India’s domestic apparel market is set to grow from US$ 95.7 billion (about Rs 8 lakh crore) in 2025 to US$ 146.3 billion (about Rs 12 lakh crore) by 2029, a compound annual growth rate of 9%, according to a new consumer study by the Clothing Manufacturers Association of India (CMAI) and market research firm 1Lattice.
The Indian Apparel Market Size: A Consumer Research Report 2025 ranks India as the world’s fourth-largest apparel market. It also shows a sector that has rebounded strongly since the pandemic, having grown from US$ 49.3 billion in 2020, an 18% CAGR over the five years.
The study draws on a household survey of 10,929 consumers across 16 states, which was cross-checked through industry conversations, secondary research and company-level inputs. It also takes into account annual performance data from listed apparel companies, including Aditya Birla Fashion & Retail, Arvind Fashions, Raymond, Page Industries, Kewal Kiran Clothing, Vedant Fashions, Gokaldas Exports, Cantabil Retail and TCNS Clothing. It is the first comprehensive assessment of the sector by CMAI since 2019.
Rural India leads consumption
The most striking finding is where the money is being spent. Rural India accounted for US$ 55.9 billion of the 2025 market, roughly 58% of total consumption. Metro and Tier-1 cities together contributed US$ 14.2 billion, Tier-2 cities US$ 8.5 billion, and Tier-3 and smaller towns US$ 17.1 billion.
The report says this upends the conventional view that the market is centred on major urban hubs. For brands and manufacturers, it adds, distribution, pricing, product assortment and localised merchandising may become as important as brand building.
Commenting on the study, Santosh Katariya, President, CMAI, said “The next phase of growth for India’s apparel industry will increasingly come from markets beyond the metros. Tier-2 and Tier-3 cities are already contributing significantly to apparel consumption, while rising aspirations are creating demand for a wider choice of brands, formats and fashion. The opportunity now is to build propositions that are contemporary, relevant and accessible to the emerging Indian consumer, while deepening distribution and retail presence across these markets.”
The findings point to an apparel market where consumers are becoming more diverse in their preferences, with demand spanning everyday casualwear, traditional and occasion-led clothing, formalwear, athleisure and functional apparel.
Casualwear is the biggest occasion
Casualwear is now the largest apparel occasion, accounting for 31% of the market, followed by ethnic wear at 27% and formalwear at 26%. Consumers are prioritising comfort and versatility, with strong demand in menswear for denims and T-shirts.
Fitness and functionality are also shaping purchases. In menswear, athleisure is gaining ground on the back of quick-dry T-shirts, stretchable joggers and moisture-wicking polos. In kidswear, parents’ growing focus on health and activity is lifting interest in sportswear, while breathable, easy-to-wear garments support casualwear demand.
Rahul Mehta, Chief Mentor, CMAI, said “One of the most significant shifts in India’s apparel consumption is the blurring of traditional category boundaries. Men’s wear is becoming more casual, comfortable and versatile, with consumers seeking styles that can transition seamlessly between work, leisure and social occasions. At the same time, women’s wear remains deeply rooted in ethnic wear while evolving through new silhouettes, Indo-Western styling and greater versatility. These shifts reflect an Indian consumer adapting apparel choices to a more contemporary and dynamic lifestyle.”
Women’s and kids’ segments set to outpace menswear
Menswear remains the largest segment at US$ 38.5 billion, followed by womenswear at US$ 35.6 billion and kidswear at US$ 21.6 billion. Between 2025 and 2029, however, growth is expected to tilt toward the other two segments:
- Kidswear: 9.4% CAGR, reaching about US$ 34 billion
- Womenswear: 8.9% CAGR, reaching about US$ 55 billion
- Menswear: 8.5% CAGR
Womenswear growth is being supported by rising workforce participation, demand for athleisure and the popularity of Indo-Western styles. The study also notes growing consumer interest in sustainable and ethical fashion.
Within segments, formalwear is the largest menswear category at US$ 17.1 billion, ahead of casualwear at US$ 15.5 billion. Ethnic wear dominates womenswear at US$ 21.2 billion, while in kidswear casualwear (US$ 9.4 billion) leads formalwear (US$ 7 billion).
Tradition endures alongside casual
The shift to casual clothing is unfolding alongside steady demand for traditional and occasion-led apparel. Ethnic wear makes up about 60% of womenswear, with sarees and salwar suits among the biggest segments. In menswear, weddings and celebrations continue to drive sales of sherwanis, bandhgalas and Indo-Western outfits.
Stores still dominate, but omnichannel is growing
Despite the growth of online shopping, offline retail accounted for 83% of apparel sales in 2025, against 17% for online. Offline sales were estimated at US$ 79.4 billion, with exclusive brand outlets making up about half. Online sales stood at US$ 16.3 billion, of which marketplaces contributed about 80% and direct-to-consumer websites 20%.
The report concludes that digital adoption is widening the consumer journey rather than replacing physical retail, underscoring the importance of an omnichannel approach.
Growth beyond the premium consumer
The study cautions that future expansion will not come only from premium branded buyers. Much of it will come from first-time branded consumers, those upgrading, and shoppers moving from unorganised to organised retail, making value-for-money positioning critical. The report describes the opportunity as “aspirationalisation across price points” rather than simply premiumisation.
For manufacturers, the report says this means greater flexibility and faster product cycles; for brands, sharper segmentation and stronger consumer insight; and for retailers, regionalised assortments and seamless omnichannel integration.
