According to ICRA report, Indian apparel exporters are projected to post a revenue growth of 9-11 per cent in FY25. This growth will be driven mainly by gradual liquidation of retail inventory in key markets and shift of global sourcing towards India as a risk mitigation strategy. Exports in FY24 were impacted due to high inventory, slow demand, supply chain problems and stiff competition from neighbouring countries.
The report suggests that the long-term outlook is favourable, with government measures such as the Production Linked Incentive (PLI) scheme, export incentives and potential free trade agreements with the UK and EU contributing significantly.
The US and EU regions, which account for two-thirds of the $9.3 billion exports in 2023, remain the primary destinations for Indian apparel. In the first half of FY25, apparel exports grew 9 per cent year-on-year.
However, challenges such as uncertainty of demand in some markets, geopolitical issues and rising labour costs remain. Despite this, ICRA believes that the PM Mega Integrated Textile Region and Apparel Yojana will further strengthen India’s presence in the global market.