Indian garment manufacturers have staged a two-day strike to protest against a proposed 10% levied excise duty on branded India-made ready-to-wear garments.

Justifying the tax in the national budget presented on 28 February, finance minister Pranab Mukherjee said the Indian garment industry "has come of age and has shown handsome growth in recent years" and so could cope with the duty.

The move is however drawing strong reaction. "We will take to the streets and no government will survive after taxing the basic necessity of 1.3bn Indians," said Tarun Jain, president of the Bahadur Ke Textiles & Knitwear Association, in the Punjab clothing manufacturing hub of Ludhiana.

He told just-style that in 2003 when the previous Bharatiya Janata Party (BJP) government imposed the same tax, the present-day ruling Congress Party (then in opposition) protested and forced a roll-back.

He claimed more than 20,000 manufacturers in Ludhiana joined 400,000 to 500,000 units across the country in striking on Monday and Tuesday.

Jain said the new tax would make this highly labour intensive industry uncompetitive against imports.

Within the next few days the industry leaders will meet Sonia Gandhi, chairperson of the ruling United Progressive Alliance coalition (dominated by her Congress Party). The budget has yet to be passed by the Indian parliament.

Though exporters are exempt, they too are anxious. Chandrima Chatterjee, director of compliance at the Apparel Export Promotion Council of India, told just-style that due to the interlinked nature of domestic sale and export garment production, the move would increase administrative costs and bureaucracy for exporters.

By Raghavendra Verma.