India’s apparel retail market is poised for strong expansion over the next five years, with the industry projected to approach Rs. 16 lakh crore (US $ 176 billion) by 2029–30, driven by rising disposable incomes, rapid digitalisation and sustained growth in value fashion and e-commerce, according to a report by CareEdge Ratings.
The apparel market, estimated at Rs. 9.30 lakh crore (US $ 102.6 billion) in 2024–25, has grown at a compound annual growth rate of about 7% since 2017–18. Organised retail currently accounts for roughly 41% of the total market and is expected to expand at a faster pace of 10–13%, supported by growing consumer preference for branded apparel, the entry of international brands and the continued expansion of organised retail formats.
CareEdge Ratings identified value fashion as a key growth driver, benefiting from rising brand awareness alongside heightened consumer price sensitivity. The value fashion segment, estimated at Rs. 3.5 lakh crore (US $ 38.6 billion) in 2023–24, is expected to grow at a CAGR of 7% to reach Rs. 5 lakh crore (US $ 55.1 billion) by 2029–30. Retailers such as Zudio, Max Fashion and Reliance Retail’s Yousta are aggressively scaling up store networks, particularly in Tier-2 and Tier-3 cities, which are emerging as major consumption centres.
E-commerce is also expected to play a central role in the sector’s growth. Online channels currently account for around 22% of organised apparel retail and are projected to increase their share to nearly 25% by 2029–30, translating into a market size of approximately Rs. 5 lakh crore (US $ 55.1 billion). Increasing internet penetration, wider smartphone adoption and the influence of Gen Z consumers on fashion trends are accelerating the shift towards digital-first and omnichannel retail strategies.
The report noted that the industry faced demand pressures during 2024–25 due to inflationary conditions and adverse weather patterns. However, signs of recovery emerged during the festive and wedding season towards the end of the year, supported by higher footfalls, promotional online sales events and improving consumer sentiment.
CareEdge Ratings also highlighted that recent changes to the goods and services tax regime are likely to favour the value fashion segment. Apparel priced below Rs. 2,500 (US $ 28) attracts a lower GST rate of 5%, improving affordability and supporting volume growth. In contrast, higher GST on premium apparel could encourage consumers to trade down, further strengthening demand for value offerings.
