Demand of branded garments could be hit, say retailers

New Delhi: Retailers are worried that demand for branded garments will take a further hit following an increase in excise duty on items worth over Rs 1,000 announced in the Budget as they would be forced to pass on the burden to consumers.

“The two-fold increase in taxes on branded apparels is disappointing, as the apparel industry is facing slowdown due to global slowdown,” Future Retail joint MD Rakesh Biyani said.

He further said: “Due higher excise duty, domestic demand could be impacted, causing a double blow to the apparel manufacturers who are already hit by global slowdown.”

Echoing his views, Woodland MD Harkirat Singh said: “Increase in excise will lead to more problems. Our margins will be squeezed and we will be forced to pass on the cost to the customers.”

Shoppers Stop MD Govind Shrikhande said: “Consumer demand which is already muted could get impacted further.” He added the additional excise duty and hike in service tax to 15 per cent is likely “to impact consumer spending in the respective categories”.

Mr Biyani said: “Considering higher costs and excise duty, there could be a price increase of 5-6 per cent.” Mr Singh said the price increase could be from next season onwards as inventory for the upcoming summer season is already ready.