Indo-western fashion pivot: Brands bet on AI and ‘Bharat’ to fuel 2026 growth
27 December 2025, Mumbai
As the Indian fusion wear segment prepares for a projected 10 per cent CAGR through 2027, a new design language is emerging: the ‘Un-Ethnic’ ethnic. In 2026, the market is moving beyond basic kurtis toward high-concept silhouettes like lehengas paired with structured blazers and hand-painted motifs on modern tailored jackets. This $20 billion sub-sector is now being led by a ‘Bharat surge,’ where shoppers in cities like Bengaluru and Indore are demanding ‘Butter Belle’ yellows and muted charcoal tones over traditional brights. This shift reflects a multifaceted identity where comfort meets cultural depth.
AI: The new tailor for retail efficiency
To manage the logistical complexity of 150-store networks, premium labels are integrating Generative AI to predict regional trends with 20 per cent-50 per cent greater accuracy. By 2026, AI is no longer a luxury but a core operational pillar, automating everything from fabric defect detection to hyper-personalized ‘visual search’ where customers upload photos to find matching styles. Industry data suggests that retailers combining this tech-driven personalization with a disciplined ‘phygital’ (physical + digital) model are seeing 11 per cent Y-o-Y sales growth, particularly as they tap into the rising financial independence of the female workforce.
Margin-led expansion over volume
The 2026 retail roadmap is shifting from purely chasing volume to a margin-led recovery. Despite rising rentals and a 12 per cent retail talent shortage, brands are finding a ‘silver lining’ in GST rationalization and income tax relief. This fiscal cushion is enabling premium players to earmark significant capital - often upwards of Rs 20 crore - for aggressive offline footprints. By focusing on high-consumption urban centers and tourism-led shopping districts, the sector is successfully bridging the gap between value-driven ‘Bharat’ and the affluent urban elite.
Chique: Redefining premium fusion wear
Chique is a Delhi-founded premium womenswear brand specializing in Indo-Western fusion. Targeting urban professionals across India and the UAE, the label is scaling to 150 stores by 2028. With an ARR goal of Rs 150 crore for 2026, Chique leverages AI to blend artisanal craftsmanship with modern logistics.
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