Textiles ministry seeks duty rollback

The Union textiles ministry is seeking a rollback of the 10 percent

excise duty on branded apparels, after all major retailers such as Shoppers Stop, Pantaloons, Westside, Lifestyle, Madura Garments and Arvind Brands among others observed a token strike on March 7. These retailers along with others across India shut down their establishments for the day while protesting against the new levy which will push up the prices of the branded apparel that they sell. Textiles secretary Rita Menon says they will write to the revenue secretary requesting them, because the prices of the finished products in the domestic retail sector which they are trying to develop, would indeed go up.  She added that although from the tax point of view some nominal increase in levy may be allowed to be imposed but 10 per cent is a big burden.

Experts in the textile industry feel about 50,000 apparel brands will be impacted if this duty is imposed. With the rise in prices, the customer market will be affected with people buying less and veering away from the more expensive premium products. Of the total estimated Rs 1,00,000 crores apparel business in India annually, about Rs 60,000 crores comes from the branded apparels of the organized markets, which is a huge market by itself.

Along with major retailers across India, textile associations across India are up in arms against the Union Budget for 2011-12, which has proposed a mandatory Central Excise rate of 10 per cent for branded readymade garments and textile made-ups. The Budget has added fuel to the already mounting problem of the common man who is struggling to meet his basic clothing need in the last one year due to the 150 per cent inflation in raw cotton fiber, 100 per cent in cotton yarn and 50 per cent in readymade garments.