Indore Garment Sector Faces Inventory Overhang, Demand Dull Ahead of Eid 2026
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In an unusual downturn just before the Eid festive season, garment manufacturers and retailers in Indore are grappling with surplus stock, weak consumer demand, and stretched payment cycles — creating financial stress in what is traditionally a peak sales period for the apparel market.
Sluggish Demand Despite Festive Season
Despite Eid approaching — a time usually marked by heightened clothing purchases — retailers and manufacturers report lackluster market sentiment. Instead of a usual business uptick, consumer demand remains dull, forcing many shops to adopt a cautious stance on stocking new inventory.
Inventory Pile-Up and Cash Flow Issues
Warehouses are overflowing with unsold garments, leading to an inventory overhang across the sector. Businesses are struggling with payment delays of up to six months, effectively blocking working capital and making it difficult to source fresh stock for the upcoming season.
Retailers like Sheel Porwal highlight that delayed payments have disrupted supply cycles, leaving manufacturers unable to replenish their collections in time.
Rising Input Costs Squeeze Margins
Industry players point to increasing raw material costs as a compounding challenge. Prices for cotton cloth surged by around ?1 per metre, while denim prices rose by ?5 per metre, tightening profit margins at a time when sales are already weak.
Key Markets Affected
Indore’s readymade garments traditionally find major markets in Tamil Nadu, Andhra Pradesh, Haryana, Rajasthan, Uttar Pradesh, Maharashtra, and Gujarat. However, orders from these regions have stagnated, adding to the industry’s anxiety.
Industry Voices
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Arun Bakliwal from the cloth market said businesses are holding high stocks while fighting rising input costs.
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Gautam Gupta, a local manufacturer, acknowledged sitting on huge unsold stocks that have failed to move.
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Akshay Jain, President of the Indore Retail Garments Association, explained that shops are retaining new stocks only to stay relevant, but with bulk orders drying up, many are banking on a last-minute demand surge to clear backlogs.
Sector Outlook
The current situation points to a broader challenge for the garment industry, where festive sales expectations are being dampened by economic headwinds and evolving market behavior. With payment cycles stretched and warehousing costs rising, businesses hope that a late-season sales spur could help reduce inventory pressure.
03:45 PM, Jan 21
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