The focus keyword garment sales Diwali 2025 highlights a surprising trend: while overall festive retail in India surged, several reports indicate that the garment/apparel category did not perform as strongly as expected during the Diwali 2025 period. This article examines the data, possible causes, and implications for brands and retailers.
What the data show
- According to the Confederation of All India Traders (CAIT), total goods sales during the Navratri-to-Diwali period reached approximately ₹5.40 lakh crore, marking about a 25% increase year-on-year.
- In the sector-wise breakdown, ready-made garments were classified under the “garments and gifts” category, accounting for about 7% of total festive goods sales.
- Yet independent industry reports show that many apparel manufacturers and retailers experienced subdued demand. For example, in Indore, manufacturers reported a decline in business during the festive season due to higher costs and weaker orders.
- Other reports note that although lower-cost apparel (under ₹2,500) saw interest because of GST cuts, higher-priced apparel suffered due to increased tax rates — putting pressure on premium garments.
Thus, while the overall retail environment was bullish, the garment segment faced mixed outcomes.
Why did garment sales lag behind expectations?
Here are five potential reasons:
1. Tax and pricing changes hurt premium segments
With the new GST structure, garments priced above ₹2,500 now face higher tax rates (18%) compared to earlier. This puts pressure on higher-end apparel.
This means that although value clothing may benefit, the premium segment may see demand softening.
2. Consumer preferences shifting to other categories
Some industry insiders believe that during this festive season, consumers may have prioritised electronics, home-goods or gifts over new apparel. For example, one report noted that consumers might “be sufficiently stocked up” and thus less enthusiastic about buying new clothes.
If consumers are diverting spending to other items, garments may lose out.
3. Inventory saturation or delayed mode
Manufacturers report that orders were weak and production was cut post-Diwali, indicating that demand didn’t meet expectations.
This suggests that inventory build-up or sluggish off-take might have dampened the sales.
4. Regional and segmental unevenness
In certain markets (e.g., Gujarat textile hubs), some segments saw good growth; others lagged. A report noted that while ready-made garment markets in Ahmedabad/Rajkot were positive, textile markets in Surat were “less than 50%” of last year’s business
Such uneven performance means the overall garment category may average out to weaker growth.
5. Cost inflation and weather/operational factors
For the Indore region, elevated cloth / garment prices (8-10% higher) and unseasonal rains affected demand. The Times of India
Higher costs can squeeze margins or reduce the attractiveness of new purchases to consumers.
Implications for retailers, brands and consumers
- Retailers & brands: Need to closely monitor segment-wise performance. Value and budget apparel may perform better than premium lines. Inventory planning, discounting strategies and regional focus will matter.
- Manufacturers: With weaker advance orders, production cuts may continue and cost management will be critical. Export and wholesale markets may need enhancement.
- Consumers: For budget apparel (under ₹2,500), lower tax rates may make purchasing more attractive; premium buyers may see less benefit.
- Market outlook: The garment/apparel industry may see slower growth relative to overall retail, unless there is a corrective stimulus (discounts, new collections, marketing) or improved consumer sentiment.
Key takeaway
Despite an otherwise strong festive retail environment in Diwali 2025, the garment segment appears to have under-performed relative to expectations. The focus keyword garment sales Diwali 2025 therefore reflects a nuanced picture: sector growth is not uniform, and apparel retailers face headwinds including tax changes, shifting consumer priorities and cost inflation.
