Could GST 2.0 Propel Growth in Textiles and Logistics?

New Delhi, Sep 18 (NationPress) The overhaul of the Goods and Services Tax under GST 2.0 signifies a major transformation aimed at eliminating structural discrepancies, lowering costs, and enhancing demand in the textile and logistics sectors. These industries are crucial for domestic expansion, job creation, and export competitiveness, as highlighted in an official announcement on Thursday.

By standardizing tax rates throughout the value chain, the GST reform promotes affordability for consumers, preserves jobs in labor-intensive industries, and boosts India’s global competitiveness. In the textile domain, this rationalization fortifies the complete value chain—from fiber to garment—by reducing imbalances, making garments more affordable, rekindling retail demand, and bolstering export capabilities, according to the statement.

The reduction in GST is set to make clothing more accessible for middle- and low-income families, thereby stimulating domestic demand with a significant influence on small towns and rural areas.

The GST on ready-to-wear garments priced up to Rs 2,500 per piece is now at 5 percent, enhancing affordability and stimulating local demand.

Furthermore, the GST on synthetic fibers and yarn has been decreased from 12 percent and 18 percent to 5 percent, eliminating the inverted duty structure and empowering Small and Medium Enterprises, while the reduction on carpets and other textile floor coverings from 12 percent to 5 percent will improve global competitiveness, as per the statement.

In addition, the GST cut on commercial goods vehicles from 28 percent to 18 percent will lower logistics costs and aid exports.

These GST reforms also extend to the transportation sector, which is essential for minimizing logistics expenses and fostering industrial growth. Trucks and delivery vans, which account for nearly 65–70 percent of India’s goods traffic, stand to gain considerably from tax rationalization. The reduction in freight costs—lowering expenses per tonne-km—benefits the transportation of textiles, FMCG, and e-commerce deliveries.

The ripple effect of reduced logistics costs contributes to alleviating overall price pressures and curbing inflation. Additionally, lower logistics expenses enhance the competitiveness of Indian textiles in international markets.

The GST rationalization across textiles and logistics sectors represents a pivotal move to bolster India’s manufacturing foundation, improve affordability, and escalate exports. By addressing structural discrepancies and alleviating cost pressures, these reforms provide direct advantages to consumers, small enterprises, and exporters alike. They embody the vision of a globally competitive India powered by resilient supply chains and a flourishing textile sector, the statement concluded.