The report states that balancing expansion and enhancing omnichannel capabilities while implementing cost-optimisation measures will be crucial for maintaining profitable growth
Fuelled by rising disposable incomes, urbanisation and the increasing dominance of ecommerce, India’s apparel retail market is expected to touch around Rs 16 lakh crore by the financial year 2030 from Rs 9.30 lakh crore in FY25.
A report by CareEdge Ratings highlighted that the organised retail sector, accounting for around 41 per cent of the overall market, is set to grow by 10 to 13 per cent, spurred by the entry of international brands, consumer preferences for branded and structured retail formats, the rising appeal of value fashion and the shift towards online shopping.
“Balancing expansion and enhancing omnichannel capabilities while implementing cost-optimisation measures will be crucial for maintaining profitable growth and a stable credit profile for the apparel retail sector. Efficient inventory management and a stronger digital presence are expected to further enhance operating performance while catering to evolving consumer preferences,” stated Pulkit Agarwal, Director, CareEdge Ratings.
Ecommerce, accounting for 22 per cent of the organised retail market is projected to reach Rs 5 lakh crore by FY30, driven by the expansion of online platforms and digital-first brands. The apparel market’s year-on-year sales growth moderated in FY25 compared to FY24, further influenced by subdued demand and extreme weather conditions. However, signs of recovery began to emerge from October, November 2024, driven by increased foot-falls and sales during the festive and wedding seasons.
Key Growth Pillars
India’s value fashion market, estimated at Rs 3.5 lakh crore in FY24, is set to expand at a compounded annual growth rate (CAGR) of 7 per cent, reaching Rs 5 lakh crore by FY30. This growth is driven by rising brand consciousness and fashion awareness, particularly in tier 2 and 3 cities, where evolving consumer preferences are reshaping the retail landscape.
The report added that with over 955 million internet users and ecommerce penetration in the apparel market expected to reach 25 per cent by FY30, the digital fashion space is poised for significant expansion. The rise of brand-owned websites as a preferred sales channel is helping brands build direct relationships with consumers, gain valuable insights and improve profitability.
“Looking at FY26 and beyond, the industry outlook is favourable. Ecommerce and online sales will expand rapidly, fuelled by internet penetration and gen-Z’s fashion influence. At the same time, brick-and-mortar outlets will continue to dominate premium purchases due to the importance of the in-store experience. Value fashion in tier 2 and 3 cities is expected to emerge as a major growth driver, supported by rising disposable incomes, expanding trend of occasion-based dressing, and ecommerce,” highlighted Sonal Bhageria, Associate Director, CareEdge Ratings.
Private labels are expected to account for a substantial portion of the retail industry by 2030. Largely all value retailers are private labels led with some national brands included to complete the retail offering. Investments in robust product design and development capabilities and a focus on private-label development across categories have been key factors enabling value retailers to offer fashionable products at affordable prices and to improve margins.
