Faced with mass protests and mounting criticism, India’s finance minister Pranab Mukherjee yesterday (22 March) took the decision to dilute a proposed 10% excise duty on branded India-made ready-to-wear garments.

The partial concession means the 10% duty will now be paid on 45% of the retail sale price, and not at the higher level of 60% as originally planned.

The tax plans were first mooted in India’s national budget for 2011-12, details of which were revealed last month.

But the measure prompted a two-day strike by Indian garment manufacturers who feared the new tax would make them uncompetitive against imports. Exporters also expressed their anxiety that the move would increase administrative costs and bureaucracy.