The Indian garment industry has raised alarm over the government proposal to increase the Goods and Services Tax (GST) on apparel priced above Rs 2,500. The Clothing Manufacturers Association of India (CMAI) has cautioned that such a move would hit middle-class consumers hard and disrupt an already fragile sector.

Under the proposed changes, garments above the Rs 2,500 mark would fall into the higher tax bracket of 18 percent. According to CMAI, this adjustment could make woolen wear and wedding apparel significantly more expensive, adding further pressure to household budgets at a time when consumers are already coping with rising costs.

Industry experts believe the impact will not stop at consumer spending. The association warns that the increase in tax burden could lead to shrinking demand, slower production cycles and potential job losses across the value chain. The organised garment sector, which employs millions and contributes heavily to exports, may lose ground to the informal sector that thrives on lower-cost production.

CMAI also highlighted that the industry is already facing challenges from global tariff issues, heightened competition and supply chain disruptions. The proposed GST revision, it said risks aggravating these concerns and weakening the competitiveness of Indian apparel in both domestic and international markets.

For many families, particularly in colder regions, woolen garments are not a luxury but a necessity. By raising their cost, the tax reform could inadvertently push buyers towards cheaper, unorganised alternatives, reducing revenue for the government and harming established businesses.

The association has urged policymakers to reconsider the proposed slab, emphasising the need to strike a balance between revenue generation and the sustainability of the textile and garment industry, which remains one of the largest employers in the country.