IMPRESSIONS from a Cross-section

Factors like changing fashion trends, growing consumer class and rising urbanisation have led to the growth in the apparel industry in the recent years. Increasing retail penetration, growing service class and the increasing share of the designer wear have also been the drivers for growth.

However, on account of overall slowdown in the economy, the apparel industry witnessed a lower growth in the past couple of years. The industry is estimated to have grown at a lower rate of about 4-5 per cent Y-o-Y in FY13.

But factors like recent policy reforms, revival in economy and entry of new brands are expected to support recovery of apparel demand in FY14 (based on Care Research report). According to this report the domestic apparel industry will grow at a CAGR of about 8 per cent from Rs. 2,02,600 crore in FY12 to Rs. 2,74,600 crore in FY15. The various policy measures/means which are expected to aid in recovery in apparel demand in FY14 include resumption of zero excise duty on readymade garments and made ups announced in the Budget 2013-14. Expected revival in the economy in FY14 will in turn help boost demand for apparels and aid faster clearance of investment proposal of foreign retail brands.

Also, talks on FTA (Free Trade Agreement) between India and Europe have been going on and we can expect 8-10 per cent growth from last year's levels in readymade garment exports in FY 2014 to Rs. 80,000 crore (USD 17 billion). Due to the weakness of the rupee, our exports are expected to rise further in rupee term.