The Clothing Manufacturers Association of India (CMAI) has raised alarm over reports that garments priced above Rs. 2,500 may soon be taxed at 18%, up from the current 12%. The association warns that such a move would deliver a severe blow to the apparel sector, which is already under strain from the ongoing U.S. tariff wars.
CMAI stressed that the higher GST rate would not primarily affect luxury buyers but rather the aspiring middle class and organized garment manufacturers. Many products priced above Rs. 2,500 fall into this bracket due to the inherent cost of raw materials and the artistic craftsmanship involved.
Examples highlighted by CMAI include:
-
Woolen clothing, essential for families in North, East, and Northeast India, typically priced between Rs. 3,500 and Rs. 7,000, would become even less affordable.
-
Wedding attire, often starting at Rs. 10,000 to Rs. 15,000, could force middle-class parents to compromise on quality for their children’s big day.
-
Traditional and artisan-made garments, which require time-intensive handcrafting, would face declining demand, threatening India’s craft heritage and artisan livelihoods.
The association further cautioned that this move would undo years of progress in formalizing the garment sector, pushing manufacturers back into the informal economy. At a time when the industry is already grappling with global trade pressures, CMAI believes such an unprecedented price hike could be disastrous for domestic growth.
Appealing directly to Prime Minister Narendra Modi, CMAI urged government intervention to prevent “drastic damage” to an industry that employs over 12 million people, many of them women and semi-skilled workers, and serves as a cornerstone of India’s textile heritage.
