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Fall in excise duty may not impact Indian apparel prices
Mar '12
Mr Rahul Mehta
Mr Rahul Mehta
The next time you enter an apparel garment retail store; do not expect prices to have fallen, following the relief provided by the finance minister in the budget.

The finance minister had provided a marginal relief by increasing the abatement to 70 percent from 55 percent on branded clothing.

This move brought down the effective excise duty from 4.5 percent earlier to 3.6 percent, or down by just 0.9 percent, too small to create an impact.

“It is very unlikely that there will be a price cut on branded garments because there is only a 0.9% reduction in excise duty”, a very vocal Mr Rahul Mehta – President of Clothing Manufacturers Association of India (CMAI) revealed to fibre2fashion.

He continued by saying, “Basically, this only sends a signal that the prices will not go up further but otherwise I don't see a clear advantage either to the retailers or the consumers. It is like keeping a status quo.

“However, some of the bottom lines might go up. Compared to last year, cotton prices etc. have been lower, so overall judgment is that the prices in the market are 5% lower than last spring-summer”.

“But, this has got nothing to do with excise; it is the overall scenario. The economic situation is not very optimistic, so it is likely that, a few manufacturers or retailers have squeezed costs or margins and reduced prices”, he winded up by saying

Fibre2fashion News Desk - India

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