MUMBAI: India's apparel industry is likely to grow at about 8 per cent annually and reach Rs 2,74,600 crore over the next three years, credit rating agency Care Research said today.
"The domestic apparel industry will grow at a CAGR of about 8 per cent from Rs 2,02,600 crore in FY12 to Rs 2,74,600 crore in FY16. Policy reforms, revival in economy and entry of new brands to support recovery of apparel demand in FY14," Care Research said in a report here today.
The industry grew at a CAGR of 10 per cent from Rs 1,26,000 crore in FY07 to Rs 2,02,600 crore in FY12. The growth is attributed to an upsurge in the economy coupled with the rise in per capita disposable income, it said.
Factors like the 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 the increasing share of the 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 per cent Y-o-Y in FY13.
Care Research expects impact of recent slowdown to persist and demand to recover gradually.
The various measures/means 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. Expected revival in the economy in FY14 will help boost demand for apparels and aid faster clearance of investment proposal of foreign retail brands, the report said.