Whalesbook
CareEdge Ratings forecasts India's apparel retail market will surge to approximately ₹16 lakh crore by fiscal year 2030. This expansion is propelled by a confluence of factors including rising disposable incomes, rapid digitalization, and robust growth in the value fashion and e-commerce segments. The market was estimated at ₹9.30 lakh crore in the current fiscal year, 2024-25.
Market Momentum
The sector has demonstrated resilience, growing at a compound annual growth rate (CAGR) of about 7 per cent since FY18. Organized retail, currently holding a 41 per cent share, is expected to outpace the overall market, expanding at a faster 10-13 per cent annually. This surge is fueled by consumer preference for branded apparel and the increasing presence of international and structured retail formats.
Value Fashion and E-commerce Pillars
The value fashion segment, estimated at ₹3.5 lakh crore in FY24, is a significant growth engine. It is anticipated to reach ₹5.0 lakh crore by FY30, growing at a 7 per cent CAGR. Retailers like Zudio and Reliance's Yousta are aggressively expanding networks in Tier-2 and Tier-3 cities, tapping into new consumption hubs. E-commerce channels are projected to climb from 22 per cent to nearly 25 per cent of organized apparel retail by FY30, representing a market value of around ₹5.0 lakh crore.
Navigating Economic Headwinds
Despite demand pressures in early 2024-25 due to inflation and weather, the market showed recovery during the festive and wedding seasons. Increased footfalls, online sales, and improved consumer sentiment have bolstered sales momentum. Recent Goods and Services Tax (GST) adjustments are likely to benefit the value segment, with apparel under ₹2,500 taxed at a lower 5 per cent rate. This policy favors affordability and volume, potentially encouraging consumers to trade down from premium offerings.