Is the Indian Apparel Sector Set for 11% Growth Over FY24-FY29?
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Synopsis
The Indian apparel sector is on the brink of significant growth, with projections indicating an impressive 11% CAGR from FY24 to FY29. This growth is driven by changing consumer habits and the rise of online retail. Discover how the industry is evolving in this informative piece.
Key Takeaways
- Projected 11% CAGR for the apparel sector from FY24 to FY29.
- Branded segment growth at 16% CAGR vs unbranded at 5% CAGR.
- Active wear expected to grow by 25% CAGR.
- Competitive market disrupted by e-commerce and foreign brands.
- India's T&A exports growing, with a 14.43% increase in apparel.
New Delhi, June 20 (NationPress) The Indian apparel industry is expected to achieve a 11 percent compound annual growth rate (CAGR) from FY24 to FY29, according to a report released on Friday.
The sector has seen a consistent 11 percent CAGR from FY20 to FY24, aligning with the growth of nominal GDP and private final consumption expenditure (PFCE), as highlighted by HSBC Global Investment Research.
Due to increasing accessibility and affordability, the branded segment has experienced a remarkable 16 percent CAGR from FY12 to FY24, while the unbranded segment has grown at 5 percent CAGR.
Looking ahead, among various apparel sub-segments, non-formal wear is expected to show the highest growth potential, particularly active wear, which is projected to grow at a 25 percent CAGR during FY24-29, fueled by the post COVID-19 trend of casual attire. Additionally, organized value retail is anticipated to see a 16 percent CAGR during the same period, benefiting the most from the shift away from unorganized retail.
Despite its potential, the apparel market remains highly competitive, facing challenges from e-commerce, foreign brands, and rapidly changing fashion trends, the report noted.
There are two predominant business models identified: Format-focused (retail outlets primarily limited to the company’s own stores and e-commerce) and Brand-focused (a fixed asset-light model, though capital-intensive due to distribution needs).
“We believe the format model holds an advantage with its wider customer reach and enhanced control over supply chains. Such formats are also better equipped to manage the emerging risks in the apparel sector,” the report stated.
The report favors value fashion formats due to the substantial retail opportunity and minimal disruption from e-commerce.
Moreover, India’s Textile and Apparel (T&A) exports have continued to rise, achieving a growth of 7.45 percent in April 2025 compared to the same month the previous year.
This positive trend is largely attributed to the apparel sector, which recorded a robust 14.43 percent year-on-year growth, as per the analysis of data released by the Ministry of Commerce.
In April 2025, India's textile exports were approximately 2.61 percent higher than the same month last year, while apparel exports surged by 14.43 percent to reach the $1.37 billion mark, compared to $1.2 billion in April of the previous year.
Point of View
The growth of India's apparel sector signals a significant shift in consumer behavior and market dynamics. The projected CAGR reflects not only economic resilience but also evolving tastes and preferences. Our commitment is to ensure that this growth translates into sustainable practices and inclusive opportunities for all stakeholders involved.
NationPress
20/06/2025
Frequently Asked Questions
What is the projected growth rate of the Indian apparel sector?
The Indian apparel sector is expected to achieve an 11 percent CAGR from FY24 to FY29.
What factors are driving the growth in the apparel sector?
Key factors include increased penetration, affordability, and a shift towards branded and non-formal wear, particularly active wear.
How have India's T&A exports performed recently?
India's Textile and Apparel exports recorded a growth of 7.45 percent in April 2025 compared to the same month last year, with apparel exports growing by 14.43 percent.
What are the primary business models in the apparel market?
The primary business models are Format-focused retail outlets and Brand-focused models, each with its own advantages and challenges.
What is the expected growth for active wear in the coming years?
Active wear is projected to grow at a remarkable 25 percent CAGR driven by the post COVID-19 trend of casual wear.
