Premiumization drives retail growth as India's consumption hits 6.7%
25 November 2025, Mumbai
India’s robust economic outlook, highlighted by S&P Global Ratings’ forecast of consumption-led GDP growth reaching 6.7% in FY27, is triggering a major transformation in the apparel retail sector. Driven by tax relief and rising disposable income among the middle class, consumer spending is shifting decisively towards branded and quality fashion, a trend known as premiumization. The Indian fashion retail market, valued at over $60 billion in 2024, is now projected to hit $124 billion by 2030, surging at a 12.87% CAGR. Crucially, growth is no longer confined to metros; Tier II and III cities currently account for nearly 40% of apparel sales, compelling retailers to aggressively expand their organized footprints in these aspirational markets.
EBO expansion strategy pays off
Domestic brands, prioritizing localized fit and cultural relevance, are leading this charge. A prime case study is Spykar, established in 1992, which built its reputation on denim tailored for Indian body types. The company is executing a definitive growth plan to expand its exclusive brand outlets (EBOs) to over 400 by FY26, leveraging its deep understanding of the youth market. As Gautam Saraf, Executive Managing Director at Cushman & Wakefield, noted recently, this trend reflects "a broader trend of premiumisation and experiential retail." While the challenge remains managing high street costs, with prime locations seeing rental growth averaging 6% year-on-year, the strong consumer appetite for high-quality, organized retail justifies the investment.
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