India’s domestic apparel market, currently the fourth-largest globally, is projected to grow from US $95.7 billion in CY2025 to US $146.3 billion by CY2029, registering a 9% CAGR, according to a report released by the Clothing Manufacturers Association of India (CMAI) in association with market research firm 1Lattice.
The market is being reshaped by rising casualisation, evolving lifestyles, stronger demand from women and children, and increasing consumer preference for comfort and functionality. Physical stores also continue to play an important role in how consumers discover and purchase apparel.
Rural India accounted for US $55.9 billion, or around 58%, of total apparel consumption. Metro and Tier-1 markets together accounted for US $14.2 billion, while Tier-2 markets contributed US $8.5 billion and Tier-3 and smaller markets contributed US $17.1 billion.
Santosh Katariya, President, CMAI, noted that the next phase of growth for the apparel industry is expected to increasingly come from markets beyond the metros.
He added that 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.
He further added that the opportunity for the industry is to build propositions that are contemporary, relevant and accessible to emerging consumers while expanding distribution and retail presence across these markets.
The report noted that smaller towns and rural markets are increasingly becoming major growth opportunities. For apparel brands and manufacturers, distribution, pricing, product assortment and localised merchandising could become as important as brand building.
India’s apparel sector has recorded a strong recovery following the pandemic, growing from US $49.3 billion in CY2020 to US $95.7 billion in CY2025, representing an 18% CAGR during the period.
According to a report, Men’s wear remained the largest apparel segment in India at US $38.5 billion in CY2025 and is projected to grow at an 8.5% CAGR. Womenswear followed at US $35.6 billion, while kidswear stood at US $21.6 billion.
However, the report said the growth trajectory is shifting towards womenswear and kidswear. Kidswear is projected to grow at a 9.4% CAGR between CY2025 and CY2029, while womenswear is expected to grow at an 8.9% CAGR.
Rahul Mehta, Chief Mentor, CMAI, said men’s wear is becoming more casual, comfortable and versatile, with consumers looking for styles that can move between work, leisure and social occasions.
Women’s wear, meanwhile, remains strongly rooted in ethnic wear while evolving through new silhouettes, Indo-Western styling and greater versatility, he added.
Casualwear has emerged as the largest apparel occasion in India, accounting for 31% of the market. Ethnic wear accounted for 27 %, while formalwear represented 26%.
Within menswear, athleisure is gaining momentum, driven by demand for quick-dry T-shirts, stretchable joggers and moisture-wicking polos.
In kidswear, greater parental focus on health and activity is driving demand for sportswear and activity-specific clothing. Breathable and easy-to-wear garments are also supporting demand for casualwear, according to the report.
