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Inverted duty structure may raise garment prices by 7 per cent, say experts


The government’s approval of inverted duty structure on apparels costing above Rs 1,000 may increase their prices by about 7 per cent, says Sanjay Jain, Chairperson, Textile Expert Committee, Indian Chamber of Commerce. The GST Council has been deliberating on correcting the anomaly in textiles and had announced a three-month waiting period till December at its meeting in Lucknow last week before making the change. The changes will, therefore, take effect from January 2022.

Jain says garment prices have already shot up 20 per cent in the last one year because of increase in the prices of cotton and other fibers. A further increase in rates may severely impact small garment manufacturers. It may also lead to a rise in unaccounted activities, adds Vinod Gupta, Co-Chairman, Textiles Sub-Committee, Bharat Chamber of Commerce, and Senior Vice-President, West Bengal Hosiery Association.

The industry also expects a rise in working capital requirement especially for the MSME textile manufacturers if the rates are increased, says Ramesh Agarwal, Past President, Merchants Chamber of Commerce and Industry.