2025 marks a significant pivot in the apparel industry, the changes taking place are not incremental, but fundamental, writes Rahul Mehta, Chief Mentor, Clothing Manufacturers Association Of India (CMAI)
Apparel Industry is known for its gradual evolution over a period of time, a gradual shift in taste, in consumer behaviour, in coming of age of newer channels of distribution, etc. Rarely do these changes occur dramatically. The year 2025 was an exception. Dramatic events, with far reaching consequences, highlighted the year gone by.
Disruptions In Supply Chain
Bangladesh, the fastest growing Sourcing hub in global apparel trade, overnight saw its domestic political upheaval disrupt stable and settled buyer-seller relations; it witnessed unprecedented and totally unexpected closure of well entrenched factories, units shut down, destroyed, and thousands of workers left helpless and stranded.
Buyers, just about settling into a ‘China + 1’ strategy in sourcing, scrambled to execute a ‘Bangladesh + 1’ strategy – and concluded that no matter what the immediate commercial considerations dictated, they simply could not depend on just one or two countries for their supplies.
In short, the old adage of ‘do not put all your eggs in one basket’ changed to ‘do not put all your eggs in just a couple of baskets’!
The ‘Trump’ Factor
Perhaps the most drastic dramatic happening which unsettled the entire supply chain was the decision of the American President to use tariffs as a major ‘weapon’ to achieve his political, economic, and world view objectives. For a brief period, it threw the entire global trade into turmoil and it took some time for each nation to reach its own levels of acceptance, negotiations and submission before some semblance of sanity was restored.
India is still facing the brunt of geo-political pressures of accepting the US world view and its own independent view – and only time will tell how the current mayhem will end.
Environmental Factor
Green earth, sustainability, circularity etc. have always been spoken about for quite some time in seminars and conferences – and most manufacturers believed, or at least hoped, that these would remain confined to these banquet halls of five-star hotels. But, quite unexpectedly, these very norms and concepts emerged out of the limited confines and barged into mainstream supply chains. Tough standards were set by buyers, and innovations, newer raw materials and processes were encouraged.
MSMEs in particular, faced the heat, and were often dropped from the supply chain if they failed to comply. Start-ups saw an entry option where none existed earlier. Higher prices too were obtained by those fulfilling the requirements – though not as much as one would have liked.
The concern for environment also saw brands using these phenomena in their marketing strategies – positioning themselves as ‘conscious’ Brands, incorporating ‘take-back’ schemes, promoting recycled/repaired goods, the rental concept, and designing for reusability. Traceability is another aspect which is becoming important in manufacturing processes.
In short, 2025 has seen sustainability move from being a ‘nice-to-have’ concept to a business imperative.
For years, garment manufacturing was considered one of those old-school industries in which labour still played the dominating role, and automation did get a look-in, but to a minimal extent. All of a sudden, 2025 has seen dramatic changes happening with digitisation and AI looming large over processes and practices.
And this was not restricted to just manufacturing, but even in the way samples were developed, displayed, and selected. Both timelines and costs were slashed by using latest tools of AI for placing of orders. Demand forecasts became far more accurate, consumer behaviour more predictable, and inventory management much more efficient.
Consumer Behaviour
The consumer of 2025 almost seemed a new persona – totally different from her earlier self. She became a far more ‘conscious’ person – still spending, but much more cautiously, with much more concern. She is willing to pay more for ethically made goods, but at the same time, not willing to spend exorbitantly for the sheer ego satisfaction of wearing labels.
Her priorities too changed. Travel, tourism, and hospitality, shot up in her list. Where she was seen became more important than what she was wearing. Her social media posts and the ‘likes’ on her page became her parameters for her popularity and social acceptance.
There is also a growing desire for personalisation – the shift from ‘tailored’ clothes to ‘ready-mades’ took a long time, but there is a distinct reverse trend towards customised fits. ‘Bespoke’ clothing is the latest catchword for the upper class, and the surge in custom made clothing brands, particularly in online channels, is clear evidence of this trend.
Domestic Market
The otherwise steady growth rate in the domestic sector, rudely disturbed during the dreaded Covid years, was once again hit by the government’s totally unexpected slotting of garments above Rs 2,500 into the 18 per cent GST slab. Whilst the raising of 5 per cent slab from Rs 1,000 to Rs 2,500 was a very welcome step, and gave a fillip to the value segment, it threw into total disarray the Festive wear segment, the wedding wear segment, and the winter wear segment.
GST data shows that the apparel sector was the only sector which recorded a lower GST collection in the month of November compared to the previous year – a testimony to the error of judgement in the otherwise outstanding set of reforms introduced by the government.
I am afraid these segments will have to completely realign their business strategies if they are to overcome the price differential of 18 per cent between the grey market and the official channels. In conclusion, 2025 marks a significant pivot in the apparel industry, the changes taking place are not incremental, but fundamental. Only the fittest, the most agile, and the most flexible will survive.
Will the Indian Apparel Industry make the grade? Only time will tell.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.
