The growing Indian economy has led to expectations of 11-12 per cent growth in the domestic apparel market in the next seven years, said a study conducted by the apex industry body the Clothing Manufacturers’ Association of India (CMAI).
“India’s domestic apparel market was estimated at $67 billion in 2017 which had grown at a compounded annual growth rate (CAGR) of 10 per cent since 2005. Owing to strong fundamentals, India’s domestic apparel market size is now expected to grow at 11-12 per cent CAGR and reach about $160 billion by 2025,” said Rahul Mehta, President, CMAI, while inaugurating the 67th National Garment Fair, India’s largest apparel trade show currently being held.
The four-day business-to-business (B2B) fair houses 916 exhibitors in 986 stalls displaying 1,087 apparel brands in a 650,000 square feet area. The fair displayed leading brands in men’s wear, women’s wear, kid’s wear and accessories.
“India’s domestic market has performed better than the largest consumption regions like the US, EU and Japan, where depressed economic conditions led to lower demand and growth,” said Mehta.
The domestic apparel industry is dominated by ready-to-wear category with its market size of around $56 billion, with an 84 per cent share which is further growing at a CAGR of 10-11 per cent. The ready-to-stitch market is also gaining momentum as more and more men who have been buying premium or luxury readymade clothing brands want to wear a shirt or a trouser that fits them perfectly. The ready-to-stitch market, currently at $11 billion, is expected to grow at a CAGR of 7 per cent and reach about $20 billion by 2025.
Premal Udani, Managing Director, Kaytee Corporation, a kids’ wear apparel manufacturer and exporter, said that apparel exports had taken a beating from October 2017 onwards.
“The introduction of the goods and services tax (GST) had resulted in non-refund of several embedded taxes. Consequently, apparel exports for the financial year 2017-18 (FY18) declined by 4 per cent to $16.7 billion from $17.38 billion in the previous year,” he added.
The downturn continues in FY 2018-19 with a month-on-month decline of 10 per cent. The government is seized of the matter and has assured that embedded taxes will be refunded through the drawback route.