GST on Clothes Above Rs 2,500 May Rise to 18% – Will Woolens, Wedding Outfits, and Handmade Attire Get Costlier? CMAI Warns of Industry Crisis

New Delhi, 3rd September 2025: The government is considering a proposal to increase the Goods and Services Tax (GST) on garments priced above ₹2,500 from the current 12% to 18%. If implemented, the move is expected to hit middle-class consumers and garment manufacturers hard. The Clothing Manufacturers Association of India (CMAI) has cautioned that the decision could “break the back” of the industry.

Reports suggest that the textile sector, already reeling under challenges including the U.S. tariff war, may face further strain if the higher tax is enforced. CMAI warned that such a hike would “cripple the industry” and undo years of progress in formalizing the sector.

What Could Get Costlier?
• Woolen clothes: In northern and eastern states, woolens are a winter necessity, typically priced between ₹3,500 and ₹7,000. With an 18% GST, middle-class households may find them even harder to afford.

• Wedding outfits: Bridal and festive wear, often starting from ₹10,000 to ₹15,000, are already a major expense for families. A higher GST will make these purchases costlier.

• Handmade and traditional clothes: Artisanal and handcrafted garments, which are usually priced higher, could see reduced demand, threatening the livelihood of artisan communities.

A Threat to the Textile Industry
CMAI said the sector has worked tirelessly with government support to transition from unorganized to organized operations, but this potential tax hike risks reversing that progress.

CMAI’s Appeal to PM Modi
Appealing directly to Prime Minister Narendra Modi, the association stated, “The textile industry is the lifeline of India’s heritage. It provides employment to more than 1.2 crore people, including a large number of women and unorganized workers. Hurting this sector will weaken the country’s economy.”

Traders associated with CMAI also expressed concern that the proposed 18% GST on garments above ₹2,500 would not only burden middle-class families but also endanger jobs and traditional crafts.