India Apparel Market Outlook to 2028

India Apparel Market Overview

The India apparel market is valued at  USD 105 billion, primarily driven by rising consumer spending, urbanization, and the expansion of organized retail and e-commerce platforms. The surge in disposable income and a growing preference for branded apparel across urban and rural regions also contribute to the market's growth. Additionally, a focus on fashion and the adoption of Western trends are further bolstering demand across various segments, making India one of the fastest-growing apparel markets globally.

Major demand centers in India include metropolitan cities like Mumbai, Delhi, and Bangalore, which lead the market due to high consumer spending, urban lifestyles, and the presence of major retail outlets. Tier II and Tier III cities also play an increasing role as disposable incomes rise and consumers in these areas demand branded and quality apparel. This growth in semi-urban regions is driven by changing consumer preferences and enhanced brand penetration through online and offline retail expansions.

The Government of India launched the Production Linked Incentive (PLI) scheme in 2022, which has allocated INR 10,683 crore to boost domestic textile manufacturing. This initiative has directly benefited the apparel sector by encouraging local production and reducing reliance on imports. These policies have helped create jobs and support small and medium-sized enterprises, ultimately strengthening India's position as a textile and apparel hub.

India Apparel Market Segmentation

By Product Type: The market is segmented by product type into menswear, womenswear, kidswear, sportswear, and ethnic wear. Recently, womenswear has emerged as the dominant sub-segment within this segmentation. Its dominance is attributed to the increasing number of women in the workforce, evolving fashion trends, and a greater inclination toward branded and premium products. Brands are investing significantly in marketing and product diversification, catering to the growing demand among women for both workwear and casual attire, solidifying womenswear's market leadership.

By Distribution Channel: The market is segmented by distribution channel into online retail and offline retail (department stores, specialty stores, hypermarkets/supermarkets, and exclusive brand outlets). Online retail holds a prominent market share, fueled by the convenience of digital shopping, a wide range of product offerings, and the competitive pricing provided by e-commerce platforms. The COVID-19 pandemic accelerated the adoption of online channels, making them a crucial part of the distribution network. The availability of various fashion brands online, often at competitive prices, is a key driver of growth in this segment.

India Apparel Market Competitive Landscape

The India apparel market is characterized by a competitive landscape dominated by both domestic and international brands. Key players leverage their robust distribution networks, strong brand presence, and continuous innovation to maintain market dominance.

India Apparel Market Analysis

Growth Drivers

Rising Disposable Income: India's disposable income has indeed seen significant growth in recent years. In 2023, the total disposable personal income in India increased to around INR 296,383 million from about INR 273,364 million in 2022, marking a substantial rise, as per Ministry of Statistics and Programme Implementation data. This rise has boosted purchasing power, contributing to a notable shift in apparel spending patterns. Specifically, consumers in urban regions allocated around INR 10,500 per annum toward clothing purchases in 2023, showcasing a clear growth in demand for fashion products. The increase in disposable income has also enabled brands to introduce more premium products into the market, appealing to a broader customer base.

Urbanization and Lifestyle Changes: India's urban population reached around 481 million in 2023, with urban centers experiencing significant migration from rural areas, according to the Ministry of Housing and Urban Affairs. This shift has spurred a rising demand for contemporary and functional apparel that suits an urban lifestyle. Additionally, data reveals that urban consumers spend an average of INR 1,200 monthly on clothing and accessories, highlighting the impact of urbanization on the apparel market. This trend encourages brands to introduce more versatile clothing options that appeal to urban lifestyles.

Expansion of E-commerce Platforms: In 2023, India's e-commerce apparel market recorded a transaction volume increase of 18 million orders compared to 2022, facilitated by improved digital payment options and robust internet penetration. The Digital India program has played a pivotal role in driving online retail growth, with more than 880 million internet users as of 2023. E-commerce platforms such as Flipkart and Amazon have expanded their reach to Tier II and III cities, broadening accessibility to fashion products and driving a rise in apparel purchases through online channels.

Challenges

Intense Market Competition: The Indian apparel market hosts a large number of domestic and international players. This dense competition has placed significant pressure on pricing strategies, particularly as foreign brands enter the market and compete with well-established domestic labels. Companies are facing the challenge of maintaining customer loyalty and differentiating themselves amidst a crowded marketplace. To thrive, businesses must innovate and create unique selling propositions to stand out.

Raw Material Price Volatility: Cotton prices in India have fluctuated recently due to varying crop yields and international market demand, as reported by the Ministry of Agriculture & Farmers' Welfare. These raw material price changes impact production costs for apparel manufacturers, who may face challenges in maintaining profit margins while offering competitive prices. The industrys reliance on cotton as a primary input makes it particularly vulnerable to price instability. Exploring alternative materials and supply chain strategies could help mitigate these risks.

India Apparel Market Future Outlook

The India apparel market is poised for robust growth, with anticipated expansion driven by increased consumer spending, the growing influence of Western fashion, and technological advancements in production. The rise of sustainable and eco-friendly apparel options, alongside the continued penetration of online platforms, is expected to drive further growth, enhancing accessibility and consumer reach across the country.

Future Market Opportunities

Growth in Tier II and III Cities: Tier II and III cities contributed an estimated 40% of apparel sales in India in 2023, with an increasing number of retail outlets establishing a presence in these regions. According to the Ministry of Commerce, spending on fashion in these cities grew by INR 5,000 per capita over the past two years. This growth signifies a shift in consumer behavior, as residents in smaller cities seek fashion options that were previously limited to metropolitan areas, thereby creating an expansion opportunity for brands targeting these emerging markets.

Demand for Sustainable and Ethnic Wear: Consumer demand for sustainable apparel options increased substantially in 2023, as per data from the Ministry of Environment, Forest and Climate Change. In addition, ethnic wear sales rose remarkably year-over-year, driven by consumers preference for culturally resonant clothing. This trend represents an opportunity for brands that emphasize eco-friendly fabrics and traditional designs, as consumers show anincreased willingness to pay premium prices for sustainable and culturally relevant fashion items.
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