tariffs, a potential EU pact from 2027, China+1 sourcing and supplier consolidation. It sees India targeting about $220 billion in preferential-access UK and EU textile markets.
What happened
Jefferies initiated Raymond Lifestyle and maintained Welspun Living at Buy, citing UK tariff cuts, a potential EU trade deal, China+1 sourcing and supplier
Key facts
- India textile and apparel exports: $37 billion in last financial year
- Global textile and apparel trade: $904 billion
- UK textile tariffs reduced from 4-12% to near zero
- Potential UK and EU preferential-access market: about $220 billion
- India home-textile supply share in US bed linen and towels: 45-60%
- India share in UK and EU home textiles: 5-25%
- India global apparel export share: 4-5%
- Welspun Living price target: Rs 260
- Welspun Living expected revenue CAGR: 14% for FY26-FY29
- Raymond Lifestyle price target: Rs 900
- Raymond Lifestyle expected EPS CAGR: 23% for FY26-FY29
Why this matters
Indian textile companies should prioritize UK/EU commercial partnerships, capacity and compliance investments, and selective consolidation to capture a share of the roughly $220 billion preferential-access market.
What to watch
- UK tariff schedule implementation and evidence of customer order conversion rather than only inquiries.
- Quarterly UK and Europe revenue growth, export order book, capacity utilization and management commentary on new customer wins.
- Progress, scope and ratification timeline of an India-EU trade agreement, especially textile rules of origin and tariff phase-outs.
- US and EU retailer inventory levels, consumer demand trends and sourcing allocations away from China.
- Cotton prices, INR movement, freight costs and export-margin trends.
- Capex announcements, new plant commissioning, compliance certifications and major multi-year buyer contracts.
- Expand UK-focused sales pipelines and pursue preferred-vendor status with large retailers seeking China+1 sourcing alternatives.
- Add or reallocate capacity toward higher-value, traceable and compliance-led product categories where supplier consolidation is strongest.
- Secure longer-term cotton, freight and foreign-exchange hedges to protect margins as export volumes rise.
- Increase certifications, supply-chain traceability and EU regulatory readiness ahead of a potential 2027 trade pact.
- Use improved export visibility to prioritize balance-sheet discipline and selective capex rather than broad-based capacity expansion.