Gasp ... "Like simple-minded person in baggy trousers" (10)
I believe the answer is:
pantaloons
'baggy trousers' is the definition.
(I've seen this before)
'gasp like simple-minded person in' is the wordplay.
'gasp' becomes 'pant' (synonyms).
'like' becomes 'as'.
'simple-minded person' becomes 'loon' (I've seen this before).
'in' indicates putting letters inside.
'as' going around 'loon' is 'aloons'.
'pant'+'aloons'='PANTALOONS'
(Other definitions for pantaloons that I've seen before include "Women's baggy trousers" , "Baggy trousers gathered at the ankles" .)