The Indian domestic garment market is to grow by 12% on robust demand, according to CMAI reports. There are expectations of about 11-12 per cent growth in the domestic garment market in the next seven years, said a study conducted by the apex industry body- the Clothing Manufacturers' Association of India (CMAI).
India's domestic garment market was at $67 billion in 2017-2018 which had grown at a compounded annual growth rate (CAGR) of 10 per cent since 2005. Owing to strong fundamentals, India's domestic garment market size is now expected to grow at 11-12 per cent CAGR and reach about $160 billion by 2025.
The domestic garment industry is dominated by ready-to-wear category with its market size of around $56 billion, with an 84 per cent share which is further growing at a CAGR of 10-11 per cent. The ready-to-stitch garment market, currently at $11 billion, is expected to grow at a CAGR of 7 per cent and reach about $20 billion by 2025.
Effects of the introduction of GST
The introduction of the goods and services tax (GST) had resulted in a downslide for the Indian Garment industry. Consequently, the exports for the financial year 2017-18 (FY18) declined by 4 per cent to $16.7 billion from $17.38 billion in the previous year.
India's garment exports are estimated to have declined by 17 per cent in the first quarter of FY19 due to a slowdown in demand from developed countries following weak economic activity there. The Clothing Manufacturers' Association of India (CMAI),showed India's garment exports at $1.35 billion and $1.34 billion in April and May 2018, a decline of 23 per cent and 17 per cent respectively. During FY18, garment exports from India fell by 4 per cent to $16.72 billion.