Business Of Fashion - August 2025

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Dear Readers, The Indian ethnicwear segment, once viewed primarily through the lens of tradition, has evolved into one of the most influential pillars of the nation’s fashion industry.
No longer limited to ceremonial wardrobes, ethnicwear has found a place in everyday dressing, reflecting both a cultural revival and a modern reinterpretation of heritage. As per The Knowledge Company (TKC), the market stood at $19.5 billion in FY25 and is projected to grow at a CAGR of 9% in the coming years. A key growth driver is the rising demand from Tier 2 and Tier 3 cities, which now contribute more than half of all online ethnicwear sales.
The transformation is defined by specificity. Consumers today seek authenticity and connection, fuelling renewed interest in region-specific crafts and textiles. E-commerce platforms report significant increases in searches for traditional weaving, embroidery, and dyeing techniques.
This points to a future where cultural storytelling will play as important a role in purchase decisions as contemporary fashion trends. Ethnicwear already accounts for the largest portion of India’s $102 billion garment industry, contributing $22 billion in FY24. By FY26, the segment is expected to reach $26.9 billion, growing at an estimated 10.6% CAGR. Once dominated by unorganised players, the industry is seeing a rapid shift toward organised retail, which currently comprises 15 to 20% of the market but is expanding at 20% annually.