The Telangana State Federation of Textile Associations has voiced concern over the Goods and Services Tax (GST) Council’s decision to impose an 18% levy on garments priced above Rs. 2,500 (US $ 28). The body has appealed for a uniform 5% levy on all readymade garments and made-ups, regardless of cost.
Federation president Ammanabolu Prakash said in a statement that the textile and apparel sector contributes about 2.3% of India’s GDP, accounts for around 13% of industrial production, and directly employs more than 45 million people, including many women and rural workers.
He argued that the move to tax garments above Rs. 2,500 (US $ 28) at a higher rate creates “a sharp tax discontinuity between affordable and mid-priced garments”, which he warned would act as a price shock for consumers and potentially lead to lower sales volumes in a labour-intensive sector.
According to Prakash, the additional 13 percentage-point burden on garments in the mid and upper-mid income brackets could significantly influence consumer purchasing behaviour, thereby affecting overall demand in the domestic market. He noted that India’s readymade garments market, valued at an estimated US $ 103.5 billion in 2024, is expected to expand, making domestic sales a vital component of the industry’s economic outlook.
He further cautioned that any reduction in sales volumes could result in lower capacity utilisation, job losses, and income declines for millions of seamstresses, machinists and allied workers.
