New Delhi/Guwahati, Sep 29 (NationPress) The recent GST rate reductions are anticipated to significantly enhance economic growth in Assam, spanning the state’s lush tea plantations, exquisite handloom silks, vibrant handicrafts, and tourism industries as input costs decline, price competitiveness improves, and demand increases, according to an official announcement made on Monday.

Tea estates and small farmers are likely to gain from decreased value-chain expenses, while handloom and craft cooperatives can offer more affordable prices without squeezing artisans’ margins. Additionally, the tourism and hospitality sectors will become more accessible to visitors. Collectively, these changes will lead to more consistent orders for entrepreneurs and stable earnings for workers, artisans, and farmers, as per the statement.

Assam’s tea gardens employ approximately 684,000 workers, with many families residing in estate quarters that provide essential healthcare, rations, and schools.

With tea now taxed at 5 percent GST, shelf prices are predicted to drop by around 11 percent. This price reduction is particularly promising for exports. India exported 255 million kg of tea in 2024, marking a 10-year high. Lower costs are expected to enhance Assam’s global competitiveness, the statement noted.

On the domestic front, a significant portion of Assam’s tea is auctioned through the Guwahati Tea Auction Centre, which processes a large share of tea destined for Indian markets. Lower prices for buyers will lead to increased sales volumes, potentially boosting estate revenues and the wages of the workers who drive this industry.

The muga silk sector in Assam, primarily based in Sualkuchi (Kamrup), Lakhimpur, Dhemaji, and Jorhat, along with other sericulture clusters across the state, is a tradition upheld by women weavers. The reduced GST rate of 5 percent on handloom and handicraft products will alleviate pressure on weavers, enabling them to compete in the market and secure better margins. It will also stimulate exports, as niche luxury consumers may be more willing to buy when prices are slightly lower.

The entire handloom industry in Assam stands to benefit from the GST reforms. In a state with over 1.283 million weavers and about 1.246 million looms, the ramifications are extensive.

The GST reduction on handlooms and crafts will also assist items like Assam Jaapi, Asharikandi terracotta, Mishing handloom, Pani Meteka, and Bihu dhol found in Goalpara/Dhubri, the Majuli/Mishing belts, and Nalbari/Barpeta/Kamrup.

By easing the tax burden, these reforms will foster stronger markets for traditional handlooms and crafts, potentially increasing incomes and ensuring that handmade Assamese textiles remain competitive against factory-produced fabrics.

Tourism has become more affordable with hotels priced up to Rs 7,500 now taxed at 5 percent GST, benefiting a sector that employs over 651,000 people in Assam. The state generated Rs 221.95 crore in revenue from tourist lodgings alone, attracting visitors from Europe, Asia, the Middle East, and domestic markets. Essentials for hospitality, such as toiletries, tableware, and packaged water, are also taxed at a reduced rate of 5 percent, lowering costs for tourists and further boosting the sector.

The GST rate reduction also benefits Assam’s geographical indication (GI) farm basket, including Joha Rice, Boka Saul rice, Kaji Nemu products, and Tezpur Litchi, which are expected to see rising demand and elevated farm incomes. The GST reforms have positively impacted these traditional livelihoods by reducing taxes on value-added products made from local crops, encouraging farmers to diversify and penetrate new markets.

With the GST rate cut to 5 percent on juices, pickles, jams, and sauces, the demand for Assam’s Kaji nemu (lemons) and GI-tagged Tezpur Litchi is anticipated to surge, leading to increased incomes for local farmers, the statement concluded.