Continuous reports indicating that garments priced above ₹2,500 may soon fall into the 18% GST slab—up from the current 12%—have triggered widespread concern in the apparel industry. Despite repeated assurances from policymakers, this potential GST hike has reignited fears of a severe disruption in a sector already weakened by the ongoing American tariff wars. If implemented, such GST changes could prove to be a death knell for garment manufacturers who remain central to India’s economy and social fabric.
The GST Council’s proposal to fix ₹2,500 as the threshold for the 5% slab and shift all garments above this limit into the 18% category has added to industry anxieties. Such a GST adjustment would place an unfair burden on the aspiring middle class—India’s strongest consumer base—and the organized garment manufacturing sector, which continues to reel under global trade conflicts. Far from providing relief and stability, GST risks compounding the challenges of those who need policy support the most.
Industry leaders emphasize that garments priced above ₹2,500 should not be classified as luxury goods under GST rules. These higher prices often stem from costly raw materials, intricate handwork, and the skilled labor needed to produce them. A rigid GST structure risks wrongly labeling essential and culturally significant garments as luxury items. By doing so, GST policy could distort consumer access while simultaneously discouraging producers, resulting in widespread disruption in both demand and supply.
Woolen clothing illustrates how GST would directly affect necessities. Families across North, North-East, and Eastern India rely on woolens during harsh winters, with prices typically ranging from ₹3,500 to ₹7,000. These are not indulgent purchases but basic requirements for survival. Placing them in the 18% GST slab would substantially raise household costs, forcing middle-class families to compromise on warmth and health. In such cases, GST shifts from being a neutral tax tool to becoming an obstacle to basic comfort and safety.
The impact of GST on wedding attire also carries immense cultural weight. Weddings are deeply significant in Indian society, with even modest households spending ₹10,000 to ₹15,000 on bridal or festive garments. Raising GST on such clothing to 18% would leave families with little choice but to settle for inferior options, diminishing the joy of a once-in-a-lifetime event. Here, GST becomes more than a financial barrier; it delivers an emotional blow to millions of families.
Traditional and artisan-made garments face perhaps the gravest risks under the proposed GST hike. Handcrafted products, which inherently require more time and effort, almost always exceed the ₹2,500 benchmark. An 18% GST levy would depress demand, erode the livelihoods of artisans, and threaten centuries-old cultural heritage. Instead of uplifting traditional crafts, GST could become a force that dismantles rural economies and weakens India’s unique artisanal legacy.
The long-term structural consequences of GST cannot be ignored. For years, government and industry bodies have worked to formalize the apparel sector, encouraging businesses to move away from informal practices. A steep GST increase risks reversing this progress, driving enterprises back into non-compliant operations. Rather than strengthening transparency and compliance, GST could weaken the very foundation of India’s garment sector.
On the eve of this crucial GST meeting, the Clothing Manufacturers Association of India (CMAI) has called upon the Honorable Prime Minister to intervene. With over 12 million workers—primarily women, semi-skilled, and unskilled individuals—depending on the apparel sector, GST decisions must not be reduced to technical adjustments. Protecting the industry from an excessive GST burden is critical to preserving employment, sustaining India’s textile heritage, and ensuring resilience in the domestic economy.
About CMAI
The Clothing Manufacturers Association of India (CMAI) is the largest and most representative body of the Indian apparel industry, with more than 5,000 members and a network of 35,000 retailers. Its membership base includes manufacturers, exporters, brands, and allied industries. In addition to policy advocacy on GST and related matters, CMAI supports sustainability initiatives, notably the SU.RE program launched in 2019. With over six decades of contribution, CMAI has shaped the industry, including spearheading the creation of the Apparel Export Promotion Council (AEPC) in 1978. CMAI is also authorized to issue non-preferential Certificates of Origin and represents India globally at the International Apparel Federation (IAF), ensuring that GST and other pressing concerns of the apparel industry receive international visibility.
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