GST Hike Looms Over Garment Industry as Middle Class Faces Rising Costs

The government's proposed increase in GST on garments priced above Rs 2,500 has drawn criticism from the Clothing Manufacturers Association of India (CMAI). The tax hike, moving from 12% to 18%, is expected to burden middle-class consumers and strain organized manufacturers.

Despite reassurances, rising taxes on these garments could lead to significant challenges for the industry already impacted by international tariff wars, according to a statement from CMAI. Woolen garments, often costing between Rs 3,500 and Rs 7,000, will become even more expensive for consumers, posing difficulties especially during the cold seasons.

CMAI, representing over 5,000 members of the Indian apparel industry, warns that this reform could be a severe blow to the sector, affecting not only manufacturers but also retailers and exporters. The association emphasizes the necessity of reconsidering the tax bracket to prevent adverse impacts on both the industry and consumers.

(With inputs from agencies.)