CITI warns of job losses, economic impact from proposed GST hike on garments

The Confederation of Indian Textile Industry (CITI) has raised concerns over the proposed GST rate revisions on ready-made garments, warning of potential far-reaching impacts on the textile industry, employment, and the overall economy.

Under the proposed framework, garments priced up to Rs 1,500 will continue to attract a 5% GST rate. However, garments priced between Rs 1,500 and Rs 10,000 will face a steep increase to 18%, and those priced above Rs10,000 will fall under the highest tax slab of 28%.

The textile industry, already facing economic strain, stands to lose up several jobs, particularly in small and medium enterprises (SMEs) involved in spinning, weaving, and garment manufacturing.


The proposed GST hike is expected to heighten price inflation, disproportionately affecting price-sensitive consumers. CITI has urged the government to reconsider the proposed GST rate hike and adopt a balanced approach that fosters growth in the textile sector while ensuring consumer affordability.

"Higher taxes on garments tied to celebrations and festivals will slow down consumption at a time when demand is already under pressure. This could have a ripple effect on the economy, and the textile sector is a cornerstone of India’s economy, providing livelihoods to millions. Policies must nurture its growth rather than create hurdles," said Rakesh Mehra, Chairman, CITI.