The Clothing Manufacturers Association of India (CMAI) has expressed appreciation for the government’s move to rationalize the Goods and Services Tax (GST) framework by consolidating it into three slabs—5%, 18%, and 28%. According to the association, this reform is an important step toward simplifying compliance, reducing tax-related complexities, and ultimately making goods more affordable for the consumer. A more transparent and streamlined taxation regime, CMAI believes, will strengthen India’s business environment and support economic growth in the long run.
Despite this optimism, CMAI has raised significant concerns about the way these reforms will be applied to the textile sector, particularly garments. The critical question remains: will all textile products be uniformly taxed at 5%, or will items above a certain price threshold fall under the 18% category? For a sector already facing headwinds, this ambiguity has created uncertainty and apprehension among stakeholders.
For many years, CMAI has consistently advocated for a uniform 5% GST rate across the entire textile value chain. The rationale is clear—textiles are an essential commodity and a mass-consumption product. In most countries, textiles are taxed at the lowest slab to reflect their role in everyday life. India’s textile sector, which is also the second-largest source of employment after agriculture, deserves supportive policies that acknowledge its social and economic significance.
Media reports suggesting that garments priced above ₹2,500 could be taxed at 18% have sparked alarm. CMAI President Santosh Katariya has strongly opposed the proposal, stressing that equating apparel with luxury items such as electronics or mobile phones is both economically flawed and socially insensitive. He explained that the textile industry had transitioned from the informal “grey” market to the formal sector primarily because of the reasonable 5% GST rate. Even when a 12% slab was applied to certain categories, the industry adapted reluctantly. However, an increase to 18%, Katariya warned, could undo years of progress by encouraging under-invoicing, tax evasion, and a return to informal trade. Manufacturers might also compromise on quality simply to keep prices below the cutoff.
Vice President Ankur Gadia echoed these concerns, pointing out that categories such as woolens, sustainable fashion, and wedding wear are naturally priced higher due to costlier raw materials and production methods. Woolen garments, for instance, are essential for people in northern and northeastern India, yet many of them cost above ₹3,500 and could be unfairly burdened with the higher tax rate. Similarly, wedding attire holds deep cultural and emotional value for families across the country. For many parents, purchasing a lehenga or saree for their daughter’s wedding is a lifelong aspiration, not a luxury splurge.
Chief Mentor Rahul Mehta added that India’s traditional handloom and embroidered garments, which are already more expensive because of their artisanal craftsmanship, would suffer disproportionately under an 18% GST. Such a move would discourage consumers from supporting indigenous, home-grown industries and weaken India’s cultural heritage in fashion.
The timing of these concerns is critical. With global tariff wars shrinking export opportunities, the domestic market has become the industry’s lifeline. If higher GST rates are imposed, demand could fall further, threatening jobs and destabilizing the sector.
Summing up, CMAI has outlined six compelling reasons why textiles should remain under the 5% slab:
- Textiles are essential, mass-consumption goods.
- Price-based slabs would unfairly penalize necessities such as woolens and wedding wear.
- Traditional and handloom products would face setbacks.
- As the second-largest employer, the sector cannot risk disruption.
- Higher taxation could drive businesses back into the informal economy.
- With exports already under strain, domestic stability must be protected.
CMAI has urged the GST Council to safeguard the industry by ensuring that the entire textile value chain continues under the 5% slab. Representing over 5,000 members and 35,000 retailers, the 60-year-old association continues to be the voice of India’s apparel industry. Beyond policy advocacy, CMAI has also driven sustainability initiatives such as its 2019 SU.RE program, underlining its role in shaping a responsible and resilient future for Indian textiles.
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