
A unanimous resolution was passed by the 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.

- 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. A tailored PLI scheme for the Garment sector will better reflect the industry’s unique characteristics and investment patterns, thus encouraging greater industry participation and benefits.
- 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. Equal priority will protect their financial exposure, boost confidence in supplying to large Corporations, and ultimately contribute to higher trade volumes and tax collections.
- 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.