India records highest five-year growth during 2026 Republic Day sales
28 January 2026, Mumbai
India’s retail landscape achieved a landmark performance during the 2026 Republic Day sales, recording its strongest growth trajectory in five years. This rise was underpinned by the strategic implementation of GST 2.0, which rationalized tax slabs for mass-market apparel and footwear priced up to Rs 2,500 from 12 per cent to 5 per cent. Industry analysts note, this fiscal realignment, effective since late 2025, significantly enhanced price flexibility for domestic manufacturers. The reduction in tax outflow has allowed them to accelerate inventory turnover while passing direct cost benefits to the consumer, stated a senior executive from a leading national fashion chain. Data indicates, combined with recent income tax concessions, these measures have expanded the middle-class discretionary pool, resulting in a 34 per cent Y-o-Y increase in e-commerce order volumes.
Wedding season synergies drive apparel dominance
The convergence of the national holiday with an intensive winter wedding calendar - projected to generate a turnover of Rs 6.5 lakh crore - has shifted the retail focus toward high-value ethnic and occasion wear. Unlike previous years driven by deep discounting, the 2026 sales cycle reflects a clear trend toward premiumization. Bridal wear and premium ethnic segments reported a 2X growth in demand, as consumers prioritized superior fabrics and intricate craftsmanship over entry-level products.
Operational challenges amidst value-chain realignment
Despite the robust sales figures, the sector faces structural pressures. While the sub-Rs 2,500 segment benefited from GST cuts, premium apparel priced above this threshold saw taxes rise to 18 per cent, straining margins in the bridge-to-luxury category. Furthermore, the industry is navigating a transition toward sustainable manufacturing and direct-to-consumer (D2C) efficiency. A brief case study of Raymond Lifestyle illustrates this adaptation; the firm immediately repriced two-thirds of its portfolio to align with the 5 per cent GST slab, successfully capturing the volume revival in branded formalwear. Retailers are now integrating AI-driven logistics to manage the ‘morning rush; shopping window, which has replaced late-night impulse buying as the primary peak for consumer activity.
Currently valued at approximately $222 billion, the Indian textile and apparel market is projected to reach $646 billion by 2033. Dominating in ethnic wear and mid-market formal segments, major players are now expanding into Tier II hubs. Historically a fragmented market, the sector is consolidating through organized retail and GST-led formalization, targeting a 12 per cent CAGR driven by rising urban aspirations and a robust domestic wedding economy.
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