India’s apparel sector is undergoing a profound structural shift as the mid-premium segment achieves a staggering 25 per cent CAGR as of early 2026. This ‘premiumization’ trend marks a departure from volume-led, price-sensitive buying toward intentional, quality-driven consumption. According to the Deloitte India 2026 Fashion Report, ‘accessible premium’—products offering superior craftsmanship and brand trust without luxury price tags—is redefining the domestic market. This transition is further fueled by the Union Budget 2026–27, which introduced the National Fiber Scheme to enhance the availability of high-grade natural and man-made fibers, ensuring manufacturers can meet the rising demand for durable, high-performance textiles.
Fiscal catalysts and infrastructure modernization
To capitalize on this $194 billion opportunity, the government has launched the Tex-Eco Initiative, a strategic framework designed to align Indian textile manufacturing with international ESG (Environmental, Social, and Governance) standards. By integrating the Textile Expansion and Employment Scheme, the budget provides capital support for machinery upgrades in traditional clusters, aiming to bridge the 30 per cent productivity gap currently seen in mid-tier manufacturing. Industry analysts suggest that these policy interventions, combined with the India-EU Free Trade Agreement, will allow Indian apparel to transition from basic commodities to high-value, design-led exports.
Domestic resilience amid global volatility
While global apparel markets face stagnation, India’s domestic consumption remains a critical stabilizer, contributing nearly 80 per cent of total industry revenue. The rise of accessible premium has pushed the Average Selling Price (ASP) in urban centers by 18 per cent Y-o-Y as consumers prioritize longevity over fast-fashion cycles. The Indian consumer is no longer chasing fashion for visibility but for meaning and confidence, stated Anand Ramanathan, Partner, Deloitte India. With the PM MITRA Mega Textile Parks now focusing on higher-margin technical textiles, the industry is well-positioned to reach its ambitious $250 billion domestic market target by 2030.
Spearheaded by organized retailers, India’s mid-premium apparel segment focuses on high-quality ethnic and Western wear. Key growth plans include expanding into Tier-II and Tier-III cities through omnichannel strategies. With a projected 25 per cent CAGR, the segment is the primary driver of the $115 billion domestic apparel market, supported by new 2026 textile-specific skilling programs.
