News

Corporate Update

CMAI Warns Against GST Hike on Garments Above Rs. 2,500

• By  Textile Excellence
• September 03, 2025

The Clothing Manufacturers Association of India (CMAI) has sounded a strong alarm ahead of the GST Council meeting, warning that any move to increase GST on garments priced above Rs. 2,500 from 12% to 18% would be catastrophic for the apparel sector.

CMAI stated that the proposed hike will not only hurt garment manufacturers but also the aspiring middle class, which forms a significant consumer base for products in this category. The association highlighted that almost the entire range of woollen garments, priced between Rs. 3,500 and Rs. 7,000, would fall under the higher tax bracket. This could make winter clothing unaffordable for families across northern, eastern, and north-eastern India.

Similarly, wedding attire, traditionally costing between Rs. 10,000 and Rs. 15,000, and artisan-made clothing, which relies on handwork and craftsmanship, would also be severely affected. CMAI cautioned that such a tax regime would discourage parents from buying quality clothing for weddings and could devastate India’s traditional craft sector.

Industry representatives further stressed that the move would undo years of progress in formalizing the garment industry, pushing manufacturers back into the informal sector. The apparel sector already faces challenges from the ongoing US tariff wars, which have weakened export competitiveness.

Employing over 12 million people, largely women and semi-skilled workers, the apparel industry is considered a lifeline of India’s textile economy. CMAI has urged Prime Minister Narendra Modi to intervene and prevent what it called a “death knell” for the sector.

Employing over 12 million people, largely women and semi-skilled workers, the apparel industry is considered a lifeline of India’s textile economy. CMAI has urged Prime Minister Narendra Modi to intervene and prevent what it called a “death knell” for the sector.