What Fashion Industry Expects from this Budget

What Fashion Industry Expects from this Budget
As fashion brands grappled with challenges ranging from supply chain disruptions to fluctuating raw material prices, leaders from Madame, KAZO, and FS Life share their insights and expectations for government support in the upcoming budget.

By Vaishnavi gupta , Sr Correspondent

15 Jan 2024 | 8 min read

In the ever-evolving landscape of the Indian fashion and apparel industry, the past year has been a testament to resilience and adaptability. As fashion brands grappled with challenges ranging from supply chain disruptions to fluctuating raw material prices, leaders from Madame, KAZO, and FS Life share their insights and expectations for government support in the upcoming budget. These perspectives not only shed light on the industry's challenges but also underscore the potential for strategic policies to fuel growth and enhance resilience.

Demands from Akhil Jain, Executive Director, Madame

Akhil Jain emphasizes the urgent need for a National Retail Trade Policy. This policy, under discussion for over a year, seeks to streamline compliance processes for brick-and-mortar retail traders, fostering operational efficiencies within the fashion industry. Jain believes that the introduction of such a policy is pivotal for promoting ease of doing business, a critical aspect for the fashion sector.

Madame also draws attention to the complexities arising from the GST inverted duty structure, where higher tax rates on purchases and lower rates on sales result in working capital blockage. Jain advocates for simplifying the process of claiming refunds under the GST law, highlighting the industry's struggle with the cumbersome and time-consuming nature of the current procedure.

Additionally, the call for the reintroduction of the Technology Upgradation Fund Scheme (TUFS) reflects Madame's commitment to encouraging innovation and technological advancement within the fashion industry.

Insights from Deepak Aggarwal, Founder & CEO of KAZO

Deepak Aggarwal shares valuable insights into the brand's journey of navigating challenges in the past year. Despite disruptions in the supply chain, fluctuating raw material prices, and shifts in consumer behavior, KAZO has maintained resilience through a steadfast focus on innovation and customer-centric strategies. Aggarwal emphasizes the significance of government support for the industry's continued resilience. KAZO's recommendations include the implementation of stimulus packages geared towards supply chain optimization, research and development (R&D), and sustainability. The brand advocates for policies that encourage regional production, diverse sourcing, and the integration of logistics technologies to mitigate potential future disruptions.

To bolster consumer spending in the fashion sector, he suggests fiscal policies such as tax breaks for retail purchases. The brand also highlights the enduring importance of e-commerce, recommending policies like tax incentives and improved digital infrastructure to enhance both online and offline channels.

FS Life's Perspective on Economic Impact and Expectations

FS Life, a brand that expanded both offline and online amid economic uncertainties, provides insights into its journey over the past year. The brand opened its first store in Mumbai in September 2023 and expanded to include two more stores in Mumbai, one in Pune, and one in Delhi by December. While celebrating these achievements, FS Life acknowledges a slowdown in consumer spending, impacting the brand's ability to grow at an even faster pace.

In light of the current economic conditions, FS Life expresses expectations regarding government support. The brand looks towards increased government spending, viewing it as a catalyst for business growth and sustainability. The leaders at FS Life advocate for policies that put more money in the hands of consumers, ultimately supporting business growth over the long term. Simpler tax structures are also recommended to facilitate ease of doing business within the fashion and apparel industry.

Raw material costs are a critical factor directly impacting the gross margins of fashion retailers. Leaders at FS Life recognize the importance of supporting the local textile industry while also acknowledging the need to make it more competitive globally. Striking a balance between supporting local industries and ensuring competitiveness in terms of both quality and pricing is crucial for the sustainable growth of the fashion and apparel sector.

The global supply chain disruptions witnessed over the past year have prompted a strategic shift in the industry's reliance on imported raw materials. The leaders emphasize the ongoing journey towards self-reliance, a trend that aligns with broader national objectives. While celebrating the progress made, there is a call to focus on making the domestic industry more competitive and ensuring a conducive business environment.

The upcoming budget is anticipated to be a critical juncture for the fashion and apparel sector, where strategic policy decisions can catalyze sustainable growth. Madame's call for a National Retail Trade Policy, KAZO's emphasis on stimulus packages, and FS Life's advocacy for increased government spending collectively underscore the industry's call for comprehensive support.

The interplay of demands, insights, and recommendations from these leading fashion brands paints a vivid picture of an industry navigating complexities with optimism. As the Indian government prepares to announce its budget, all eyes are on the policies and initiatives that will shape the future of the fashion and apparel sector in the country. The collaboration between the government and industry players holds the key to unlocking the full potential of this vibrant and resilient sector.

In the ever-evolving landscape of the Indian fashion and apparel industry, the past year has been a testament to resilience and adaptability. As fashion brands grappled with challenges ranging from supply chain disruptions to fluctuating raw material prices, leaders from Madame, KAZO, and FS Life share their insights and expectations for government support in the upcoming budget. These perspectives not only shed light on the industry's challenges but also underscore the potential for strategic policies to fuel growth and enhance resilience.

Demands from Akhil Jain, Executive Director, MadameAkhil Jain emphasizes the urgent need for a National Retail Trade Policy. This policy, under discussion for over a year, seeks to streamline compliance processes for brick-and-mortar retail traders, fostering operational efficiencies within the fashion industry. Jain believes that the introduction of such a policy is pivotal for promoting ease of doing business, a critical aspect for the fashion sector.

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