Why do fashion companies invest in India?

Business

Decathlon store Credits: Decathlon.

Decathlon, Guess Jeans and Sandro are just a few of the fashion companies capitalising on India's growth opportunities, as the South Asian country becomes increasingly important for the fashion industry. According to Statista, the fashion market in India is expected to grow by 9.02 percent annually between 2025 and 2029. This growth creates significant opportunities for fashion businesses in India, a country that offers not only financial advantages but also opportunities to promote a socially responsible fashion industry.

Young consumers

India's demographics, with a large number of young consumers, make it a particularly significant market for fashion companies. According to marketing agency WARC, Gen Alpha (born between 2010 and 2024) and their parents together form an influential consumer group. Gen Alpha is actively involved in influencing purchasing decisions within the family.

Furthermore, Gen Alphas are digital pioneers growing up with technology and social media. They prefer personalised, immersive and interactive experiences, which offers fashion companies the chance to develop innovative and digital strategies that meet their expectations.

Local artisans and cost efficiency

India has long been known as a country of local artisans and cost efficiency. By manufacturing in India, companies can reduce costs, minimise their environmental footprint, and respond more quickly to the demands of the local market.

An increasing number of fashion businesses now appear to be ramping up their investments in the country. French fashion giant Decathlon, for example, recently announced it will allocate 100 million euros towards its growth plans in India for the next five years. The company also aims to manufacture 85 percent of its products locally in India by 2026.

American fashion company Guess Jeans also recently announced its investment in the South Asian country. In an official press release, Guess Jeans stated that the brand is entering the Indian market and will benefit from the “local market knowledge and strong infrastructure” of Tata CLiQ, a subsidiary of the Indian conglomerate Tata Group. According to research by Reuters, India has made significant investments in improving its infrastructure in recent years, including ports, roads, and logistics networks.

Most recently, Parisian fashion house Sandro announced the opening of its first store in India in Mumbai, in partnership with Reliance Brands Limited. The 150-square-metre boutique offers exclusive clothing and accessories for both women and men. This step is part of a broader strategy to expand their brand in South Asia, with Reliance Brands, a subsidiary of Reliance Industries, chosen as a partner due to their successful track record in the region. Reliance Brands has partnerships with fashion brands such as Burberry, Coach and Tiffany & Co., and is expanding the presence of premium and luxury products in the Indian market through both physical stores and online sales.

Opportunities for CSR

While India offers significant advantages for fashion businesses due to its young demographic and improved local production capabilities, the country is also known for its poor working conditions, social inequality and corruption. Working in India therefore presents challenges, but also opportunities for CSR (Corporate Social Responsibility), as O My Bag CEO and founder, Paulien Wesselink, explained in an interview with FashionUnited. Since its founding in 2011, O My Bag has consciously invested in India, aiming to address these issues and contribute to positive social and economic change. Additionally, Wesselink stated that the company has been paying a 'Living Wage Premium' to its producers in India since 2020, which is above minimum wage and allows families to genuinely support themselves.

Wesselink explains: “Brands often invest a lot of money in determining fair wages and working conditions. For companies that manufacture globally, this means adhering to different standards and legal minimum wages in each location. The UN (United Nations) and local governments all set different standards, which makes it difficult to find a universal approach. This is why we partner with local NGOs (non-governmental organisations) to ensure that this premium is used effectively. We also provide training on fair payment and disbursement systems so factory owners can implement them effectively. This also involves training for local teams on the importance of a living wage and financial literacy so workers learn to manage and save their income properly for their families.”

This article originally appeared on FashionUnited.NL. It was translated to English using AI and edited by Rachel Douglass..

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