Garment Prices To Rise By 40% In Festive Season

With the festive season round the corner, most retailers are clearing old stocks to make way for new ones. However, new stocks which are soon to hit the market will sport a heavier price tag.

Garments are expected to cost 35% to 40% more this festive season, thanks to hike in excise duty as well as simultaneous rise in input costs.

A levy of 10% excise duty will be passed onto customers while rise in input costs such as cotton will contribute to a further rise of 15%. Labour charges have also increased by 15% this year.

As a result, a pair of jeans, trousers or shirts will be more expensive by 40%.

"Since clothing is one of the basic needs, it is witnessing rise in demand by 20% or more annually. Even if global meltdown hits India, garment producers have already got orders till November this year. The demand is robust," said Vijay Purohit, president of Gujarat

Garment Manufacturers Association (GGMA). However, supply is a bit restricted. "Due to labour shortage, many garment manufacturers, despite paying higher labour charges, might not be able to tackle rising demand. Clubbed with other factors, such as hike in excise duty along with rise in cotton prices, garments are expected to cost 40% more," said Sunil Gandhi, former president
of GGMA.

Given these factors, attractive offers such as "Buy 1 get 2 free" will be difficult to find around Navratri and Diwali this year. Purohit said, "Earlier, due to sufficient supply and overheads under control, it was possible for garment manufacturers and retailers to come up with such attractive schemes. However, this now seems difficult. Even if any retailer comes up with such schemes, the prices quoted will be very high."

Purohit did not think the slowdown would hitgarment manufacturers in Gujarat.

"Due to strong domestic growth, slowdown is not expected till end of this year. It seemed like a slowdown a couple of months back as demand was almost stable. However, garment manufacturers have now got orders till end of 2011," he said on the sidelines of the inauguration of GGMA's 18th National Garment Fair on Saturday.

The fair was inaugurated by Kaushik Patel, chairman of 20 Points Implementation Programme Committee, Government of Gujarat in the presence of the mayor, Asit Vora, and other GGMA members.

The three-day trade exhibition is an annual event of GGMA.

Speaking on the occasion, Purohit said, "This year the fair is expected to attract over 25,000 trade visitors.”