The Goods and Services Tax (GST) reform will lift consumer sentiment and create stronger demand for the textile sector, said Amit Agarwal, Group CFO of Raymond Group. He projects 12–14% growth in fabrics and clothing and anticipates significant momentum throughout the holiday and wedding seasons.
As GST cuts are boosting both affordability and momentum across Raymond’s portfolio, Amit is confident of a positive long-term outlook. About half of the company’s domestic sales are derived from fabrics which at present attract only 5% GST instead of the previous 12-18%. This reduces input costs and directly benefits customers.
While expensive suits and jackets costing more than Rs. 5,000 are still subject to 18% GST but are less susceptible to price fluctuations, around 70–75% of clothing items are priced under Rs. 2,500 (US $ 28) and are therefore eligible for the reduced 5% GST rate.
According to Amit, Raymond has already distributed the tax savings via a ‘GST Budget Scheme’ that was introduced at retail locations. “We have already put it into practice, and in the past ten days, we have already seen good traction from customers,” Amit said. Sales have increased by 7.5–8% over the same period last year, indicating the beginning of a rebound.
