How to Start a Garment Manufacturing Business?

Many entrepreneurs dream of launching a garment manufacturing business, and if you do it well, it's a great industry. There is undoubtedly space for new, creative companies in the global apparel market. Clothing manufacturing offers great possibilities for anyone interested in fashion, starting a scalable business, or just wanting to get into a highly desired industry. The fashion industry moves quickly, is fiercely competitive, and doesn't allow for many mistakes. Therefore, if you're serious, you'll need a lot of hustle and a well-defined plan. In this blog, you will get a comprehensive guide to navigate the process.

Understanding the Garment Manufacturing Business

The size of India's textile and clothing market is predicted to reach US$ 387.3 billion by 2028, with a compound annual growth rate (CAGR) of 14.59% from US$ 172.3 billion in 2022. With India's rich textile history, highly skilled labor force, and expanding domestic and international demand, launching a clothing manufacturing company there might be a financially rewarding idea.

One major benefit for labor-intensive businesses like clothing manufacturing is the large pool of skilled and semi-skilled workers available in India. It has produced textiles for a long time and has a solid supply of raw materials, especially cotton. India is a desirable location for clothing sourcing and manufacturing because labor prices there are often cheaper than in many wealthy nations. There is a large and quickly expanding middle class in India, which creates a substantial domestic demand for clothing. Through many laws and incentives, the Indian government has been aggressively advancing the textile and clothing sector.

Also Read: 7 Small-Scale Business Ideas With Low Investment

Key Aspect of Garment Manufacturing Business

India's garment manufacturing business is a thriving one with plenty of prospects as well as unique difficulties. Here is a more thorough overview of important elements:

• Large Domestic Market: The middle class in India is large and expanding, with rising disposable incomes and a growing desire for fashion.
• Export Potential: With a robust export foundation, India is the second-largest manufacturer of textiles and clothing worldwide. It is expected that free trade agreements (FTAs) with nations such as the UK and the EU would increase exports even more.
• Skilled Workforce: This labor-intensive business depends heavily on India's enormous pool of skilled and semi-skilled workers.
• Availability of Raw Materials: India has a robust domestic raw material supply chain, particularly for cotton, and is expanding its capacity to produce man-made fibers.
• Government Support: Through several programs and initiatives, the Indian government actively supports the textile industry.
• E-commerce Growth: Manufacturers now have more ways to connect with customers directly due to the expanding e-commerce industry.
• Value-Added Processes: Specialized fields, including printing, embroidery, and clothing washing, offer opportunities.

Step-By-Step Guide to Start a Garment Manufacturing Business

What is your niche?

Will you focus on sportswear, ethnic clothing, children's clothing, men's clothing, women's clothing, or a particular style of clothing like lingerie, jeans, or t-shirts? You can optimize your business processes and target specific customers by specializing in a particular area.
You have a choice based on:

Demographics: Men's, women's, children's, or unisex

Categories: T-shirts, kurtas, denim, lingerie, uniforms, activewear, etc.
Materials: synthetic, organic, cotton, silk, and denim

Also Read: 15 Profitable Reselling Business Ideas

What is your business plan?

A well-structured business plan serves as your success road map. Will you produce your own products directly, under contract for other companies, or both? Describe your logistics, quality control procedures, raw material procurement, and production process. How are you going to connect with your target audience? Think about direct sales, wholesale alliances, internet platforms, or a combination of these.

A good business plan should include:

• Executive Summary
• Market Research (Who’s your competition? Who are your buyers?)
• Production Plan (Own unit or outsourcing?)
• Financial Projections (costs, profits, break-even point)
• Marketing and Sales Strategy

What is your business model?

Three options are available to you:

• Original Equipment Manufacturers, or OEMs, produce goods for well-known brands.
• Manufacturer + Designer: ODM (Original Design Manufacturer).
• Produce under their label for boutique or online retailers.

Each has advantages and disadvantages. OEM might be safer if you're just starting with little money.

What are the legal Requirements?

The size and type of your firm will determine which registrations you need to get in India. This could consist of:

• Registration of a Company (Sole Proprietorship, Partnership, or Private Limited Company)
• Registration for GST is required.
• Factory License (if more than ten employees are using power)
• Registration for EPF and ESIC (for employee welfare)
• Registering a trademark (if starting your brand)

Tip: You can save a ton of time here by getting expert assistance (a CA or CS).

How do you set up manufacturing?

When setting up your production facility, location and equipment must be carefully considered. Pick a site that provides access to a trained workforce, transportation systems, and possibly textile clusters to capitalize on current supply chains and infrastructure. Think about things like land prices, the availability of electricity, and market accessibility.

Infrastructure Needs:

• Cutting tables
• Sewing machines
• Overlock machines
• Pressing and finishing equipment
• Fabric storage space
• Packing section

How to source raw materials?

The raw materials you use have a big impact on the quality of your clothes. Look into and build connections with vendors of labels, buttons, zippers, threads, textiles, and other trims. Think about things like delivery schedules, cost, and quality. Put procedures in place to guarantee that the raw materials fulfill your requirements for quality. To prevent shortages or overstock, create an effective method for controlling your raw material inventory.

Also Read: Top 15 Fastest Growing Business Sectors In India In 2025

What is the process of production?

Strict quality control and a streamlined production process are essential for productivity and client satisfaction. Create a production pipeline by outlining all of the stages that go into making a garment, from cutting to finishing and packaging. Hire skilled finishers, cutters, tailors, and quality assurance staff. Invest in improving their abilities, and spend money on training. To find and fix flaws early on, conduct routine inspections during the production process. Maintain records of material usage, production output, and quality control information.

How to market?

A clear approach is necessary to get your products to market. Create a distinctive brand identity that captures the essence of your target market and product quality. Consider several choices, such as:

• Direct sales: Making sales via your own physical storefronts or internet store.
• Wholesale: Providing goods to wholesalers and retailers.
• Internet marketplaces: Putting your goods up for sale on e-commerce sites.
• Exhibitions and trade shows: Attending business gatherings to connect with possible customers.Exports: Investigating global markets.
• Marketing and promotion: Use offline marketing (print ads, brochures), internet marketing (social media, SEO, paid advertising), and public relations to build brand awareness and increase sales.

Investment Breakdown:

• Business Registration & Legal: ₹30,000 – ₹50,000
• Factory Space (Rent & Deposit): ₹1,00,000 – ₹2,00,000
• Basic Factory Setup (Renovation, Electricity, Tables, Racks): ₹2,00,000 – ₹3,00,000
• Machinery (15–20 industrial sewing machines, overlock, cutting machine): ₹7,00,000 – ₹10,00,000
• Raw Material (Fabric, Threads, Accessories): ₹3,00,000 – ₹5,00,000
• Salaries (First 3 months buffer): ₹3,00,000 – ₹5,00,000
• Utilities & Overheads (Electricity, Water, Internet): ₹30,000 – ₹50,000
• Marketing & Website Development: ₹50,000 – ₹1,00,000
• Miscellaneous & Contingencies: ₹50,000 – ₹1,00,000

Market Growth Drivers:

• Employment: It directly and indirectly employs millions of people, making it one of India's biggest employers.
• Exports: India is a significant global exporter of clothing and textiles. In order to boost textile exports in the upcoming years, the government has set high goals.
• Domestic Demand: The demand for clothing is high domestically due to a substantial and expanding middle class, increased disposable incomes, and growing fashion consciousness.
• Government Support: Through a number of programs and initiatives, including integrated textile parks and production-linked incentives (PLI), the Indian government is aggressively advancing the textile sector.

Challenges in the Indian Garment Manufacturing Sector

Although there is a lot of potential, there are challenges as well:

• Competition: Both domestically and globally, the industry is extremely competitive.
• Labor Issues: It can be difficult to manage labor, guarantee fair pay, and retain a skilled workforce.
• Bottlenecks in the Infrastructure: Logistics problems, insufficient transportation, and irregular power supplies might affect output and delivery.
• Price Volatility of Raw Materials: Profitability may be impacted by changes in the cost of cotton and other raw materials.
• Quality Standards: Exporters must adhere to international quality standards.
• Working Capital Management: Effective cash flow management is crucial, particularly in the beginning.

Although it's not easy, starting a clothing business in India is incredibly rewarding. You must be prepared, persistent, and patient. The good news? The possibilities are endless after you establish yourself! You may become the next big thing in Indian fashion by providing high-end companies or perhaps starting your clothing line. There are a lot of prospects to start a clothing manufacturing company in India because of the country's sizable market, highly qualified labor force, and supportive government. But success necessitates careful preparation, a solid grasp of the market, effective operations, and an emphasis on innovation and quality.