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Indian garment makers, retailers urge excise duty cut

02
Mar '12
Apparel manufacturers and retail traders in India have requested the Government to reduce the excise duty from the present 10 percent to one percent, as the garment sector is passing through a troubled phase.

The clothing sector in India has witnessed a 17 percent decline in sales during the initial nine months of current fiscal.

Moreover, in spite of extending the end-of-the-season sales (EOSS) period, the sector continues to hold an inventory of Rs. 14 billion. To lessen their inventory levels, retailers are offering heavy discounts of over 40 percent on maximum retail price, which would result in an estimated loss of Rs. 40 billion.

Hence, the Clothing Manufacturers' Association of India (CMAI), the most representative Association of the Indian apparel industry with a membership base of over 25,000 manufacturers, exporters and retailers, has written to the Ministry of Commerce, seeking cut in excise duty rates.

Rahul Mehta, President of CMAI, said the 10 percent excise duty on branded apparels has proved to be a major setback for the country's garment industry, which had grown tremendously during the last 8-10 years.

He said the garment sector in India grew at 35 percent compound annual rate, prior to the levy of excise duty in last year's Budget. Post-excise duty, clothing sales have drastically declined, he added.

The CMAI head further said that the industry needs a breather in the form of reduction in excise duty owing to increase in the cost of labour and raw materials.

Fibre2fashion News Desk - India


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