Fashion Forward: An Analysis of India's Growing Apparel Market

India's apparel market is transforming remarkably, characterised by vibrant growth and evolving consumer preferences. The market was valued at US$ 102.8 billion in 2022 and is projected to reach US$ 146.3 billion by 2032, growing at a CAGR of 4% during 2022-2032. The increasing middle-class population, high disposable income, and shifting lifestyle preferences induced by fashion are driving this growth. As consumers increasingly aspire to wear stylish and branded clothes, the demand for domestic and international fashion labels is growing, leading to increased market growth.

Apart from economic indicators, the fashion sector plays a vital role in the cultural identity and social fabric of India. Apparel not only projects a person’s personality and way of life but also reflects the rich heritage and varied traditions of the nation. This cultural significance is intertwined with the evolving market, as consumers seek to balance modern fashion trends with traditional elements. Moreover, e-commerce has changed the way Indians buy their clothes; traditional and contemporary fashion are more accessible than ever. This shift has expanded the consumer base and fostered a competitive environment, compelling brands to innovate continuously.

Market overview

The Indian apparel market is growing strongly, reaching at a value of US$ 102.8 billion in 2022. The value will see a further increase at US$ 146.3 billion by 2032 by recording a compound annual growth rate of 4.0% throughout the start of the period in 2024 up to 2032 as expected by marketresearchfuture. In 2023, the apparel market was valued at US$ 106.9 billion, owing to an increase in its consumer base, contributed mainly by an increase in disposable income, urbanization, and the changing lifestyle of the population. A high growth driver is the increasingly large middle-class population that reflects increased spending on fashion and lifestyle products.

Initiatives such as "Make in India" and Skill Development by the government in recent times have been highly instrumental in driving innovation and growth within the industry. But the apparel sector in India, though at a growing stage, when compared to those of the United States or China, remains very small, and this sector has a lot more room for growth. India excels in natural fibres, especially cotton, reinforcing its status as a global textile leader. Cotton's affordability and versatility play a crucial role in India’s market dominance. Emerging trends such as growing casual and athleisure wear demand, and social media's impact on fashion choice, are rewriting the rules. The Indian apparel market will attain a strong global position soon with the backing of friendly policies, sustainable innovation and evolving consumer behaviour.

Source- marketresearchfuture, F-Forecasted

Consumer and regional trends in India’s apparel market

Consumer preference and regional diversity have changed the apparel market of India, together with some key emerging trends for sustainability, athleisure, and the influence of digital platforms. Increased demand for sustainable fashion: Heightened environmental sensitivity is promoting increased demand for sustainable fashion. A trend can be seen in which people prefer eco-friendly materials and ethical production methods. Online shopping has increased manifold, whereby a wide choice of domestic and international brands is easily availed. It becomes even more striking in Tier-II and III cities, where the e-commerce boom has democratised access to fashion and driven demand for versatile clothing.

The athleisure segment is another area witnessing rapid growth, consolidating functionality with style to cater to India's young, fitness-conscious population. The segment is estimated to reach US$ 3.2 billion (Rs. 24,800 crore) by 2032, with an annual growth rate of 5.2%, driven by rising disposable incomes, gym memberships and a growing consciousness for a healthy lifestyle. Moreover, performance-oriented clothing at reasonable prices has supported the segment's growth. Currently, women’s clothing dominates this segment; however, men’s clothing is likely to show fast growth soon. E-commerce platforms further enhance accessibility, contributing to the expansion of this category across urban and rural areas.

India's regional diversity adds another layer of richness to its apparel market. In states such as Rajasthan, traditional wear, including bandhani and leheriya, reflects a deep-rooted cultural identity, while metropolitan hubs such as Mumbai and Delhi set trends in urban, western-style fashion. The southern states are significant contributors to the textile industry, with Karnataka becoming a hub for casual and leisure wear. A lot of regional brands and unique cultural influences keep this market vibrant and diverse, catering to local and foreign demand. The blending of traditional and modern styles, along with an increasing focus on comfort, sustainability and accessibility, will further shape the Indian apparel market in the coming years.

Challenges and Opportunities

• Challenges:
  • Supply chain disruptions
    The industry faces significant supply chain challenges, including delays in shipping and logistics. For instance, Inditex, the owner of Zara, has increased its use of air freight from India to Spain to avoid shipping delays, a move that may challenge its goal of reducing indirect emissions (Scope 3) by 50% by 2030, according to Reuters.
  • Competition from international brands
    The entry and expansion of global fashion retailers have intensified competition. Foreign brands have significantly expanded their presence in India. For instance, Decathlon operates 129 stores and employs 5,700 people across the country, according to Le Monde.
  • Unorganised retail sector
    A substantial portion of the apparel market remains unorganised, with formal retail accounting for just 35% of sales in 2016, projected to reach around 45% by 2025, according to Mckinsey and Company. This fragmentation poses challenges in standardisation and scalability.
  • Infrastructure and labour productivity
    Inadequate infrastructure and lower labour productivity in India, compared with that of competing nations, hinder the industry's efficiency and global competitiveness.
• Opportunities:
  • Expanding rural markets
    With increasing disposable incomes and internet penetration, rural markets present a vast, untapped consumer base for apparel retailers. Brands are recognising the potential in these areas to drive growth.
  • Sustainable fashion
    Growing environmental consciousness among consumers is driving demand for sustainable and ethically produced apparel. This shift encourages brands to adopt eco-friendly practices and materials, aligning with global sustainability trends.
  • Government initiatives
    Policies such as the Production-Linked Incentive (PLI) scheme aim to boost garment exports to US$ 50 billion by 2030, providing financial incentives to enhance production capabilities. Additionally, the establishment of Mega Integrated Textile Region and Apparel (MITRA) parks seeks to create world-class infrastructure for the textile industry.
  • Technological integration
    The adoption of digital technologies, including e-commerce platforms and supply chain management tools, offers avenues for efficiency improvements and market expansion. Companies such as Myntra are leveraging AI-driven features and social commerce to enhance customer engagement.

​​​​​​​​​​​​​​​​​​​Outlook for the apparel industry in India

Market research futures suggest that the growing Indian apparel market will increase from US$ 106.9 billion in 2023 to US$ 146.3 billion by 2032, growing at a CAGR of 4.0%. Increasing disposable incomes, along with growing urbanization, have improved the penetration of fashion across urban and rural geographies. Major opportunities include sustainable fashion: consumers increasingly look for eco-friendly materials and ethics associated with the manufacturing process. Besides, technology-related developments such as AI-powered personalization and social commerce also provide ways to increase the engagement of consumers and smoothen operations. The increasing adoption of athleisure and casual wear also points to dedicated investment areas, aligning with the health-conscious and style-savvy consumer. As brands tap into Tier II and III cities, and explore untapped rural markets, the industry is poised to solidify its standing globally. By embracing innovation and sustainability, stakeholders can achieve long-term growth by building India's apparel market into a globally competitive force.