Retailers say the excise levy will pinch consumers who are already paying 15-20% more for clothes than they did last year. Cotton prices, year-on-year, have doubled and most brands were forced to hike prices by 10-25%.
If you are planning to shop for clothes on Monday, it might be a good idea to postpone it by a day. Apparel retail stores across the country will remain closed on Monday to protest against the 10% excise duty imposed on branded apparel in the Union budget 2012.
More than one lakh stores, including those of retail majors such as Pantaloon Retail India, Shoppers Stop, Provogue, Reliance Trends, Pepe Jeans, S Kumars Nationwide Ltd (SKNL) will participate in the strike. At malls, while apparel stores will remain shut, specialty stores selling books and food will remain open.
Retailers say the excise levy will pinch consumers who are already paying 15-20% more for clothes than they did last year. Cotton prices, year-on-year, have doubled and most brands were forced to hike prices by 10-25%.
Last week, apparel industry bodies — Clothing Manufacturers Association of India (CMAI) and Federation of Retailers Traders Welfare Association (FRTWA) — started circulating text messages to manufacturers and retailers to galvanise support for the strike.
On Friday, more than 50,000 garment manufacturing units across India remained shut, resulting in a loss of Rs150 crore. As per industry estimates, these units manufacture garments worth Rs 40,000 crore annually.
“It’s not just about branded apparel but also the mom-n-pop stores that sell branded clothes,” said Ashesh Amin, director, apparel and retail, SKNL.
Viren Shah, president, FRTWA, said that one lakh stores staying closed on Monday will mean a loss of Rs150 crore worth of sales.
Shah said there was no need to impose excise duty on the garment sector as the government has already indicated the rollout of Goods and Service Tax (GST) in 2012. “There is a wrong impression that branded garments have a huge margin. This industry is already suffering from rise in prices of raw materials and cotton by more than 100% in one year and it doesn’t make sense to put an extra burden of excise of another 10%,” he said.
CMAI is hoping to persuade members of parliament and chief ministers of all states. A meeting is likely next week between the organisation and the Union revenue secretary. FRTWA is trying to mount pressure on the government, while trader associations in Kerala and Tamil Nadu are also trying their best to resolve the issue.
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