A fresh study from the Clothing Manufacturers Association of India (CMAI) and research firm 1Lattice has found that rural India accounted for 58% of total spend on apparel in India.
Rural India generated US $55.9 billion in 2025, or roughly 58% cent of total spend. Metros and Tier-1 cities combined delivered $14.2 billion, while Tier-2 centres contributed $8.5 billion and Tier-3 and smaller locations $17.1 billion.
CMAI President Santosh Katariya said the next leg of expansion would be driven chiefly by markets outside the big cities, noting that Tier-2 and Tier-3 towns already account for a considerable share of purchases.
He argued that growing aspiration was fuelling appetite for broader brand choice, more retail formats and greater fashion variety, and that the task for industry was to craft offers that feel modern, pertinent and affordable while extending distribution networks and store footprints in up-and-coming centres.
According to the study India’s clothing sector is forecast to swell from $95.7 billion base in 2025 to $146.3 billion in 2029, a compound annual growth rate of 9%.
The post-pandemic rebound has been steep. Market value has nearly doubled from $49.3 billion in 2020 to $95.7 billion in 2025, equivalent to an 18% CAGR across the five-year span.
Titled ‘Indian Apparel Market Size: A Consumer Research Report 2025’, the study ranks the country as the world’s fourth-biggest apparel market.
It highlights several behavioural currents reshaping demand: a swift drift towards casual dress, stronger appetite for womenswear and children’s clothing, a premium on comfort and practicality, and the enduring primacy of bricks-and-mortar shopping.
Casual clothing in pole position
Casualwear is now India’s biggest occasion category at 31% of sales, ahead of ethnic wear at 27% and formalwear at 26%.
The report links the shift to shoppers favouring comfort, flexibility and garments that work across several settings.
Among men, there has been strong demand for denim and s-shirts, while women’s and children’s ranges are likewise embracing versatile, easy-to-wear styles.
Rahul Mehta, CMAI Chief Mentor, observed that conventional category lines are fading as buyers tailor their wardrobes to modern living.
Menswear, he said, is growing more relaxed, comfortable and adaptable, whereas womenswear remains rooted in ethnic dress but is evolving through fresh silhouettes, Indo-Western styling and wider versatility.
Women’s and children’s lines outstrip men’s
Menswear was still the biggest segment in 2025 at $38.5 billion, followed by womenswear at $35.6 billion and kidswear at $21.6 billion.
Looking towards 2029, however, kidswear is expected to expand quickest at a 9.4% CAGR, ahead of womenswear at 8.9% and menswear at 8.5%.
By 2029, children’s apparel should be worth about $34 billion and womenswear around $55 billion. The report credits women’s growth to rising workforce participation, surging demand for athleisure, the increasing popularity of Indo-Western looks and mounting interest in sustainable and ethical fashion.
Heritage dress holds its appeal
Even as casual wear races ahead, traditional and occasion-led clothing remains a major source of consumer spend.
Ethnic wear makes up 27% of the overall market and about 60% of womenswear, with sarees and salwar suits among the largest categories.
In menswear, weddings and festivities continue to sustain demand for sherwanis, bandhgalas and Indo-Western outfits.
Shops still rule the roost
Although shoppers are using digital channels more readily, physical stores still handle the vast bulk of transactions.
Offline retail took 83% of apparel sales in 2025 against 17% online. Offline sales were estimated at $79.4 billion, with exclusive brand outlets responsible for about half of that figure.
Online sales reached $16.3 billion, of which marketplaces held roughly 80% and D2C websites the remaining 20%.
The study concluded that digital is supplementing, rather than supplanting, the in-store journey, which makes an omnichannel strategy ever more vital for brands and retailers alike.
Opportunity stretches beyond premium
The report also underlines the sheer scale of the fragmented apparel ecosystem, contending that future growth will not rely solely on premium branded buyers.
Notable openings exist among first-time branded purchasers, shoppers trading up, and those migrating from unorganised to organised retail.
Value-for-money positioning therefore matters, and the report frames the prize as “aspirationalisation across price points” instead of mere premiumisation.
The research draws on a household apparel consumption survey of 10,929 consumers across 16 states, spanning demographics, socio-economic groups, product categories, occasions, purchase behaviour and online versus offline channels.
Findings were further cross-checked through industry discussions, secondary research and company-level inputs.
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