Apparel retail in India to grow to Rs 16 lakh crore by FY30: CareEdge Ratings
19 January 2026, Mumbai
The apparel retail sector in India is on a trajectory to reach Rs 16 lakh crore ($193 billion) by FY30, according to the latest 2026 report from CareEdge Ratings.
This valuation represents a nearly twofold increase from the Rs 9.30 lakh crore estimated for FY25. The market's expansion is fundamentally driven by a structural shift toward the organized sector, which is projected to grow at a CAGR of 10–13 per cent, outstripping the broader industry.
As of early 2026, the organized segment accounts for 41 per cent of the total market, up from approximately 32 per cent just four years ago, signaling a definitive move away from unorganized trade.
The value-fashion engine and tier-II expansion
The most critical commercial catalyst is the ‘Value Fashion’ segment, which is forecast to grow at a 7 per cent CAGR to reach Rs 5.0 lakh crore by FY30. Leading retailers, including Tata’s Zudio, Landmark Group’s Max Fashion, and Reliance’s Yousta, are aggressively capitalizing on this trend by penetrating Tier-II and Tier-III cities.
These regional hubs are emerging as high-consumption centers due to rising disposable incomes and the increasing ‘brand consciousness’ of suburban consumers. Strategic store expansions are now primarily focused on these regions, where operational costs are lower and market saturation is minimal compared to metropolitan areas.
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Digital maturity and fiscal tailwinds
E-commerce is set to command a 25 per cent share of the organized market by 2030, translating to a Rs 5.0 lakh crore digital economy. This growth is boosted by the 2026 maturation of omnichannel strategies, where traditional brick-and-mortar stores function as micro-fulfillment centers.
Additionally, recent fiscal policies are favoring the affordable segment; apparel priced below Rs 2,500 now attracts a lower 5 per cent GST rate, enhancing volume play for value retailers.
Despite temporary 2025 headwinds from inflationary pressures and climatic disruptions, the sector recorded a strong recovery during the recent wedding season, with consumer sentiment rebounding toward branded, structured retail formats.
CareEdge Ratings is a premier Indian credit rating and research firm. It provides analytical oversight for over 1,500 entities across textiles, retail, and finance.
It monitors the transition of India’s retail sector from unorganized fragmented trade to a high-efficiency, technology-led organized marketplace targeting 13 per cent annual growth.
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