India’s Jute Industry Set for Turnaround as Sales Volumes Seen Rising 15%, Margins Improve: Crisil Ratings
- IBEF
- September 22, 2026
India’s jute industry is expected to witness a meaningful recovery in FY27, with sales volumes projected to increase around 15%, according to a Crisil Ratings report. The recovery follows two challenging years marked by weak demand, elevated raw material costs and pressure on profitability. A revival in domestic demand, improving export prospects and softer raw jute prices are expected to support industry growth and profitability. Domestic demand is projected to increase around 20% in FY27, reversing a cumulative decline of a similar magnitude over the preceding two years. The earlier downturn was driven by a sharp increase in raw jute prices, which manufacturers passed on to customers, weakening demand and encouraging a shift towards lower-cost alternative packaging materials. With input costs moderating, lower product prices are expected to support demand recovery. Growth in downstream segments such as home textiles, lifestyle products and other value-added jute applications is also expected to support exports.
Raw jute accounts for around 60-65% of the industry’s operating expenses, making input costs a key factor for profitability. Better crop output has improved domestic availability and contributed to softer raw jute prices despite subdued imports. Crisil Ratings expects operating margins to expand by 130 basis points to nearly 9% in FY27, supported by lower fibre costs and improved capacity utilisation. The expected improvement in profitability, combined with limited debt-funded capital expenditure, is also expected to strengthen credit metrics and support manufacturers’ liquidity. Beyond the cyclical recovery, the industry could benefit from growing demand for sustainable materials, tighter regulations on single-use plastics and rising preference for biodegradable alternatives. Emerging applications in geotextiles, agro-textiles, home decor and industrial packaging are expanding the market for jute products. However, the pace of demand recovery, particularly in export markets, raw jute price movements, crop-related disruptions and changes in government policy support remain key factors for the industry’s performance.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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