The central government has outlined several advantages for Tamil Nadu following the recent Goods and Services Tax (GST) reductions. These changes are expected to positively impact various sectors, including textiles, handicrafts, dairy, and coir industries.
Textile Industry
Tamil Nadu’s textile sector, particularly in regions like Tiruppur, Erode, Karur, Salem, and Kanchipuram, stands to benefit significantly. The reduction in GST from 12% to 5% on low-value garments, embroidery, and accessories is anticipated to decrease production costs by 6–11%, enhancing competitiveness and export potential.
Handicrafts and Coir Products
Traditional handicrafts, including Kanchipuram silk, Bhavani rugs, and Swamimalai icons, will experience a price reduction of 6–11% due to the GST cut. Similarly, coir products like mats, ropes, and geo-textiles will become 6–7% cheaper, improving export competitiveness.
Dairy Products
The GST reduction on dairy products such as milk, paneer, and ghee from 12% to 5% is expected to lower prices by 4–11%. This change benefits consumers and supports dairy farmers, with Aavin procuring approximately 37 lakh liters of milk daily from 5 lakh farmers.
Fisheries and Food Processing
The GST reduction on fish and food processing items to 5% or nil will lower consumer prices by 6–11%. This change benefits consumers and supports youth involved in the food processing value chain, from farmers and cooperatives to MSMEs, retailers, and exporters.
Impact on Employment
The GST reductions are expected to positively affect employment in various sectors:
Textiles: Approximately 10 lakh jobs in Tiruppur knitwear.
Automobiles: Around 22 lakh jobs in the automobile industry.
Fisheries: About 10.5 lakh fisherfolk.
These changes are anticipated to enhance job security and income levels in these sectors.