Market Estimates

Market Size of Indian Textile Industry (2006) - US$ 52 bn; CAGR - 13%

Market Size of Indian Textile Industry (2012) - US$110 bn; CAGR -13%

Market Size of Domestic Market (2006) - US$ 34.6 bn; CAGR -10%

Market Size of Domestic Market (2012) - US$ 60.0 bn; CAGR - 10%

The cloth production is expected to grow at an annual rate of 13% and garments at the rate of 19%.

Further, with the reduction in tariffs and the proliferation of Regional Trade Agreements and Free Trade Arrangements, the distinction between the domestic markets and international markets will be narrowed considerably.

Manufacturing firms have recognized this trend, which has resulted in vast improvements in the quality of goods produced for domestic markets, which is on par with international standards.

With consumers becoming aware of fashion trends worldwide, demand for branded products has been increasing. In fact available data in India shows a vast & significant shift to branded products in preference to tailor made products.

Expansion of Retail Networks

The increase in GDP per capita, availability of higher disposable income, greater use of credit cards, more working female population have allied to a greater penetration of organized retail network in India. The organized retail industry in India is amongst the fastest growing retail sectors in the world growing at a rate of 22% per annum adding approximately 25 million consumers each year. The sector is expected to increase its penetration from the present 3% to 12%-15% by the year 2012.

Consequently, awareness about brands will also increase to smaller cities and semi-urban areas (Tier II and Tier III cities) with organized retailers now targeting the rural markets. The expansion of retail networks with their growing emphasis on "lean retailing" i.e. maintenance of low inventories and "rapid replenishment" of merchandise and "full packaging" i.e. one-stop sourcing from "fabrics to fashion" has further encouraged consolidation and integration in the Indian textile industry.

Localisation of Global brands

India is expected to grow at about 8% until 2020 according to a new report by Goldman Sachs and overtake the economies of Italy, France and the UK by 2017 and emerge as the largest economy in the world after China by 2042.

Considering these prospects and the ongoing rapid globalization of the Indian economy, a large number of foreign brands are jostling for shelf space trying to catch the fancy of Indian consumers.

Further, the present policy permits 51% FDI in single brand retailing which may, in future, be extended to multiple brands. With the entry of major corporates in India into the retailing sector, the demand for international brands is expected to expand exponentially thereby not only popularizing the global brands, but also localizing them.

Emergence of Local Brands

Another interesting feature of the Indian Market is the emergence of local brands. All the leading textile and apparel firms have introduced domestic brands and are increasingly positioning themselves within the various segments in the domestic market. Prior to 2000, there were around 5-6 brands in India, prominent amongst them being Zodiac, Monte-Carlo, Raymond, Bombay Dyeing.

The market size of branded wear has since expanded on account of the continued increase in purchasing power, rapid increase in the consuming class, coupled with reduction in import tariffs. The competition has thus intensified in the Indian market with all the major producers of textiles and clothing products in India now working towards building local brands.

Some of the brands built in recent years are "Pantaloon", "Killer" Jeans, "Easios", "Tibre", "Colour Plus", ''Trigger" etc. Many of these brands have now reached a stage where they can look towards gaining a regional, if not a global presence.