How to start a Fashion business in India?



The fashion industry in the country has been booming extensively, channelized from recently mushroomed boutiques to big malls and online portals, and supported by a potent consumer demand for haute couture. Earlier, these fashion or apparel stores used to be informal with small scattered businesses but now a days becoming more organised with the upcoming giant retail chains in business of fashion. Even then one can see a good demand for small apparel boutiques since they tend to offer a personalised or a different garment and fashion style. This article focuses on the process of a fashion start-up in India


Fashion industry in the country is one of the biggest in the world simply because it provides one of the three basic necessities of life i.e. clothing to a population of more than 1.2 billion people. The textile industry is presently valued at around 33 billion US$ while the sector of unstitched garments is estimated at around 8 billion US$. Clothing and textiles constitute for a whopping 14 % of the total industrial production.


A fashion start-up can be organised under a variety of models depending on the ideas, skills, ambitions and aspirations of the entrepreneur or promoter. Some of the basic fashion related business models are described below:

  • A Fashion Boutique: These are usually small apparel stores which sell a specific clothing line designed by one or more fashion designers. They have targeted consumers catering a small section of people unlike, a large apparel chain that would target a wider section of people.
  • Fashion Designing: Clothes are specifically made by designers to please their client or an audience based on their demands. The designers are mostly hired to create dresses especially customised for a customer usually for special occasions. On the other hand, stylists are the ones who suggest or give tips about the recent trends or the kind of apparel that suits different occasions.
  • Online Fashion Retail:With the rise of e-commerce, consumers in the country are getting used to the idea of ‘click and get your stuff home-delivered’. Online portals such as YepMe, Jabong, Myntra and many others have been running successfully as online fashion retailers. Even though they have become some well-established online retail fashion portals, there is still a lot of scope for the growth of new online fashion retailing portals just like the concepts of fashion boutiques amongst these giant retailers. A person has an option to sell his/her line of clothing through existing online portals such as Flipkart, Snapdeal, Amazon, ebay etc. in addition to an individually owned business portal.



The first step to start a fashion business is to setup a business entity and open a bank account in the name of the business (optional). The entity can either be created in the form of a Proprietorship or a Partnership Firm or a Company or as a Limited Liability Partnership (LLP).

Proprietorship works for those who want to start fashion designing or styling business as a part-time job in which the annual sales turnover is not expected to be greater than Rs. 10 lakhs per annum.

Private Limited Company or a LLP works for those who wish to start a full-blown fashion business or a boutique because it provides ways to scale-up, increase/decrease partners and capital intake in an easy way.



Family, friends and promoters are some of the initial contributors/providers to the seed capital in a business. In a similar manner, if the seed capital required is large for setting up the business, a person can avail a loan from any bank. A bank loan can usually cover the interior work as a part of the term loan added to working capital finance to fund part of the stocks.

A person can also make use of Private equity or Angel funding if his/her fashion business can possibly show quick growth or the use of innovative technology as a catalyst. Some examples of such a model are YepMe, Jabong, Myntra,Zivame which are amongst some of the well-established ventures in the market.



The ones in the fashion business who do not sell any clothing i.e. fashion designers or stylists do not need any VAT registration but the ones selling clothes in the country do need to obtain a VAT registration from the sales office in their local area. The unstitched garments are exempted from any such registration or tax. A service tax registration is required only for people who provide services of more than Rs. 9 lakhs per annum that are taxable in the country.



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7 thoughts on “How to start a Fashion business in India?”

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  2. Hi i m lukin to start my fashion business in mumbai while i m based in hyderabad.Do i need to register my business in hyd or mumbai?need your guidance on this.

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