Fashion
India’s higher tax on clothing threatens setback for global fashion brands
By
Reuters
Published
September 4, 2025
India’s overhaul of consumer tax stands to make everything from soaps to luxury SUVs cheaper, but global fashion brands such as Zara, Levi Strauss and Lacoste have been spooked by higher levies on all apparel priced at more than $29.
The premium wear segment accounts for about 18% of an apparel industry worth $70 billion, says Datum Intelligence, spurred by a growing number of nouveau riche and brand-conscious youngsters in India.
The biggest tax reform in eight years by Prime Minister Narendra Modi’s government cuts levies to 5% on garments costing less than 2,500 rupees ($29), but items priced above that figure now face a higher levy of 18%.
That will pile pressure on the likes of PVH Corp, Marks and Spencer, Gap Inc, Under Armour, Nike, H&M and Japan’s Uniqlo.
Fashion companies worry about the impact of higher taxes on sales, since aspirational young people consider such purchases as a lifestyle upgrade, but remain sensitive to price, said two Indian garment executives dealing in foreign brands.
“Retail works on wafer-thin margins, and overheads like rents are extremely high,” said the chief executive of a foreign garment brand operating in India, who sought anonymity for fear of government reprisal. “Growth that we were expecting earlier won’t come now.”
The official added, “This is not a luxury. The 2,500-rupee price point is basic now.”
The higher taxes are also a double whammy for domestic garment makers whose thriving U.S. exports business is also reeling from President Donald Trump‘s tariffs of 50%.
India’s reform has not only drastically cut consumption levies on daily essentials and consumer electronics, but dealt a surprise win on Wednesday for pricey SUVs, reducing their tax rate to a flat 40%, versus up to 50% earlier.
Carmaker Mercedes-Benz has been reporting record sales in recent months, as consumption surges.
The higher rate on apparel could spell the “death knell for the industry”, the Clothing Manufacturers Association of India has said, as items costing more than 2,500 rupees are “consumed in large numbers by the common man and middle class”.
Most of the 875 new arrivals listed on Superdry India’s website, for example, are subject to the new 18% tax, with many jackets on offer priced upwards of $170 and shirts at $60.
On the Lacoste India website, men’s T-shirts can cost as much as $99, with not one priced below $29, the new threshold for the higher tax, set to take effect on September 22.
In press statements, the Association has flagged worries about the impact of the higher tax adding to the fallout from Trump’s tariff salvo.
India’s Arvind Fashions for example, holds domestic franchisee rights for Tommy Hilfiger and Calvin Klein retail, but its affiliate, Arvind Ltd, makes foreign brands for export to destinations including the United States, which has a share of roughly 30%.
The Arvind Group did not respond to a request for comment.
In India, foreign premium brands have been luring affluent youngsters by adding retail outlets and e-commerce offerings. Lululemon Athletica plans to enter the market in 2026.
The tax hikes will also apply to apparel from luxury goods makers Louis Vuitton, Dior and Versace.
Some customers may opt for cheaper more tax-efficient purchases while travelling abroad, but the hike to 18% from an earlier slab of 12% will have limited impact on India’s rich, said one luxury industry executive.
Another area of expenditure set for a hit will be clothes bought for weddings. Lavish marriage celebrations are big business, and urban families can easily spend thousands of dollars on items from traditional sarees to men’s jackets.
“Putting these clothes in the 18% slab will result in parents compelled to make inferior clothing for their favourite child on their favourite day,” the clothing association said.
© Thomson Reuters 2025 All rights reserved.
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US brand Calvin Klein unveils Spring 2026 denim with Jung Kook
Directed and shot by Mert Alas, the new chapter sharpens the focus on denim as the ultimate expression of personal style through icon Jung Kook’s distinctive and influential point of view as he lives in the moment.
Calvin Klein, owned by PVH Corp., has unveiled its Spring 2026 denim campaign fronted by BTS icon Jung Kook.
Directed and photographed by Mert Alas, the cinematic film fuses music, movement and city energy, highlighting 90s Straight, Baggy and reworked Trucker silhouettes.
A special appearance by Rosie Perez amplifies the brand’s signature visual storytelling.
The campaign unfolds across a series of immersive worlds, unified and guided by Jung Kook’s style, attitude and way of living. The high-impact film fuses fashion and entertainment, moving to an instantly recognizable soundtrack and brought to life through the artist’s signature choreography and commanding presence. The interplay of music and movement – complete with a cameo from New York City legend Rosie Perez – captures the impact synonymous with Calvin Klein’s iconic visual storytelling.
Calvin Klein jeans are at the center of the wardrobe with hero silhouettes leading the narrative: the effortless attitude of the 90s Straight; the relaxed and nostalgic proportions of the Baggy; and new interpretations of the iconic Trucker jacket — all reimagined with elevated washes and designed for versatility. Casual logo tees and oversized bombers complete the looks, reinforcing denim as both uniform and statement.
“I love Calvin Klein jeans because they’re designed to be lived in,” said Jung Kook. “The looks I wore for this campaign nod to ‘90s style while feeling completely modern. It was exciting to bring together my love of music, dance and fashion against the energy of the city.”
Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged.
Fibre2Fashion News Desk (RM)
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China targets 4.5 to 5% GDP growth for 2026
Premier Li Qiang, who delivered the report at the opening of the fourth session of the 14th National People’s Congress in Beijing, said the growth target is “well aligned with the country’s long-range objectives through the year 2035 and is broadly in line with the long-term growth potential of China’s economy, with favorable conditions in place for achieving this target.”
China has set a GDP growth target of 4.5–5 per cent for 2026, alongside goals to stabilise employment, manage inflation, maintain grain output and cut emissions.
The plan also preserves flexibility for structural reforms under the 15th Five-Year Plan, aiming to balance steady economic expansion with long-term, high-quality and sustainable development.
Main development targets for 2026 also include a surveyed urban unemployment rate of around 5.5 per cent, creation of over 12 million new urban jobs, a rise in the consumer price index of around 2 per cent, personal income growth in step with economic growth, a basic equilibrium in the balance of payments, grain output of around 700 million tonnes, and a drop of around 3.8 per cent in carbon dioxide emissions per unit of GDP.
Qiang said the targets took into account the need to leave room for structural adjustments, risk prevention and reform in the opening year of the 15th Five-Year Plan (2026–30) period, to lay a solid foundation for improved performance in the coming years. Government at local level should, taking into account their own conditions, make solid efforts to deliver positive outcomes, he added.
Analysts said the 2026 target reflects a pragmatic approach in recognising structural and cyclical challenges facing the world’s second-largest economy, while pursuing reasonable growth in line with high-quality development.
Fibre2Fashion News Desk (JP)
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