Archive · 10 Sep 2026
India’s Apparel Retail Growth Seen Moderating To 12-13% In FY27
India’s organised clothing stores are expected to grow more slowly this year.
Their sales may rise by 12-13%, compared with 15% last year.
Many shoppers are spending their extra money on things besides clothing.
Lower-priced clothing, called value fashion, is helping retailers attract price-conscious customers.
Stores are also opening in smaller cities where organised retail is less common.
Higher cotton prices and other costs may make it harder for retailers to earn profits.
The festive shopping season will be especially important because it usually brings about 35% of yearly clothing sales.
Retailers are using both physical shops and online channels to reach customers.
They are expected to spend about Rs 2,500 crore on expansion this year.
India’s organised apparel retail sector is projected to grow 12-13% in FY27, down from 15% last fiscal.
Value fashion and expansion into tier-II and tier-III cities are expected to support growth.
Higher cotton prices, operating costs and competition could reduce operating margins to about 14%.
Festive-season sales, which typically represent nearly 35% of annual apparel revenue, will be crucial.
Capital expenditure is expected to remain broadly stable at around Rs 2,500 crore.
- Who
- India’s organised apparel retailers, with value-fashion retailers expected to lead growth.
- What
- The sector is projected to grow 12-13% in FY27, while operating margins are expected to decline to about 14%.
- When
- FY27; the report was dated September 10, 2026, with revenue trends covering April through August 2026.
- Where
- India, including expansion into tier-II and tier-III cities.
- Why
- Growth is being supported by value fashion, branded-apparel demand and smaller-city expansion, while diversified consumer spending is moderating overall growth.
- Projected FY27 growth
- 12-13%
- Previous fiscal growth
- 15%
- Expected operating margin
- About 14%, down roughly 100 basis points
- Festive-season sales contribution
- Nearly 35% of annual apparel sales
- Revenue per square foot
- About Rs 11,000 over the past three fiscal years
- Expected capital expenditure
- Around Rs 2,500 crore
- Key growth driver
- Value fashion