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.
Fashion
Germany’s BOSS secures landmark Australian Open partnership
The partnership is rooted in a shared mindset: ambition, world-class performance, global relevance, and a bold confidence that defines both BOSS and the Australian Open. As a cornerstone of BOSS’s cultural strategy, the collaboration creates a powerful platform to connect with fans at scale, unlock new audiences, and showcase the full world of BOSS through its collections, ambassadors, and experiences.
BOSS will become Official Lifestyle Outfitter of the Australian Open from 2027, marking a key step in its sport and culture strategy.
The brand will dress up to 4,000 staff and elevate on- and off-court style through tailored looks, activations and merchandise, strengthening its global presence in tennis while redefining the tournament’s visual identity.
“We are absolutely excited to partner with the Australian Open, which is one of the most dynamic and globally followed sporting events worldwide,” stated Daniel Grieder, CEO of HUGO BOSS. “This collaboration is a natural fit for us, as it brings together two brands that share the same commitment to excellence, innovation, and creating extraordinary experiences. Tennis is part of BOSS’s DNA. The partnership therefore
marks an important step in our strategy to further drive the brand’s positioning at the intersection of sport, lifestyle, and global fan engagement.”
“The Australian Open has always been about more than just great tennis – it’s about atmosphere, innovation, and setting the benchmark for major sporting events worldwide,” Tennis Australia CEO Craig Tiley said. “BOSS is a global brand with impeccable credentials in sport and style, and together we will enhance how our tournament looks, feels, and connects with fans from around the world.”
In its new role as the tournament’s Official Lifestyle Outfitter, BOSS is set to transform the visual identity of the Australian Open like never before. Dressing up to 4,000 staff, officials, umpires, and ball kids, BOSS will make an unmistakable impact, setting its signature confident style from the very first moment. The result is a bold step change: a unified, elevated, and distinctly modern aesthetic that will be visible across every corner of Melbourne Park. A curated palette of refined shades, subtle nods to the brand’s tailoring expertise, and easy-wear silhouettes engineered for the Melbourne heat come together to signal a new era in tournament style – perfectly in tune with the fast-paced, high-energy spirit of the event.
BOSS branding will also be displayed around the venue, including inside the iconic Rod Laver Arena. Beyond the tournament’s courts, the collaboration will extend to exclusive replica teamwear, merchandise, and off-court capsules. Dedicated pop-up stores, immersive on-site fan activations, an elevated guest experience, and further special events will bring the BOSS attitude to every part of “The Happy Slam.” Online and in store, impactful storytelling and curated initiatives will also share the sunshine spirit of Melbourne with tennis fans around the globe.
In a powerful opening serve that ignites excitement and sets the tone for what’s to come, the brand has created bold visuals to accompany today’s announcement. Bridging the worlds of fashion and sport, the imagery reimagines tennis balls in tactile fabrics – from rich wool to soft alpaca – as a nod to BOSS’s roots in craft and tailoring.
The brand’s history in tennis dates back to the 1980s, when it embarked on a 15-year-long sponsorship of the Davis Cup, the world’s largest international team competition in men’s tennis. Most recently, BOSS has welcomed star players Taylor Fritz and Matteo Berrettini, as well as emerging talents Noma Noha Akugue and Ella Seidel, as brand ambassadors, and since 2022 has served as title sponsor of popular ATP 250 tournament the BOSS OPEN in Stuttgart. Through the Australian Open partnership, BOSS is cementing its presence in tennis at one of the world’s most prestigious tournaments and propelling its position as a leading global style authority at the intersection of sport and culture.
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 (JP)
Fashion
Long energy disruptions to raise pressures on SEA nations: S&P Global
Sovereign ratings in Southeast Asia are under risk due to the Middle East conflict. Fiscal and external metrics underpinning the ratings will be strained if the global energy market does not begin to normalise in the next few months, the credit rating agency noted.
Prolonged energy disruptions will raise fiscal and external pressures on Southeast Asian nations, according to S&P Global.
Indonesia is more vulnerable to weakening credit metrics if the war continues and energy prices remain high.
Vietnam’s strong economic growth, its booming export sector and relatively unencumbered government balance sheet will act as ballast against the energy market dislocation.
If the longer-term impact of the war is severe, the robust growth prospects of economies dependent on imported energy may also be impaired, weakening economic support for the ratings, it said.
Its base case assumes the war’s intensity will peak and the Strait of Hormuz’s effective closure will ease during April, but some disruptions are likely to persist for months.
A prolonged surge in the cost of energy imports—coupled with a loss of foreign exchange reserves—is one risk scenario that could materially weaken Vietnam’s external liquidity position, the credit rating agency said in a regulatory article.
And a sharp increase in the fiscal deficit, in the unlikely event that economic growth also decelerates abruptly, could also erode the government’s more favourable leverage profile, it noted.
If these scenarios persist beyond six months and the government is unable to mitigate the impact on credit metrics, they could erode Vietnam’s robust credit buffers at the current ratings level.
If the pressure on the economy causes capital outflows, the authorities may use foreign exchange reserves to support the exchange rate.
The budget deficit in the country could also widen if the energy disruption drags on. Outcomes will ultimately be tied to the duration of the conflict and the disruptions, it said
Meanwhile, the sovereign ratings on Indonesia (BBB/stable/A-2) are sensitive to weakening fiscal or external credit metrics resulting from the war.
Potential risks include higher energy prices raising budgetary subsidy payments, weighing on deficits; government interest payments rising if accelerating inflation fuels a further increase in market interest rates; and importing more expensive oil products widening the current account deficit (CAD).
The government’s response to the energy disruption may contain some of the damage to its fiscal performance, S&P Global Ratings noted. But, higher commodity prices could also boost government revenue. This helps to limit the increase in the size of the fiscal deficit and reduces upward pressures on the budgetary interest payment ratio.
Indonesian exports have grown this year, but the growth momentum is tempered by declining sales of energy products. With the sharp rebound in energy prices, Indonesian export growth could rise further to mitigate the increase in oil imports.
Overall, Indonesian credit metrics are likely to weaken marginally under the credit rating agency’s base case.
As a commodities exporter, Indonesia may see some mitigating developments offsetting some of the pressures on the sovereign ratings, particularly if there is a broad-based strengthening of commodities prices. This could help to turn around some of the worsening trend in the country’s credit metrics once the situation normalises.
Fibre2Fashion News Desk (DS)
Fashion
2026 growth in Africa to drop by up to 0.2% due to Iran war: Report
The report titled ‘Impacts of the Conflict in the Middle East on African Economies’, cautions that African economies, which were slowly recovering from the severe consequences of COVID-19, the Russia-Ukraine war and rising trade tariffs, could be among the most affected by the ongoing conflicts in the Middle East.
Growth in African countries is projected to decline by up to 0.2 per cent this year due to the Middle East crisis, according to a joint policy document by the African Union Commission, the African Development Bank Group, the UN Economic Commission for Africa and the UN Development Programme.
The main effects of the conflicts on Africa include surging prices of hydrocarbons, food products and fertilisers.
Kevin Urama, chief economist and vice president for economic governance and knowledge management at AfDB who presented the report on the sidelines of the Spring Meetings of the International Monetary Fund and the World Bank in Washington, DC, recently, urged African governments not to panic or take hasty decisions that could harm their fiscal balances.
The main effects of Middle Eastern conflicts on African economies include surging prices of hydrocarbons, food products and fertilisers, noted the report.
“Eighty per cent of the oil imported into Africa comes from this region, as well as 50 per cent of refined petroleum,” said ECA executive secretary Claver Gatete.
The report recommends, in particular, strategic inflation management to ensure short-term price stability expectations. It cautions oil-exporting countries to adopt strict fiscal discipline by managing windfall revenues prudently, while strengthening debt-monitoring, and using energy reserves strategically.
Where fiscal space allows, it advises that temporary and targeted social protection measures be deployed to shield the most vulnerable populations from the crisis, added the report.
However, the report urged governments to avoid broad-based subsidies that could worsen long-term fiscal deficits, and to diversify sources of energy, inputs and food supplies.
It also recommends that African governments strengthen regional and intra-African trade in oil and fertiliser markets to enhance resilience; and ensure smooth inter-institutional coordination to harmonise strategic monetary and fiscal policies.
At the same time, the report calls upon development partners, multilateral banks and development finance institutions to provide emergency support to African countries through crisis response measures and technical assistance.
It also recommends a speedy operationalisation of the African Continental Free Trade Area (AfCFTA), while strengthening large-scale domestic capital mobilisation.
The report also suggested Africa to diversify its energy mix by accelerating investments in renewable energy and the gas sector.
Fibre2Fashion News Desk (DS)
-
Fashion4 days agoFrance’s LVMH Q1 revenue falls 6%, shows resilience amid Iran war
-
Sports1 week agoThe case for Man United’s Fernandes as Premier League’s best
-
Entertainment1 week agoPalace left in shock as Prince William cancels grand ceremony
-
Business1 week agoUK could adopt EU single market rules under new legislation
-
Entertainment5 days agoIs Claude down? Here’s why users are seeing errors
-
Fashion1 week agoEnergy emerges as biggest cost driver in textile margins
-
Tech1 week agoA Lot of Shops Won’t Fix Electric Bikes. Here’s Why
-
Business1 week agoDelta Air Lines unveils first new Delta One suite in premium cabin arms race
