ICRA expects Indian garment industry's revenues to grow 12-14% in FY25

The benefits from the China Plus One vendor strategy and improvements on the back of inventory liquidation at importers' end will support the growth. However, with increase in labour and inflation in other operating costs, operating margins are expected to moderate by 50-75 bps, ICRA noted.

After witnessing a 10-per cent year-on-year (YoY) contraction in Indian apparel exports to $14.5 billion in FY24, Indian apparel exports grew by 11.6 per cent YoY in the first ten months of FY25, with the liquidation of inventory at retailers' level and benefits from the China Plus One strategy, according to ICRA.

The country’s apparel exports to the United States rose by 13.8 per cent YoY and to the European Union (EU) and the United Kingdom increased by 11 per cent YoY in the first nine months of FY25.

Besides, the depreciation of the rupee against the dollar resulted in exports in INR terms increasing by additional 160 basis points (bps) in those nine months, ICRA said in a release.

Inorganic and greenfield expansions by select players in ICRA’s sample set led to an increase in capital expenditure (capex) investments in FY24. Capex spending is estimated to remain elevated in FY25 and moderate in FY2026.

Fibre2Fashion News Desk (DS)