Wholesalers say the sharp rise in online shopping is hurting retailers, which in turn is impacting their own business.
It was the final major haat before Diwali. The roads were crowded with trucks, cars, and porters rushing about.
Porters hurried through the lanes, hauling towering bundles on their backs and shoulders, loading stacks of readymade garments onto the many trucks lined up along the busy Akra Road. The street is flanked by ageing multi-storey buildings, each packed with hundreds of stalls and gaddis belonging to garment wholesalers.
Scores of trucks piled high with cartons containing men’s, women’s, and children’s apparel were racing against the clock to reach the Khidderpore docks or Howrah station.
Yet, even this lively late-autumn bustle failed to lift the mood in Metiabruz—Kolkata’s vast garment wholesale hub and one of Asia’s largest distribution centres—whose products travel to markets across India.
“Has anyone here said they gained from the GST rate cut on garments priced up to ₹2,500?” asks Ajit Gupta of H.L. Creation. Gupta, a second-generation wholesaler, supplies bulk T-shirts to retailers nationwide.
“We haven’t benefitted at all from the GST restructuring. In fact, this festive season our sales are down by nearly 30 per cent compared to last year,” he says with concern.
Wholesalers point out that an explosive rise in online shopping is eating into retailers’ business, which is directly impacting them. Additionally, several large manufacturers are now bypassing distributors altogether by selling directly to retailers, further squeezing wholesale margins. To make matters worse, floods, landslides, and other natural disasters in multiple states have weakened festive-season demand.
The Central government’s GST rationalisation took effect on September 22—Navratri’s first day—following GST Council recommendations. The duty on readymade garments costing up to ₹2,500 has been reduced to 5 per cent. Previously, apparel up to ₹1,000 attracted 5 per cent GST, while items priced above this slab were taxed at 12 per cent. Under the revised structure, garments priced above ₹2,500 now draw an 18 per cent tax, up from 12 per cent.
Speaking at an event in Kolkata shortly before the rollout, Finance Minister Nirmala Sitharaman had noted that the timing aligned with Bengal’s Durga Puja season.
Wholesalers in Metiabruz, who had dispatched stocks for Durga Puja and Diwali by late September, are now shipping goods for Chhath Puja.
“The garment trade is unsettled. We don’t see any visible benefit from the GST cut. Overall sales are lower than last year. Even for Chhath Puja, demand is subdued. Floods in several Bihar districts have dampened buying,” says a third-generation distributor who supplies women’s garments to retailers in states such as Karnataka, Bihar, and Assam.
Exporters, too, are having a difficult time, with steep US tariffs weighing heavily on shipments of Indian apparel.
Discounts to stay afloat
Maasis Interfashion, a major garment producer and exporter with a manufacturing unit in Metiabruz, has begun offering discounts to its long-standing US clients, sacrificing margins to retain business.
“We are giving price cuts to our American buyers. These items can’t be diverted to other markets because they are made to specific sizes and designs. The US accounts for around 7–8 per cent of our exports. With the discounts, our margins will definitely take a hit,” says Pravash Agarwal, director at Maasis Interfashion.
The firm primarily exports women’s apparel, with Japan remaining its biggest international market where demand remains stable.
“For next year’s orders from the US, we plan to increase prices,” Agarwal adds.
