Apparel industry to grow at 8 percent for next three years

India’s apparel industry is likely to grow at about 8

percent annually and reach Rs 2,74,600 crores over the next three years, credit rating agency Care Research has said. “The domestic apparel industry will grow at a CAGR of about 8 percent from Rs 2,02,600 crores in FY12 to Rs 2,74,600 crores in FY16. Policy reforms, revival in economy and entry of new brands to support recovery of apparel demand in FY14,” Care Research has said in a report.

The industry grew at a CAGR of 10 percent from Rs 1,26,000 crores in financial year 2007 to Rs 2,02,600 crores in the fiscal 2012. The growth is attributed to an upsurge in the economy coupled with the rise in per capita disposable income, it said. Factors like changing fashion trends, growing consumer class and rising urbanisation have led to the growth in the apparel industry.

Increasing retail penetration, growing service class and increasing share of designer wear have also been the drivers for growth, the agency said. However, on account of overall slowdown in the economy, the apparel industry witnessed a lower growth in the past couple of years. The industry is estimated to have grown at a lower rate of about 4-5 percent year-on-year in FY13. Care Research expects the impact of recent slowdown to persist and demand to recover gradually.

The various measures which are expected to aid in recovery in apparel demand in FY14 include resumption of zero excise duty on readymade garments and made-ups announced in the Budget 2013-14.