Garment and Footwear Stocks Rally on Hopes of GST Relief

Shares of textile and footwear companies surged in early trading on Friday as investors bet on the possibility of lower Goods and Services Tax (GST) rates, which could provide a boost to consumer demand.

Reports indicate that the GST Council’s Group of Ministers on rate rationalisation is preparing to recommend changes that may benefit both sectors. The key proposal under discussion is to cut GST on several textile inputs – including glimped yarn, metallised yarn and rubber thread – to 5% from the current 12%.

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The panel is also expected to suggest raising the price threshold for readymade garments eligible for the 5% GST rate to ₹2,500 from the present ₹1,000. Under this framework, garments priced above ₹2,500 would move into the 18% GST bracket, compared with 12% at present.

A similar change is being considered for footwear. According to market reports, footwear items priced above ₹2,500 may soon attract 18% GST, up from the existing 12%. However, lower-priced products would continue to enjoy a concessional rate of 5%. The proposals will be tabled before the GST Council in its meeting scheduled next week.

Market Reaction

The expectations of tax relief triggered strong buying interest in the sector. Trent Ltd share price gained over 1% to ₹5,292.00. Siyaram Silk Mills rose over 1%, hitting an intraday high of ₹630 & closing at ₹614.90 as investors factored in the likelihood of improved sales if lower GST rates are approved. Avenue Supermarts and Indiamart Intermesh also witnessed modest gains of up to 1% intraday.

Footwear counters rallied more sharply. Relaxo Footwears jumped 7%, while Khadim India advanced more than 10% during the session & closed at 238.45. Analysts said the anticipation of stronger retail demand in the coming quarters drove the buying spree.

Broader Context

The rally in textile and footwear stocks comes against the backdrop of recent weakness in the sector. Companies have been under pressure after the United States imposed steep 50% tariffs on Indian exports earlier this month, hurting investor sentiment. Market participants believe that a lower GST rate at home could partly offset the pain by boosting domestic consumption.

Conclusion

With the GST Council set to review the proposals next week, investors are closely watching the outcome. If the recommendations are accepted, the dual effect of lower tax on affordable garments and footwear, alongside higher rates for premium products, could reshape demand patterns across the industry.