Ahmedabad: The Clothing Manufacturers’ Association of India (CMAI) has warned that any move by the GST Council to raise tax on garments priced above Rs 2,500 from 12% to 18% will strike a blow to the industry already grappling with weak exports and the fallout of the US tariff wars. The body said that products breaching this price threshold are not luxury buys but reflect higher raw material costs and handwork, and that the proposed rate will punish the aspiring middle class while weakening the organised sector.“As an immediate impact, the move will affect the entire range of woollen garments, in addition to the festive and wedding attire, for the festive and winter seasons. Traditional and artisan-made clothing, often priced higher because of handcrafting, would also be pushed further out of reach, threatening craft livelihoods,” according to CMAI.An unprecedented price hike in such large product categories, it added, could become the death knell for a sector employing more than 12 million people, largely women and semi-skilled workers.Rahul Mehta, chief mentor of CMAI, said, “Exports are already in doldrums due to US tariffs, with 35% of our shipments going to that market. This makes the industry heavily dependent on domestic demand, but consumers today are diverting discretionary spending towards electronics, travel and experiences, and have become increasingly price sensitive. A GST hike will only dampen apparel demand further. At the same time, payment cycles have stretched from 45 days to as much as 120 days, choking cashflow. In such conditions, the industry cannot absorb additional costs, especially when raw material and logistics prices remain volatile.”
