NEW DELHI — More than 80,000 fashion manufacturers and retailers across India began a new and indefinite strike today, despite government concessions over a proposed increase in excise duties on apparel.
Rallies and protests are planned throughout India over the next few days. These follow earlier closures and rallies protesting the government’s initial plan to boost excise duties on branded apparel to 10 percent.
Finance Minister Pranab Mukherjee on Tuesday unveiled a concession to his initial plan that would have maintained the 10 percent increase in excise duties but would have reduced the amount on which the duty would have been paid to 45 percent of the manufacturers’ suggested retail price instead of 60 percent.
This move failed to appease the industry, and the Garment and Hosiery Manufacturers Association has spearheaded a protest in different cities, creating rare unity among the thousands of small manufacturers potentially affected by this change and who are losing hundreds of thousands of dollars in orders as a result of their closures. The industry employs more than 20 million people, according to estimates, who are expected to be affected by the government decision, which is forecast to raise the price of branded garments, leading to a decline in purchasing power and a subsequent fall in employment. The textile industry is the second largest employer in India, after agriculture.
“We have a very serious problem,” said Mohan Sadhwani, executive director of the Clothing Manufacturers Association of India (CMAI). “The industry is definitely disappointed with the concessions he has offered. We had expected that he would look at it and try to find a practical solution. Ultimately the consumer would have to pay for this, and this will impact consumption, which in turn would affect production and then employment will go down. It is a chain reaction.”