New Delhi, Nov 17 : Amid rising private consumption, India's strong growth is rendering it a key global fashion market for 2025, particularly for high-street players for their manufacturing needs, according to a new report.

India's mid-market fashion segment is also expected to grow around 12 to 17 per cent in 2025 compared to the projected low single-digit growth of the global fashion market, according to global consultancy firm McKinsey & Company.

One in five respondents in 'The Business of Fashion and McKinsey State of Fashion 2025 Executive Survey' mentioned India as a focus market for 2025.

According to the report, India is expected to become the fourth largest economy in 2025, growing at 7 per cent year on year, outpacing all other economies. This puts India on track to become the world's third-largest consumer market by 2027.

"Strong growth is fuelled by the middle class and digitisation. There are 430 million people in India's middle class - greater than the middle classes of the US and Western Europe combined. It is expected to reach 1 billion by 2050, largely from tier-two and -three cities," the report noted.

In such a scenario, markets such as India are expected to become key sourcing hubs for US and European apparel and textiles. Fashion brands initially turned to Vietnam to reduce their dependence on China, with the value of apparel and textile exports from Vietnam increasing by 35 per cent between 2015 and 2020.

"Now, other Asian countries such as India and Bangladesh are also hotspots," the report mentioned.

This trend is expected to continue as fashion executives rank Asia growth markets as their top sourcing hotspots for the next five years and regulatory incentives fuel manufacturer capability building in these countries.

"India is expected to play a more prominent role. The Indian government has invested around $2.5 billion in Production-Linked-Incentives and reforms to Quality Control Orders, while foreign investment has increased 3x since 2019," said the report.

India's population of ultra-high-net-worth individuals (UHNWI), with over $30 million in assets, is expected to grow 50 per cent from 2023 to 2028, making it the fastest-growing UHNWI population in the world. Aspirational customers, who make up about half of global luxury sales, are expected to grow from 60 million in 2023 to 100 million in 2027, said the report.

/IANS