The Crossbill News Desk
Higher GST rates on readymade garments have dampened festive season sales, with ethnic and festive wear seeing a sharp decline this year.
According to industry estimates, garments priced above Rs 2,500 — which attract 18% GST — recorded a significant drop in demand, The Hindu reported.
“Our estimate is ethnic wear and festive wear showed a decline of 15%. Sale of branded garments priced above Rs 2,500 saw a 5-7% drop. However, products below Rs 2,500 saw a growth of 7-8% over last Diwali,” Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India (CMAI) told the newspaper.
Branded Indian garments are generally priced between Rs 2,500 and Rs 7,000, while international brands sell at higher price points with relatively steady demand. The segment worst hit by the higher GST slab is Indian ethnic wear, Mehta said.
India’s domestic apparel market is estimated at around $100 billion, with ethnic wear accounting for nearly 25% of it. Apart from festivals, the category sees robust demand during the wedding season as well, he added.
Previously, branded garments priced above Rs 1,000 attracted 12% GST. The industry had urged the government for a uniform 5% duty across all categories, but the Centre instead moved garments priced above Rs 2,500 into the 18% slab — typically reserved for luxury goods.
Under the revised structure, a saree priced at Rs 1 lakh continues to attract only 5% duty as it falls under textiles, whereas a salwar set priced above Rs 2,500 is taxed at 18% since it is classified as a ready-made garment.
“There will be a certain shift to garments less than Rs 2,500,” Mehta said.
Earlier, manmade fibre attracted 18% GST, MMF yarn 12%, and garments 5%. Now, all MMF products are taxed at 5%, with only garments priced above Rs 2,500 placed in the 18% slab. The CMAI has continued to press for a uniform 5% GST rate on all garments.
Mehta also said that the association has conducted a comprehensive study of the Indian apparel market, covering all major segments, and plans to release the report within 10-15 days.
Meanwhile, a report by the Confederation of All India Traders Research and Trade Development Society noted that of the total retail trade by the non-corporate sector during Deepavali this year, ready-made garments accounted for 7%, while textiles and fabrics made up 4%.
According to industry estimates, garments priced above Rs 2,500 — which attract 18% GST — recorded a significant drop in demand, The Hindu reported.
“Our estimate is ethnic wear and festive wear showed a decline of 15%. Sale of branded garments priced above Rs 2,500 saw a 5-7% drop. However, products below Rs 2,500 saw a growth of 7-8% over last Diwali,” Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India (CMAI) told the newspaper.
Branded Indian garments are generally priced between Rs 2,500 and Rs 7,000, while international brands sell at higher price points with relatively steady demand. The segment worst hit by the higher GST slab is Indian ethnic wear, Mehta said.
India’s domestic apparel market is estimated at around $100 billion, with ethnic wear accounting for nearly 25% of it. Apart from festivals, the category sees robust demand during the wedding season as well, he added.
Previously, branded garments priced above Rs 1,000 attracted 12% GST. The industry had urged the government for a uniform 5% duty across all categories, but the Centre instead moved garments priced above Rs 2,500 into the 18% slab — typically reserved for luxury goods.
Under the revised structure, a saree priced at Rs 1 lakh continues to attract only 5% duty as it falls under textiles, whereas a salwar set priced above Rs 2,500 is taxed at 18% since it is classified as a ready-made garment.
“There will be a certain shift to garments less than Rs 2,500,” Mehta said.
Earlier, manmade fibre attracted 18% GST, MMF yarn 12%, and garments 5%. Now, all MMF products are taxed at 5%, with only garments priced above Rs 2,500 placed in the 18% slab. The CMAI has continued to press for a uniform 5% GST rate on all garments.
Mehta also said that the association has conducted a comprehensive study of the Indian apparel market, covering all major segments, and plans to release the report within 10-15 days.
Meanwhile, a report by the Confederation of All India Traders Research and Trade Development Society noted that of the total retail trade by the non-corporate sector during Deepavali this year, ready-made garments accounted for 7%, while textiles and fabrics made up 4%.
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