Introduction: 

India is known for its high quality garments for men and most of the garment manufacturers are in the Small
and Medium-large scale industry. Indian sub-continent is the second largest manufacturer of garments after
China being the global leader in garment production. 

Indian men's clothing industry has been developing steadily and rapidly over the past few years, this has been
possible owing to the Indian male becoming more fashion conscious, and hence there is more consumption
which has increased the international demand of men's garments by the rest of the world. Men’s shirt, trousers,
blazer-suits, sherwanis, wedding-suit, business-suit, sports-suit, kurti-suits are made in different sizes to cater
the need of the customers both in export and domestic market.

Readymade Garment Industry in India

Indian women’s ready-made garment industry making fashionable garments to cater the need of their
customers. salwar-kameez, churidar-kurtis, Patiala-salwar, pyjama-suit, midi-top, gowns, nighty, leggings, jeans
trousers, casual-shirts, formal-pant and shirts,indian saree blouse,designers wedding blouses are produced
in ready-made garment industries in India. 

India Garment Industry has an advantage as it produces men, women. And children’s garments. both exports
stylish and domestic garments for men at budget-oriented prices due to affordable labour rates with competitive
perspectives. Today the by the way of Technological advancement and use of modern machinery it has enabled
the manufacturers to achieve better quality and well-designed, fashionable garments. 

India's Garment Industry has been rapidly &steadily growing in last ten years. Exports have been rising as there
is an increase in orders from international buyers accompanied by a rise of investments in the garment sector of
the country. The Indian Garment Industry is of major importance to the Indian economy as it contributes
substantially to India's export earning, it is estimated and analyzed that one out of every six households in the
country depends on this sector either indirectly or directly for its livelihood. From all over the world the
Retailers also increasingly come to India attracted by low production costs. The large brands among them are
Wal-Mart, Tesco, and M&S. 

India's Garment Industry was a un-organized sector a few decades ago, but now this is considered to be the
well-organized sector and among the best in the world. It constitutes of skilled fashion designers, dedicated
manufacturers, exporters, suppliers, stockist, retailers,and wholesalers. Indian Garment Industry has carved out
a niche in the international markets and earned a reputation for its durability, quality and appearance. Today's
changing consumer preferences - buying branded apparel and fashion accessories, major boom in the garment
retail industry, people shopping at department and discount stores, shopping malls, with rising disposable
incomes, government policy focused on fast-track textile export growth, and ambitious goals have created
several investment opportunities in India. 

Government has even made effort to include benefits for Garment Industry. The annual plan for 2007-08
formulated by Indian government to promote the textile sector of India, includes schemes for attracting foreign
direct investments, brand promotion through public-private partnership (PPP) for global acceptance of Indian
brands, trade centers for facilitating business and image building, fashion hubs as a stable marketplace for
Indian fashion, common compliance code for creating apparel standards for the benefit of buyers, and training
centers for developing human resources. Indian garment industry`s has a decentralized production structure -
subcontracting, which is low risk and low capital-has served the industry well but has excluded Indian products
from the mass market for clothing, which demands consistent quality for large volumes of a single item. 

Market Capitalization 
India's Garment/ Apparel Market Size
INDIA'S APPAREL MARKET SIZE
2002 2003 2004 2005
Volume Volume Volume Volume
('000 Value ('000 Value ('000 Value ('000 Value
units) (Rs.Cr,) units) (Rs.Cr,) units) (Rs.Cr,) units) (Rs.Cr,)
Mens Wear 1254370 23335 1297220 26090 1342140 29135 1393639 32590
Womens
wear 1236880 19130 1300610 21730 1368310 24680 1443113 28375
Unisex
Apparel 417810 4215 434340 5240 452020 5835 470978 6615
Kidswear 1139870 9950 1180290 10810 1222280 11745 1268933 13085
Uniforms 372960 4660 397210 5460 423020 6345 456862 7675
TOTAL 4421890 61290 4609670 69330 4807770 77740 5033524 88340
 Today India is booming with fashion and lifestyle, with the organized retail trade growing at a rate of
30% per annum.
 The Indian apparel or Indian garment industry is pegged at more than 90,000 crores with nearly 13%
growth per annum.
 The men's garment or clothing segment constitutes nearly 45 % of the total apparel market and growing
at a constant rate each year.
 The share of organized branded segment in men's wear is fast increasing in the Indian apparel market.
Domestic and Export Share 
Indian Garment Sector earns high export revenue, it has witnessed substantial profit accruing to retailers and
Indian manufacturers are reflected in garment workers' wages.

Graph of domestic & export

In 2004, Asian trade in the Garment Industry was to the tune of 138 billion US dollars. 

In Bangalore itself there are large retail chains from the US and Europe - like GAP, Walmart, Tommy Hilfiger
and JC Penny - have outsourced orders to large factories to the tune of 269.6 million US dollars in 2005. 

In 2006, India's textile industry (including garments) contributed 14% to industrial production, 4% to GDP,

and 17% to export revenues which directly employed 35 million people including women and backward classes.
Apparel exports totaled Rs 50,479 crore in 2009-10 compared to Rs 50,293 crore in 2008-09. But in dollar
terms, all months of 2009-10 except July, August and November showed a painful downslide due to the
exhausted quota system, and to face the tuff competition of china. . 

Employment Opportunities 
Indian Garment Industry is closely connected to the fashion industry and steadily grows hand in hand. With
these even opportunities for the employment is also increasing to a larger level. These high levels of fashion
consciousness has created the need for candidates who are highly productive, efficient and have a passion to
create new designs and give way to creativity. 

This Industry demands and requires both skill and diligence. India is an ultimate combination, like it has a
matured garment industry for a long time along with a vast trained manpower. Some of the key areas to work
are related to fashion and apparel design and manufacturing, merchandising, import export according to the
government policies, freight and shipments etc. Work as a designer, or a start up a business in the local market
and expand the business to the others areas of the national market. 

List of Top Leading Companies Producing Ready-made Garments in

India:
1. Pantaloon Retail India Ltd
2. Shopper's Stop
3. Tata - Trent
4. Globus stores Pvt Ltd
5. Pirmayd Retail Ltd
6. Arvind Brands Ltd
7. Pro vogue India Ltd
8. The Raymond Group
9. Madura Garment
10. Reliance Retial Ltd
11. Wills lifestyle
12. Murjani Group
13. Landmark Group
14. Gokaldas Group
15. Zodiac Clothing
16. Peter England
17. Van hausen
Recent Developments of Garments Industry in India
 In southern India's Tirupur town, young girls are engaged to work in the knitted garment industry with a
promise of 'golden opportunity' to earn their own dowry at the end of a three-year apprentice period.
 Knitted Garment industry of Tirupur projects a turnover of Rs 10,000 crore this year, down from Rs
11,000 crore in 2006-07, thanks to the falling dollar.
 The industry employs 400,000 workers regularly and an additional 500,000 seasonally where most of
them women and teenaged girls.
 The Indian Garment industry is today modernized via an exclusive scheme, which has set aside $5bn for
investment in improvisation of machinery.
 International brands like the Levis, JC Penny, Wal-Mart, Gap, Marks & Spencer and other industry
giants are sourcing more and more fabrics and garments from India.
 According to a study China and India will be major gainers. Where India could increase their share from
present 8 % in US textile market to 13.5% and from 3% to 8% in US Garment market.
 Morgan Stanley has projected India to be one of top three exporters of textile and garments.
 Indian Cotton Mills Federation study has estimated Indian textile exports to reach US $ 40 Billion by
2010 and 12.5% share in the Indian Commodity export basket.
 However, the garment industry in India faces stiff competition from countries such as Bangladesh,
China and Vietnam. There is a pressure on the Indian garment industries to produce finished garments at
lower costs to survive the cut-throat competition.
 Today, around 45% of the total textile exports in India account for ready-made garments.
 Garment Industry in India is looking at achieving an export target of $25 billion- an Apparel Export
Promotion Council (AEPC) official said.
 The garment industry today would need an additional 1.5 million people .
 An investment of Rs. 35000 crore in terms of related infrastructure is required .
 AEPC plans to set up 50 training centers besides the 22 centers it has at present across the country.
To give quality education in garment making, many technical educational institutes, colleges, are available in
India, after completing their relevant course, they can be recruited in ready -made garment industries &export
garment manufacturing industries. More number of small industrial entrepreneurs is growing with prosperity.
Government loan facilities are available to establish the readymade garment industry. 

References: 
1. Articles on Garment industry published in THE HINDU-Leading English news -paper.
2. Articles on Garment &fashion industry published in monthly magazine -VALAR THOZHIL.-Tamil
leading monthly magazine. many articles are contributed by me since the year 2000.

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Last Updated: June, 2019
Introduction
India’s textiles sector is one of the oldest industries in Indian economy dating back several centuries. India's overall textile exports during FY
2017-18 stood at US$ 39.2 billion in FY18 and is expected to increase to US$ 82.00 billion by 2021 from US$ 31.65 billion in FY19*.
The Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at one end of the spectrum, while the
capital intensive sophisticated mills sector at the other end of the spectrum. The decentralised power looms/ hosiery and knitting sector form the
largest component of the textiles sector. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient
culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of other countries.
The Indian textile industry has the capacity to produce a wide variety of products suitable to different market segments, both within India and
across the world.
Market Size
The Indian textiles industry, currently estimated at around US$ 150 billion, is expected to reach US$ 250 billion by 2019. India’s textiles industry
contributed seven per cent of the industry output (in value terms) of India in 2017-18.It contributed two per cent to the GDP of India and
employs more than 45 million people in 2017-18.The sector contributed 15 per cent to the export earnings of India in 2017-18.
The production of raw cotton in India is estimated to have reached 36.1 million bales in FY19^.
Investment
The textiles sector has witnessed a spurt in investment during the last five years. The industry (including dyed and printed) attracted Foreign
Direct Investment (FDI) worth US$ 3.09 billion during April 2000 to December 2018.
Some of the major investments in the Indian textiles industry are as follows:

 In May 2018, textiles sector recorded investments worth Rs 27,000 crore (US$ 4.19 billion) since June 2017.
 The Government of India announced a Special Package to boost exports by US$ 31 billion, create one crore job opportunities
and attract investments worth Rs 800.00 billion (US$ 11.93 billion) during 2018-2020. As of August 2018, it generated
additional investments worth Rs 253.45 billion (US$ 3.78 billion) and exports worth Rs 57.28 billion (US$ 854.42 million).

Government Initiatives
The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in
the Indian textiles sector under the automatic route.
Initiatives taken by Government of India are:

 The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from India
Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4 per cent.
  As of August 2018, the Government of India has increased the basic custom duty to 20 per cent from 10 per cent on 501
textile products, to boost Make in India and indigenous production.
 The Government of India announced a Special Package to boost exports by US$ 31 billion, create one crore job opportunity
and attract investments worth Rs 80,000 crore (US$ 11.93 billion) during 2018-2020. As of August 2018 it generated additional
investments worth Rs 25,345 crore (US$ 3.78 billion) and exports worth Rs 57.28 billion (US$ 854.42 million).
 The Government of India has taken several measures including Amended Technology Up- gradation Fund Scheme (A-TUFS),
scheme is estimated to create employment for 35 lakh people and enable investments worth Rs 95,000 crore (US$ 14.17
billion) by 2022.
 Integrated Wool Development Programme (IWDP) approved by Government of India to provide support to the wool sector
starting from wool rearer to end consumer which aims to enhance the quality and increase the production during 2017-18 and
2019-20.
 The Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme
named 'Scheme for Capacity Building in Textile Sector (SCBTS)' with an outlay of Rs 1,300 crore (US$ 202.9 million) from
2017-18 to 2019-20.

Achievements
Following are the achievements of the government in the past four years:

 I-ATUFS, a web-based claims monitoring and tracking mechanism was launched on April 21, 2016.
 381 new block level clusters were sanctioned.
 20 new textile parks were sanctioned
 Employment increased to 8.62 million in FY18 from 8.03 in FY15.

Road Ahead
The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With
consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade with the entry of several
international players like Marks & Spencer, Guess and Next into the Indian market.
High economic growth has resulted in higher disposable income. This has led to rise in demand for products creating a huge domestic market.
Exchange Rate Used: INR 1 = US$ 0.0139 as of Q3 FY19.
References: Ministry of Textiles, Indian Textile Journal, Department of Industrial Policy and Promotion, Press Information Bureau
Note: * till January 2019, ^ - during the cotton season October–September
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same
Last Updated: May, 2019
The textile and apparel industry can be broadly divided into two segments - yarn and fibre, and processed fabrics and
apparel. The domestic textile industry in India is estimated to reach US$ 223 billion by 2021F from US$ 150 billion in
November 2017, while cotton production in India is have reached 36.1 million bales in FY19.^ In FY19, growth in private
consumption is expected to create strong domestic demand for textiles.#
Increased penetration of organised retail, favourable demographics, and rising income levels are likely to drive demand
for textiles. Cloth production stood at 58.1 billion square metres (provisional) in FY19P*. India is the world's second largest
exporter of textiles and clothing.
Textile and apparel exports from India are expected to increase to US$ 82 billion by 2021. Exports of textiles and apparels
from India reached US$ 31.65 billion in FY19*. Manmade garments remain the largest contributor to total textile and
apparel exports from India.
Rising government focus and favourable policies is leading to growth in the textiles and clothing industry. The Ministry of
Textiles is encouraging investments through increasing focus on schemes such as Technology Up-gradation Fund
Scheme (TUFS). Under the Union Budget 2018-19, Rs 2,300 (US$ 355.27 million) crore have been allocated for TUFS
and Rs 30 crore (US$ 4.63 million) for the Scheme for Integrated Textile Parks, under which there are 47 ongoing
projects. In May 2018, textiles sector recorded investments worth Rs 27,000 crore (US$ 4.19 billion) since June 2017.The
Cabinet Committee on Economic Affairs (CCEA), Government of India has approved a new skill development scheme
named 'Scheme for Capacity Building in Textile Sector (SCBTS)'. The Government of India announced a Special Package
to boost exports by US$ 31 billion, create one crore job opportunities and attract investments worth Rs 800.00 billion (US$
11.93 billion) during 2018-2020. As of August 2018 it generated additional investments worth Rs 253.45 billion (US$ 3.78
billion) and exports worth Rs 57.28 billion (US$ 854.42 million). Cumulative FDI in the Indian textiles reached US$ 3.09
billion between April 2000 to December 2018. Under Union Budget 2019-20, Government of India allocated around Rs
5,831.48 crore (US$ 808.24 million) for the Ministry of Textiles.
The Directorate General of Foreign Trade (DGFT) has revised rates for incentives under the Merchandise Exports from
India Scheme (MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4
per cent. As of August 2018, the Government of India has increased the basic custom duty to 20 per cent from 10 per
cent on 501 textile products, to boost Make in India and indigenous production .
The readymade garment industry in India has historically been one of the most important segments
of the textile industry in India. The Indian readymade apparel market is one of the largest
contributors to India’s economy, providing millions with employment while making significant
contributions to India’s annual GDP and export earnings. Today, India is the world’s 6 th largest
exporter of readymade garment products, registering over US$17 billion in readymade garment
export value annually. Combining global demand that is at an all-time high, with much stronger
support and preferential policies from the government, India’s readymade garment (RMG) industry is
set to achieve rapid growth in the future.

Overview of the Readymade Garment Industry in India

According to recent statistics from IBEF, India’s textile and apparel industry contributes over 14% to
industrial production, 4% to India’s Gross Domestic Product (GDP) and constitutes 15% of the
country’s export earnings, employment in the industry topped 51 million people directly and 68
million people indirectly, in 2015-16.

The readymade garment sector is currently the largest contributor to India’s total textile and apparel
exports, accounting for roughly 41%. Employment in India’s readymade garment industry now has
around 12 million people, making it the largest employment provider for all sectors. This year, this
number will increase to 12.9 million. Most of the workers employed in the readymade garment
industry in India are women and mainly contributes about 4% of the Gross Domestic Product or GDP
of India.

Read more: 20 Latest Figures and Facts About Textile and Apparel Industry in India

Garment Manufacturing Process Trends Being Led By India

Currently, India has around ten major manufacturing hubs for readymade garment products. These
key segments specialize in producing a wide variety of garments. Tirupur, also known as India’s “T-
shirt Town”, located in the southern state of Tamil Nadu, operates with 1500 units, producing the
finest knitwear garments. On the northern part, Noida, Gurgaon and Delhi have also evolved to
become some of the largest readymade garment industry hubs for massive production, as well as
exports of garments for children and women. Indore and Ludhiana are another two renowned hubs
for manufacturing high-quality readymade garments; while Bareily is also well acknowledged around
the world around readymade garment manufacturing base.

Must Read: Top 10 Shoe Companies in India for 2018

Growth of the Indian Garment Industry

Over the decades, the readymade garment industry in India has been recognized around the world
for its low labor cost, availability of skilled workers, and the ability to process orders in bulk; this level
of volume production has created intrinsic value for the wholesale market of readymade garments.
Therefore, an increasing number of famous international fashion brands, such as Zara, H&M, and
Gap, are all manufacturing or importing readymade garments from India. The demand for garment
products made by India’s leading readymade garment manufacturers is also rapidly growing in the
global market.

So far, some 0f the major markets where India’s readymade garments are in high demand are UK,
Germany, Italy, Bangladesh, France, Turkey, and Spain. Aside from demand from the international
market, India’s exclusive fashion has certainly undergone quick changes over the years. This has also
essentially boosted the industry’s expansion at an even faster pace.

Read more: Top 10 Leading Garment Manufacturers in Bangladesh

In order to further boost India’s readymade garment industry, the Indian government has also
issued many proactive policies to support its future. Apart from the major Free Trade Agreement
(FTA) with the European Union, Trans-Pacific Partnership (TPP), and other favorable plans for
readymade garment exports, the Indian government has also allocated a sum of over Rs. 2,200 crore
incentives and subsidies to its readymade garment sector since 2016. Many industry experts believe
that with the strong support from the government, the readymade garment industry in India is
expected to have a more promising future.

As we move towards a future of new garment technology, it’s imperative that India’s best textile
companies continue to find innovative new ways to drive value to the market. Based on how trends
are shaping up and India’s already proven track record in the global textiles sector, where do you see
the readymade garment industry in India heading by the end of 2017? Or, even a few years down the
road? Can it move up the ladder from its 6th place position as a global garment exporter and
manufacturer?

Thousands of India’s leading readymade garment companies can be in your contact list if you
register to join BizVibe today! Whether you are looking reliable suppliers, top garment
manufacturers, wholesalers, and potential customers in over 90 major countries, or finding out what
your competitors are buying and which suppliers they’re using, BizVibe can help you reach out to
sales prospects and decision-makers in the apparel industry across the globe.

Executive Summary
The Indian readymade garment (RMG) sector is estimated at USD 45 billion (about 30% of the textile and apparel
industry). Of this, the domestic market is around USD 27 billion (~60 per cent), and exports stand at about USD
16.71 billion in FY 2018. India is the world's sixth largest RMG exporter .
The demand and supply scenario in the domestic RMG industry looks encouraging. The market will be driven by
growing population, rising disposable incomes, organised retail and increasing preference for branded garments.
The industry faces moderate competition risk in the overseas market from countries like Vietnam, China,
Bangladesh among others.
The primary risk for the industry is input cost related, viz., availability of raw materials and cheap skilled manpower,
rising power and fuel costs and high transportation costs.
Apparel exports are expected to fall by 5.2 per cent to a five year low of USD 15.8 billion in 2018-19. This would be
the second consecutive year of fall in apparel exportson account of reduction in duty drawback rates and rebate on
state levies with effect from October 1, 2017. However, Acuite believes that the Indian RMG industry will register an
overall healthy growth in FY 2018-19 on the back of boost in domestic consumption and favourable government
policies. While the global demand for Readymade garments is growing, the cost competitiveness is hampering the
Indian players to compete with players from Vietnam, Bangladesh, Pakistan, Taiwan, Indonesia and Sri Lanka.
With rapid advancement in technology and increasing price competition from the other international players, Indian
RMG manufacturers will be required to make additional capital expenditure on upgrading their manufacturing
facilities. There is a lot of scope for mechanisation and modernisation to tap the apparel market, by moving more
onto apparel exports rather yarn and cotton.

Key Risks & Attributes

  Domestic market sensitive to consumer spends, linked to overall economic cycles
 Forex fluctuation risk as exports form a significant portion
 Dependence on the United States(US) and European markets; export policies
 Raw material (especially cotton) price fluctuations
 Availability of cheap skilled labour
 Risk of technology change and associated capital costs for upgradation

Demand & Supply Scenario

4/6
The Indian textile and apparel industry contributes to 4% of the country's gross domestic product, 12% to
export earnings, over 14% to industrial production, and employs over 45 million people, largest source of
employment generation. Apparel industry alone employs about 13 million workers. India's Ready made Garments
(RMG) exports to overseas markets in FY 2018 was to the tune of USD 16.71 billion versus USD 17.38 billion in FY
2017, a decline by 3.83 per cent.The primary reasons causing decline in production and exports are – reduction in
duty drawback and Rebate on State Levies (RoSL) after the imposition of Goods and Service Tax (GST), working
capital blockage on account of slow or delayed refund of GST and uncertainty about the export subsidies going
forward. Apparel exports are expected to fall by 5.2% to a five year low of USD 15.8 billion in FY 2018-19. This
would be the second consecutive year of fall in apparel exports. Apparel exports had fallen by 3.8% in FY 2017-18.
Exporters are facing an acute shortage of working capital because they have not received refunds on input taxes
from the government.
While global demand is good for the apparels, whereas the cost competitiveness is hampering the Indian players to
compete with players from Vietnam, Bangladesh, Pakistan, Taiwan, Indonesia, Srilanka as most of the nations are
enjoying Generalised System of Preference(GSP ~ duty drawback on taxes) and GSP plus (~ duty free and at
preferential rate) status granted by European Union (EU). EU's 'Everything But Arms' scheme offers duty free
access to 49 Least Developed Countries (LDC's) excluding India is a challenging environment for India. Also, China
encouraging Vietnam to supply more of yarn (which in turn source cotton from India for manufacture of yarn), and
levying duty on import of yarn from India is disadvantageous for Indian cotton exporters, as well as RMG players to
compete with Vietnam in global markets.On the exports front, India is the world's sixth largest exporter of RMG
products. Of the apparel exports, revenue contribution from men's wear and women's wear is about 40 per cent
each, and 20 per cent from kids wear.
The RMG industry in India is recognised around the world for availability of all types of raw materials, low labour
cost, availability of skilled workers, superior quality and the ability to process orders in bulk. This has led to an
increasing number of famous international fashion players to either manufacturing or importing RMG from India.
Free trade with ASEAN countries and proposed agreement with the European Union are also expected to boost
exports. Also, the Clothing Manufacturers Association of India has signed a memorandum of understanding with the
China Chamber of Commerce for Import and Export of Textiles to explore potential areas of mutual co-operation for
increasing apparel exports from India. The Apparel Export Promotion Council, an official body of apparel exporters
in India, provides invaluable assistance to Indian exporters as well as importers.
The size of textile and apparel industry in FY 2018 was USD 150 billion; about USD 110-115 billion domestic
market(70-75%), and USD 35-40 billion through exports (25-30%).Of the total textile and apparel exports,
Readymade garments comprised about 40% (USD 16.7 billion). India aims to double the annual revenues of the
Industry by year 2025. This is possible with additional investment in value added products of apparels, rather export
of yarn and cotton which are low value; this also will curtail our competitors in the international domain to compete
with us like Vietnam, Bangladesh who majorly depend on India for cotton and yarn. Also, systematic changes in
consumer spending behaviour impacting the spending on RMG – as the choice and flexibility to wear any kind of
casual clothing including office, has become the practice across.
The RMG industry can be categorised into menswear, womenswear, kidswear, sportswear, innerwear, knitwear, etc.
Menswear is the largest segment. The Ministry of Textiles projects the kidswear segment to capture larger market
share by the end of 2021. The market is also segmented by price sensitivity – high end for the affluent, medium
priced for the core and high middle classes, and low end for the low and core middle class. Denim holds a
prominent place in India's RMG market and accounts for approximately 5% of the market . The increasing demand
for denim is driven by its comfort and style, preference amongst youth and increasing usage by women and youth in
smaller cities and rural India.
Over the years, the domestic RMG market has witnessed high growth, led by growing population, rising disposable
income, organised retail and increasing preference for branded garments. Further, Indian consumers are
increasingly preferring RMG as standardised products are available at relatively low prices. The Indian online
fashion market is gaining momentum with the entry of Indian and global fashion designers and growing brand and
quality consciousness among the 16-35 year olds. Also, due to rapid digitalisation and growth in the e-commerce
segment, the market, valued at USD 7-9 billion, is expected to grow to USD 30 billion by FY 2019-20 . This would
further aid demand growth in the RMG industry. With the growth in demand for fashionable garments and e-retail
gaining traction, the branded garments segment is expected to grow to 48% of the overall RMG industry in FY 2018-
19 .
The domestic RMG industry faces significant risk of change in consumer preferences. Consumers have become
more fashion conscious and are constantly looking for unique and better products. This has resulted in cyclical
demand based on seasons and festivals. Thus, manufacturers face the risk of holding unsold inventory if they are
unable to forecast future demand based on fashion trends and respond in a timely manner to cater to the market.
Acuité expects that demand for fashionable and branded garments due to favourable demographics and
disposable income will provide a favourable environment for the RMG industry - both for the domestic as
well as export markets.

Nature & Extent of Competition

3/6
The RMG industry is fragmented with a large number of small and medium enterprise (SME) manufacturers.
Further, entry barriers are low. Competition emerges not only from the organised sector but also from the
unorganised sector, from both small and big players, as well as international and local brands. This leads to
pressure on pricing, product quality and constant demand for newer purchases.This has led to no particular player
gaining large market share.
Among established players, competition is primarily between established brands and private label brands. Large
players are focusing on both forward and backward integration by entering the entire value chain. Major clothing
brands have better bargaining power compared with textile manufacturers, on account of product differentiation is
low, large number of players, and fragmented industry. There is increased focus on cost cutting, development of
new markets and maintaining product quality. However, sales levels and margins depend upon the ability to sense
fashion changes and respond rapidly. Mergers and acquisitions in the sector have also been picking up pace.
On the exports front, the overall RMG industry faces the risk of economic downturn and volatility in global markets.
China is pushing its products through Bangladesh into Indian market, and Vietnam becoming competitive with more
support drawn from China will be the major beneficiaries in Indian market. India, thus faces tough competition from
China (strong infrastructure and technologically more advanced) and Bangladesh (cheap labour, free trade policies
and lower fuel costs). Bangladesh and Pakistan has zero-duty access for textile exports into the European Union,
which gives it a clear edge over India in the exports market. Also, the Indian government's unilateral trade initiative
of opening its door for duty free trade of textile items from Bangladesh, would adversely affect the RMG industry.
Acuité believes that the competitive landscape in the RMG industry will continue to be moderate with a
large number of players and pressure on pricing and product quality, especially in the export markets.