Ensure tax rates on garments priced above Rs 2,500 are not raised, urges CMAI

04 September 2025, Mumbai 

Clothing Manufacturers Association of India has urged Prime Minister Narender Modi to ensure that the tax rates on garments are not raised.

As per reports, the tax on garments above Rs 2,500 is likely to be increased to 18 per cent from its current level of 12 percent.

CMAI has urged the Prime Minister to intervene and protect the garment industry from such a drastic damage as it is the lifeline of India’s textile heritage and employer of over 12 millions, comprising largely of women and semi-skilled and unskilled workers.

Implementation of the new tax rate would spell a death knell to the industry that is already reeling under the crisis of the American tariff wars. If the GST Council does in fact keep Rs.2,500 as the cut-off level for the 5 per cent slab, and charge all products above this level at 18 per cent, it will mean a cruel blow to the aspiring middle-class and the organized sector of garment manufacturers – who are the worst affected by the tariff wars, opines CMAI.

* Woolen garments: These are sections of the industry which manufacture products that are more expensive due to the nature of the cost of raw materials and artistic hand-work involved. For instance, almost the entire range of woolen garments is currently priced between Rs 3,500 to Rs 7,000. Adding these garments in the 18 per cent slab will prevent the middle class from buying woolen clothes during the cold winters.

* Wedding clothes: It is the dream of every parent to dress their child in the best possible wedding clothes they can afford – and even at the lowest middle-class levels, the wedding clothes cost anywhere between Rs,10,000 – 15,000 upwards. Putting these clothes in the 18 per cent slab will compel parents to make their children wear inferior quality on their wedding day.

* Traditional and artisan made clothing: Due to its character of being hand-made, and the time taken to produce individually crafted pieces, most of these products are priced above Rs.2,500. Adding these garments to the 18 per cent slab will kill the traditional craft and hit the artisan community hard, believes CMAI.

The move will also undermine the efforts of the government and industry associations who have worked hard to transform the industry from the informal sector to the formal sector.

The industry is already in the midst of an unprecedented crisis with the US tariff wars. At this time, the need of the hour is a strong, resilient, and vibrant domestic sector. However, if this sector is also hit by such an unprecedented price increase in the large product categories, it will almost kill the industry, CMAI points out.

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