India’s apparel retail industry is heading into a decisive growth phase, with market size expected to expand to nearly ₹16 lakh crore by FY30, according to a recent assessment by CareEdge Ratings. The surge is being fuelled by rising household incomes, deeper digital penetration and a rapid shift toward organised and value-led fashion formats.
The sector, currently valued at about ₹9.3 lakh crore in FY25, has recorded steady expansion over the past several years, growing at an average annual rate of around 7 percent since FY18. What is changing now is the structure of demand. Organised retail, which accounts for roughly 41 percent of apparel sales today, is projected to outpace the broader market with growth of 10 to 13 percent annually. Greater preference for branded clothing, expansion of mall-led retail and the steady entry of international labels are reshaping how Indians shop for apparel.
Value fashion is emerging as one of the strongest pillars of this growth. Estimated at ₹3.5 lakh crore in FY24, the segment is on track to reach nearly ₹5 lakh crore by FY30. Brands such as Zudio, Max Fashion and Reliance-backed Yousta are accelerating store rollouts, especially across Tier II and Tier III cities where demand for affordable, trend-driven clothing is rising sharply.
Digital channels are also playing a larger role. Online sales currently contribute about 22 percent of organised apparel retail and are expected to climb close to 25 percent by the end of the decade, translating into a market opportunity of nearly ₹5 lakh crore. Wider smartphone usage, improving internet access and Gen Z’s influence on fashion discovery are pushing brands to adopt omnichannel and digital-first strategies.
While inflation and erratic weather patterns weighed on demand earlier in FY25, momentum improved during the festive and wedding season, aided by promotional sales and better consumer sentiment. CareEdge notes that recent GST revisions are likely to further support growth in the mass segment. Apparel priced below ₹2,500 now attracts a lower 5 percent tax, improving affordability and potentially driving higher volumes, even as premium categories face pricing pressure.
Together, these shifts point to a more structured, value-conscious and digitally driven apparel market over the next five years.
