Indian apparel exporters are expected to register a revenue growth of 9-11 per cent in FY2025, stated a report by ICRA. This, it added, will primarily be driven by the gradual liquidation of retail inventory in the key end markets and a shift in global sourcing to India, a part of the de-risking strategy adopted by several customers. This will be followed by a tepid performance in FY2024 when exports were affected because of high retail inventory, sluggish demand from the key end markets, supply chain issues (including the Red Sea crisis) and heightened competition from neighbouring countries.
Per the report, the long-term prospects for Indian apparel exports are favourable and this will be aided by enhanced product acceptance in end markets, evolving consumer trends and a boost from the Government in the form of the production-linked incentive (PLI) scheme, export incentives, the proposed free trade agreement with the UK and the EU, among others. Further, with the revival in demand, ICRA said that the capex spending is expected to increase in FY2025 and FY2026 and may stay in the range of 5-8 per cent of the turnover.
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At $9.3 billion (in CY2023), the US and the European Union (EU) region account for over two-thirds of apparel exports from India and remain the preferred destinations. While headwinds persist in certain end markets because of geopolitical tensions and macroeconomic slowdown, there has been a gradual recovery in apparel exports from India in the current year. In H1 FY2025, apparel exports grew by around 9 per cent on a YoY basis to $7.5 billion on the back of a gradual liquidation of inventory, a shift in global sourcing to India as a part of de-risking strategy adopted by several customers and a higher order booking for the upcoming spring/summer.
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Srikumar Krishnamurthy, Senior Vice President &
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