India’s apparel and fashion retail market demonstrated significant resilience through the start of FY26, recovering to a 6.8 per cent like-for-like sales growth in July following a mid-summer dip.
Data compiled across 50 million transaction points reveals, non-metro markets are leading the recovery, with Tier-III cities outperforming Tier-I urban centers by up to 2.4 percentage points. Discretionary apparel purchasing remained consistently positive, prompting fashion brands to adjust supply chain schedules to meet expanding small-town demand.
Regional sourcing operations realign to lower utility costs
Faced with unpredictable demand cycles and high input costs, apparel manufacturers and retail buyers are re-allocating capital toward automated, low-utility manufacturing solutions. Garment production hubs in Western and Southern India report rising operational investments in automated cutting and energy-efficient finishing systems to protect gross margins while expanding output.
Like-for-like per-store demand data shows that apparel growth is spreading deeper into smaller cities, driving retailers to optimize inventory turn rates and streamline production lines, states Kumar Rajagopalan, CEO, Retailers Association of India.
Digital payment integration accelerates sourcing transactions
Digital payment adoption in apparel trade has accelerated, with UPI transaction volumes expanding by 14 per cent Y-o-Y in July. Garment manufacturers and retail chains are increasingly integrating unified digital payment platforms across vendor networks and enterprise storefronts to reduce settlement friction, shorten working capital cycles, and support sustained double-digit expansion plans across domestic channels.
Helping brands improve efficiency across retail categories
The Retailers Association of India functions as the apex trade body representing modern retail, e-commerce, and apparel merchants across India. Operating nationally, the organization drives industry research, policy advocacy, and technology frameworks, supporting thousands of member brands in scaling operations, expanding market presence, and improving operational efficiency across key retail categories.
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