India's domestic apparel market is projected to grow 9% annually to $146.3 billion by 2029 from $95.7 billion in 2025, according to a study by the Clothing Manufacturers Association of India (CMAI) and market research firm 1Lattice. The study projects the world's fourth-largest apparel market to grow at 9% during 2025-29, significantly faster than the US (2%), China (1%), European Union-27 (2%) and the UK (3%). The market has recovered sharply since the covid-19 pandemic, falling from $68.5 billion in 2019 to $49.3 billion in 2020, before rising to $95.7 billion in 2025, representing an 18% compound annual growth rate (CAGR) over the post-pandemic period. The report highlights that "rising casualisation, evolving lifestyles, strong demand from women and children, increasing preference for comfort and functionality, and the continued importance of physical stores are reshaping how Indians discover, purchase and consume apparel."
Rural India accounted for $55.9 billion, or 58% of the total apparel market, in 2025, as reported by the CMAI study. Metro and tier-I markets contributed $14.2 billion, tier-II markets $8.5 billion and tier-III and smaller markets $17.1 billion. According to Santosh Katariya, president of the CMAI, the next phase of growth will increasingly come from markets beyond the metros, with tier-II and tier-III cities already contributing significantly to apparel consumption. The regional distribution shows North India accounting for $27.8 billion, East at $25.8 billion, South at $22 billion and West at $20.1 billion of consumption in 2025. The findings come from the Indian Apparel Market Size: A Consumer Research Report 2025, based on a survey of 10,929 consumers across 16 states conducted between November 2025 and February 2026.
Casualwear has emerged as the largest apparel occasion with a market of $30.8 billion in 2025, according to the CMAI report. Ethnicwear stood at $26.4 billion and formalwear at $26.3 billion. In menswear, the segment was worth $38.5 billion in 2025, with formalwear accounting for $17.1 billion and casualwear $15.5 billion. Shirts and jeans each accounted for 21% of menswear purchases, followed by trousers at 16% and T-shirts at 14%. Rahul Mehta, chief mentor at the CMAI, noted that men's wear is becoming more casual, comfortable and versatile, while women's wear is evolving through new silhouettes and Indo-Western styling. However, casualization does not mean traditional apparel is losing relevance. Ethnicwear accounts for about 60% of womenswear, with sarees and salwar suits among the biggest categories, and weddings continue to support demand for sherwanis, bandhgalas and Indo-Western outfits in menswear. The report emphasizes that "consumer preferences are becoming more diverse, with demand spread across everyday casualwear, traditional and occasion-led clothing, formalwear, athleisure and functional apparel."
The textile and apparel sector is the second-largest employer in the country after agriculture, providing direct employment to around 45 million people and indirect livelihoods to more than 100 million people, according to the textile ministry. Offline channels accounted for 83% of apparel sales in 2025, worth $79.4 billion, while online sales were $16.3 billion, or 17% of the market. Exclusive brand outlets accounted for about half of offline sales, while multi-brand outlets accounted for 30% and shop-in-shop formats 20%. According to the report, kidswear is projected to grow at 9.4% annually, womenswear at 8.9% and menswear at 8.5% between 2025 and 2029, with kidswear expected to reach about $33.9 billion and womenswear projected to reach $54.5 billion by 2029. In womenswear, sarees account for 29% of the market and salwar suits 15%. The market, valued at around $95.7 billion (about ₹8 lakh crore) in 2025, is currently ranked as the fourth-largest apparel market globally after the US, China and the European Union.
