The Indian fashion market is experiencing rapid growth, prompting global brands to rethink their strategies. Instead of relying solely on imports, many are now turning to local manufacturers to meet domestic demand more efficiently. This shift helps them avoid high import duties, enhance product competitiveness, and even establish new procurement hubs for global operations. Brands like Donna Karan New York (DKNY), Gant, Arrow, and Marks & Spencer have adopted this approach. According to Ashesh Amin, president of clothing and retail at SKNL Group, importing garments from abroad can be unreasonably expensive in India due to steep taxes. In some cases, tax rates can reach as high as 50%, which significantly cuts into profit margins. For instance, a garment priced between $7 and $11 in India would not make sense if imported directly. In May of this year, SKNL Group signed a licensing deal for DKNY men’s apparel, allowing the brand to distribute its full range globally outside of Japan. All purchases for Indian stores are currently made domestically, and retail prices must stay within 15% of those in neighboring affluent markets like Singapore and Dubai. A major driver behind this shift is the growing sales of retail outlets in India. Not long ago, international brands were rare in the country, and their sales were too small to justify local sourcing. However, with the textile and clothing retail market expanding by 8.5% during the fiscal year 2009–2010, brands are now looking to capitalize on this opportunity. One standout example is the joint venture between Marks & Spencer and Reliance Retail. With 17 stores across India, they offer products ranging from $2 to $75. The company plans to increase its local procurement from 40% to 70% in the near future. During the same fiscal year, they sourced up to $175 million worth of goods from 42 Indian suppliers, including items exported to international locations. Another key factor behind this trend is the rise of franchise agreements with Indian partners. Many foreign brands have only recently entered into joint ventures with local manufacturers, with contracts requiring them to source entirely from abroad during the first two years. Arvind Brands, a major player in India, handles marketing for several international labels, including Gant, Izod, and Arrow. In the 2009–2010 fiscal year, their annual sales reached $120 million, and they are currently negotiating new deals to bring more foreign brands into the Indian market. According to Arvind Brands, as long as import taxes remain, most sourcing will continue to take place locally. But if these taxes are removed, manufacturers may look for the most cost-effective sourcing options globally.

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