ANGALORE: Garment retailers across the country will observe a day-long strike on Monday to protest against the 10% excise duty on readymade garments proposed in the Union budget. Retail giants, including Shoppers Stop, Pantaloon, Westside, Globus and Arvind Brands, are keeping their stores shut to protest against excise imposed on branded apparel.
"Excise duty on readymade garments is uncalled for. With the government planning to introduce GST next year, we have to switch to a new tax regime. There is no logic in introducing excise on readymade garments now. The government should understand that the industry is reeling under high input costs. Any further increase will make things worse," said Rahul Mehta, president of Clothing Manufacturers Association of India (CMAI).
Kishore Biyani, CEO of Future Group, said it was "a double whammy" for the industry. "Imposing excise duty has come at a time when retailers are grappling with high raw material costs. Why should we burden the customer with additional costs especially in a high-inflation environment?" he asked.
Suresh J, MD of Arvind Brands & Retail, said the company would be shutting down 400 stores, including those for Flying Machine, Arrow, US Polo, Megamart, Izod, Energie and GANT, across India to support the strike.
Cotton prices continue to head north due to a tight supply situation. Global markets are feeling the squeeze as floods destroyed a majority of crops in Pakistan and Australia. "In 2009, cotton prices were hovering around Rs 23,000 per candy (356 kg) . This has shot up to Rs 60,000 now. Manufacturers are already facing a tough time in sourcing raw material and are not in a position to absorb the duty," said Sajjan Raj Mehta, the former president of Karnataka Hosiery and Garments Association.