GST rate hike could cripple India's garment industry, warns CMAI
The Clothing Manufacturers Association of India (CMAI) has sounded a strong warning against the government’s reported plan to hike Goods and Services Tax (GST) on garments priced above Rs.2,500 from 12% to 18%, saying the move will deal a “death-knell” to an industry already battered by global tariff wars and weak domestic demand.
The body has also urged Prime Minister Narendra Modi to intervene and ensure that “drastic damage” is not inflicted on the sector, which employs over 12 million people.
CMAI flagged several challenges the higher levy would trigger, ranging from steeper costs for middle-class consumers to erosion of traditional handloom and artisan-based clothing, as well as a potential pushback of the sector into informality.
The association, which represents over 5,000 apparel manufacturers, exporters, brands and retailers across India, said the Rs.2,500 cut-off is arbitrary and disproportionately hurts middle-class families and organized garment producers.
“Almost the entire range of woolen garments – essential for the middle class across North, North-East and East India – are priced between Rs.3,500 and Rs.7,000. Placing them in the 18% GST slab is equivalent to asking middle-class Indians not to wear woolens during the bitterly cold winters,” CMAI said in its appeal.
