One Industry One Voice Garment Trade Associations across India

14 January 2025: A unanimous resolution was passed by Clothing Manufacturers Association of India (CMAI) and 14 prominent garment trade associations from all over India as part of ONE INDUSTRY, ONE VOICE, a unique initiative to strengthen the domestic garment industry. The resolution was submitted to the Group of Ministers (GoM) to abandon a proposal to change the GST rates in the garment sector and maintain the current structure of 5% and 12%. Perhaps this is the first time that so many sizable associations from all over the nation have come together to discuss shared programs and issues and to show a unified front to the government.

The meeting’s primary goal was to promote a coordinated, group strategy to ensure long-term growth. Important budget suggestions to support the garment trade, promote sustainable growth, and meet pressing sector demands were among the other significant decisions. The following are the five main suggestions.

Abandon the proposed GST rate revision: All the leading Garment Associations across India have already raised serious consequences which includes large scale disruption affecting manufacturing, pricing, and consumer demand and pushing businesses toward informal channels if any GST rate revision is endorsed by the Group of Ministers (GoM). The Group of Associations have cautioned to immediately drop any such plans, emphasizing that any such revision will deeply harm industry growth, affordability and employment stability as it will lead to inflated prices, burdening price-sensitive consumers and slowing demand, especially for festive and wedding-related apparel.

Tailored PLI Scheme for Garment Sector: Introduction of a distinct Production Linked Incentive (PLI) scheme specifically for the Garment sector was collectively deliberated as the current PLI structure demands significant investment levels more suited for the textile industry and does not align with the operational scale and investment capacity of Garment manufacturers.

Secure MSME’s in Insolvency Proceedings: The Government must formulate a policy to ensure that MSME’s are treated as secured creditors during Insolvency and Bankruptcy proceedings against large Corporates. Currently, most recoverable funds are allocated to secured creditors like Banks leaving MSME’s with minimal or no Compensation.

Rectifying Section 43B(h) for Equal Opportunity amongst MSMEs: The changes to Section 43B(h) of the Income Tax Act is hurting smaller manufacturers rather than helping them as large buyers are preferring to purchase from bigger manufacturers. The distinction between Micro, Small, and Medium segments within MSME’s is creating a huge disadvantage to the Micro and Small segments. Therefore, it is recommended to either:
eliminate this provision or
extend the rule to the Medium Segment, ensuring equal growth opportunities, or
introduce a gradual reduction of the payment period: 90 days in Y1, 60 days in Y2, and 45 days in Y3.
Interest Subsidy for the Domestic Garment sector: It is urged to introduce an interest subsidy for the Domestic Garment sector, similar to the support being provided to the Export sector. The Domestic Garment industry does not require heavy capital investment, but it does need assistance with interest costs. While MSME support is essential, they deserve special attention due to its unique challenges. Despite the lack of incentives, the Domestic sector has shown significant growth and targeted assistance would further boost its potential.

“We are happy that all the leading associations have come together under Group of Associations to address these concerns and create a unified voice for the industry,” said Santosh Katariya, President of Clothing Manufacturers Association of India (CMAI), in a statement following the meeting. As CMAI, we are dedicated to providing the government with thorough suggestions on important issues including GST, supply chain disruptions, rising input costs, and the necessity of policy reforms. These are necessary to guarantee the apparel industry’s long-term expansion and viability.

Rahul Mehta, Chief Mentor, Clothing Manufacturers Association of India (CMAI) stated, “Even though consumer attitude is changing, it is important to understand that the industry will still face difficulties if prompt policy changes are not made. Policies that support the apparel industry’s expansion and guarantee a well-rounded strategy that promotes both short-term stability and long-term sustainability are necessary. Unlocking the sector’s full potential and converting favorable consumer trends into observable, long-term industry growth would require a supporting legislative framework.

The Garment Exporters Association of Rajasthan (GEAR) in Jaipur, the Bangalore Apparel Manufacturers Association (BAMA) in Bengaluru, the South India Garment Association (SIGA) in Bengaluru, the Knitwear & Apparel Manufacturers Association of Ludhiana (KAMAL) in Ludhiana, the Woolen Garment Manufacturers Association in Ludhiana, the Tirupur Exporters Association (TEA) in Tirupur, the Federation of Surat Textile Traders Association (FOSTTA) in Surat, GVS in Surat, the Indore Readymade Vastra Vyapari Sangh (IRVVS) in Madhya Pradesh, the Gujarat Garment Manufacturing Association (GGMA) in Ahmedabad, the Sholapur Garment Manufacturers Association (SGMA) in Maharashtra, and the Noida Apparel Exporters Cluster (NAEC) in Noida, Uttar Pradesh, were among the other prominent garment and textile trade associations that took part.

With a strong retail market size of INR 5.4 lakh crore, the clothing sector is a vital component of the Indian economy. In addition to its economic importance, the industry contributes significantly to employment, supporting the livelihoods of some 39 million people, including 16 million blue-collar jobs in domestic manufacturing. Even while the sector has shown remarkable endurance and growth, there is still a great deal of room for even more success.

About CMAI ….
Established sixty-one years ago, The Clothing Manufacturers Association of India (CMAI) is the most representative association of the Indian apparel industry having over 5000 members and serving more than 35,000 Retailers across India. Its Membership consists of Manufacturers, Exporters, Brands and ancillary industry. CMAI has contributed immensely towards development of the industry. It acts as a catalyst of Change, Evolution, and Transformation by regular interactions with the Government to encourage industry-friendly policies on one hand, and with the Members to keep pace with the dynamics of market forces on the other. CMAI has been responsible for influencing several measures in policies of the Government including GST, PLI, Duty Drawback, Export Promotion Schemes, FTAs, etc.

www.cmai.in