We seek tailored PLI scheme, MSME protection during insolvency & retaining existing GST rates
President of The Clothing Manufacturers Association of India (CMAI), Santosh Katariya, is a seasoned professional with close to two decades of experience in the readymade garment manufacturing sector. Katariya’s longstanding dedication to the industry and his career marked by leadership and advocacy well positions him to guide the CMAI towards new milestones in its mission to support India’s apparel manufacturing sector.
Before assuming the presidency, he served CMAI in various capacities, including four years as the honorary general secretary. His role as the regional chairman of the western region further cemented his reputation as a key advocate for garment manufacturers, particularly in addressing regional and national issues.
Beyond his contributions to CMAI, Katariya is also the managing director of Peppermint Clothing Pvt Ltd. What began as Crystal Apparels evolved into Peppermint in 2006, one of the country’s biggest kidswear brands. Under the stewardship of Katariya, the company has grown into a trusted name in the industry, known for its quality and innovative approach. His hands-on experience in running a successful garment business lends him a unique perspective on the challenges faced by the garment manufacturers, especially ones operating in the highly competitive and price-sensitive domestic market.
In a recent discussion with Fibre2Fashion, Katariya delved into the key issues facing the apparel industry. The conversation touched upon critical topics such as market dynamics, manufacturing challenges, and areas of growth and opportunities. With the Union Budget 2025-26 on the horizon, the dialogue gained even greater significance as Katariya outlined the pressing needs of the industry in terms of policy and fiscal interventions required to sustain its growth.
He also shed light on the manufacturing landscape, emphasising the vital role played by the small and medium enterprises (SMEs), which account for a substantial share of the industry’s output. Recognising their importance, Katariya advocated for enhanced financial support to help these enterprises thrive.
With his experience and strategic vision, he aims to position CMAI as a driving force behind sustainable growth and global competitiveness for India’s apparel manufacturing sector.
Following are the excerpts from the interview with CMAI president Santosh Katariya:
To start with, what is your take on the current state of the market?
The market is somewhat good, but we are still grappling with growth challenges. The upcoming season appears promising, but our focus is already shifting to the next one. This summer season should perform reasonably well.
However, achieving growth remains a significant hurdle. If we manage to maintain last year’s figures, that would be a positive outcome, in my view.
In India, nearly 90 per cent of the garment industry comprises MSMEs. Unfortunately, large-scale units are not emerging, particularly in Maharashtra. This is largely due to policy-related issues, such as the uncertainty surrounding GST rates. We are not in favour of any revision of GST rates in the garment sector and advocate retaining the existing structure of 5 per cent and 12 per cent.
We are concerned about potential consequences if GST rates are modified. These include large-scale disruptions in manufacturing, pricing, and consumer demand, as well as a shift towards informal channels. A revision would adversely impact industry growth, affordability, and employment stability.
It could also inflate prices, burden price-sensitive consumers, and slow demand.
These issues are deterring investments and the installation of new capacities, which ultimately hinders growth.
The Union Budget 2025-26 is round the corner, what are your expectations from the Government?
We have a few key expectations. One of the most significant is the introduction of a tailored Production Linked Incentive (PLI) scheme specifically for the garment sector. The current PLI scheme requires high investment levels, which are more suited for the textile industry than for garment manufacturers. A distinct PLI structure would better reflect the operational scale and investment capabilities of garment businesses, encouraging greater participation and resulting in more benefits for the sector.
Another critical issue is the protection of MSMEs. We urge the government to implement policies ensuring that MSMEs are treated as secured creditors during insolvency and bankruptcy proceedings involving large corporates. Currently, most recoverable funds are allocated to secured creditors like banks, leaving MSMEs with little or no compensation. Granting MSMEs equal priority will safeguard their financial exposure, foster confidence in dealing with large corporations, and boost trade volumes and tax collections.
Have you been able to communicate these concerns to the Government?
Not yet. However, the CMAI, along with other leading garment trade associations, has taken significant steps in this regard. Recently, these associations met under the initiative ‘One Industry, One Voice’ and passed a unanimous resolution for submission to the Group of Ministers (GoM), highlighting key budget recommendations aimed at fostering sustainable growth and addressing the critical industry needs.
Sustainability is a major focus globally. What is the scenario in the domestic sector?
Sustainability is indeed gaining attention in the domestic market. At CMAI, we have been organising seminars and raising awareness on the topic. Delegations have travelled to global hubs like London and Copenhagen to learn and share knowledge. We are also actively participating in events like Bharat Tex to promote sustainable practices.
However, sustainability comes at a cost. Currently, it remains a challenge for the domestic players even though exporters are adopting these practices. While awareness is growing, achieving widespread adoption requires collective efforts from all stakeholders, not just a single association.
How does the domestic industry fare in terms of technology adoption?
When it comes to technology, we are not significantly behind other countries. However, challenges like trained labour availability and insufficient government support persist. Lack of subsidies and high interest rates are major issues that impede technological advancements and the establishment of large factories.
We recommend the Government introduce an interest subsidy for the domestic garment sector, similar to the support provided to the exporters. While heavy capital investments are not required in the domestic industry, assistance with interest costs is crucial. MSMEs, in particular, deserve targeted support due to their unique set of challenges.
Despite these obstacles, the domestic sector has shown impressive growth, and further assistance could unlock even greater potential.
There are positive developments as well. For example, the establishment of textile parks like the ones in Amravati and Chhattisgarh, show lot of promise. These initiatives are expected to provide a boost to the industry for sure.
Robust connectivity, infrastructure, and skilled manpower are must for success of such initiatives, people believe. What is your opinion?
I completely agree. Especially labour availability is a critical issue, as the cost of training workers is very high. The Government is addressing this challenge through initiatives like the SAMARTH scheme. This demand-driven, placement-oriented skilling programme by the Ministry of Textiles has been extended until 2026. Such programmes play an important role in bridging the skill gap and supporting the industry growth.
For textile parks to truly thrive, they need to be supported by strong infrastructure, connectivity, and access to trained manpower. These foundational elements are crucial for the success of any large-scale initiative.
On a parting note, what are your thoughts on the future of the garment industry?
India holds immense potential in the garment manufacturing sector. Our vision is to take locally produced garments to the global stage. In November last year we organised the second edition of ‘Brands of India’ in Dubai. Under the aegis of CMAI, Brands of India emerged as a premier Indian apparel brands trade show featuring men’s, women’s and kids’ wear while also offering a unique opportunity for retailers and stakeholders from GCC and African countries to explore and connect with esteemed Indian brands. The event empowered these brands to expand their global presence, showcasing the phenomenon of the Indian fashion industry to the world and garnered significant interest from leading wholesalers, retailers, distributors, e-commerce platforms and departmental chains.
We encourage entrepreneurs to upgrade their factories, enhance production capabilities, and participate in such kind of fairs to gain exposure and opportunities.
At CMAI, we aim to be a one-stop solution for the industry. We provide all necessary information on textile policies, upcoming parks, sourcing options, and access to financial assistance as well. Our support extends to logistics and software needs also. On the front-end, we organise fairs to offer greater business opportunities.
With all these resources under one roof, CMAI is committed to fostering growth and ensuring the Indian garment industry realises its full potential.
