Revenues of readymade garment companies are expected to increase owing to a high domestic demand and spurt in exports. Domestic sales, which account for 80 per cent of the sector’s revenue, increased at a CAGR of 9.6 per cent in the last five years to Rs 4.83 lakh crore. This growth is set to further increase to 10-10.5 per cent this year, due to an increase in reach of both organised retail and brands in tier-II and -III cities and rising growth of value apparel retail segment.

Garment exports in the first six months of this year increased by over 10 per cent. These exports are likely to benefit from rupee depreciation, partial restoration of export incentives and revival of demand in the UAE, the third-largest exports destination after the US and the European Union.

Exports to UAE, which account for 12 per cent of total Indian garment exports, are slated to recover after a significant drop in last two years. Export incentives restored include an increase in rebate of State and Central taxes and levies by almost 200 bps in March, addition of merchant exporters in the interest equalisation scheme for pre- and post-shipment export credit and a 200 bps increase in the rebate offered to micro, small and medium enterprises under IES.