India’s apparel retail market seen touching Rs 1.6 tn by FY30

Rising incomes and e-commerce to drive apparel market growth.

India’s apparel retail market is poised for robust growth over the next five years and is projected to reach nearly Rs 1.6 trillion by FY30, driven by rising disposable incomes, rapid digitalisation and strong momentum in value fashion and e-commerce, according to a report by CareEdge Ratings.

The apparel market, estimated at Rs 9.30 trillion in FY25, has grown at a compound annual growth rate (CAGR) of about 7 per cent since FY18. CareEdge noted that favourable demographics, urbanisation and increasing fashion consciousness are expected to sustain growth momentum over the medium term.

Organised retail currently accounts for around 41 per cent of India’s apparel market and is expected to outpace overall industry growth, expanding at a CAGR of 10–13 per cent. This growth is being supported by rising consumer preference for branded apparel, the entry of international labels and the continued expansion of organised retail formats across cities.

The value fashion segment remains a key growth driver, benefiting from heightened brand awareness and increasing price sensitivity among consumers. Valued at around Rs 3.5 trillion in FY24, the segment is expected to grow at a CAGR of 7 per cent to reach nearly Rs 5 trillion by FY30. Retailers such as Zudio, Max Fashion and Reliance’s Yousta are rapidly expanding their store footprint, particularly in Tier-II and Tier-III cities, which are emerging as major consumption centres.

E-commerce is another significant growth engine for the sector. Online channels currently account for about 22 per cent of organised apparel retail and are projected to increase their share to nearly 25 per cent by FY30, translating into a market size of around Rs 5 trillion. Rising internet penetration, smartphone adoption and Gen-Z-driven fashion trends are accelerating the shift towards digital-first and omnichannel strategies.

While demand was subdued in FY25 due to inflationary pressures and adverse weather, CareEdge noted signs of recovery during the festive and wedding season. Recent GST changes are also expected to support growth in the value segment, enhancing affordability and boosting volumes.

News source: ANI