South India Garment Association (SIGA) has strongly opposed to the proposal of two per cent excise duty on branded garments in the union budget and said small and medium garment brands will be affected adversely and the cost of the products will increase by seven to eight per cent RSP.

The Association in a letter to union finance minister, Arun Jaitley, said similar move was initiated twice by the previews governments at the centre earlier, but they had to roll back due to negative impact.

“While we are heading towards GST regime, re-introduction of excises duty on garments may lead to huge confusion and great fall will down size garment manufacturing sector impacting employment. At such adverse atmosphere, levy excise of duty will lead to garment industry towards more slowdown which will result to under-capacity production, the Association said.

Garment industry is enabling to play vital role in the Prime Minister’s vision of start-up-India. It has all the components of creating huge employment, attracting FDI, large opportunities of export and adequate consumption in domestic market, SIGA added.