Indian apparel sector to clock 11 pc growth over FY24-FY29: HSBC
The Indian apparel sector is projected to clock a 11 per cent compound annual growth rate (CAGR) over FY24-FY29, a report showed on Friday.
India's apparel sector expanded at an 11 per cent CAGR over FY20-24, in line with nominal GDP and private final consumption expenditure (PFCE) growth, according to HSBC Global Investment Research.
Driven by increasing penetration and affordability, branded segment has seen a 16 per cent CAGR over FY12-24 (unbranded 5 per cent CAGR).
Going forward, across different apparel sub-segments, non-formal wear has higher growth expectations with active wear (25 per cent FY24-29 CAGR driven by post COVID-19 trend of casual wear) and organised value retail (16 per cent CAGR FY24-29, the biggest beneficiary of shift from unorganized) expected to clock highest growth.
Apparel though remains a competitive market disrupted by e-commerce, foreign brands, and changing fashion cycles, said the report.
There are two major business models — Format focused (retail outlets with distribution primarily limited to the company's own outlets and e-commerce) and Brand focused (fixed asset-light business but working capital-intensive due to distribution mix).
“We believe format model has an advantage due to its broader customer base and better control over their supply chains. Also, formats are better suited to navigate the emerging risks in the apparel space,” the report mentioned.
The report prefers value fashion formats given the size of the retail opportunity and limited disruption from e-commerce.
Meanwhile, India’s Textile and Apparel (T&A) exports have continued their upward trajectory, recording a growth of 7.45 per cent in April 2025 compared to the same month of the previous year.
This positive trend was primarily driven by the strong performance of the apparel segment, which registered a robust 14.43 per cent growth year-on-year, an analysis of the data released by the Ministry of Commerce showed.
During April 2025, Indian textile exports were about 2.61 per cent higher as compared to the same month last year, while apparel exports registered a growth of 14.43 per cent during the month to touch the $ 1.37 billion mark compared with $ 1.2 billion in April last year.
