How Will GST Rate Cuts Impact India’s Blue Economy?

New Delhi, Sep 4 (NationPress) The fisheries sector in India is set to experience a substantial enhancement due to the recent GST reforms, which involve a notable reduction in tax rates. This initiative aims to lower operational costs, boost competitiveness in both domestic and international markets, and directly benefit millions of fish farmers and other stakeholders reliant on fishing and aquaculture for their livelihoods, as stated by an official announcement on Thursday.

With the updated GST framework, the tax on fish oils, fish extracts, and prepared or preserved fish and shrimp products has been scaled down from 12 percent to 5 percent. This reduction will make value-added seafood more accessible for local consumers and improve the competitive edge of India’s seafood exports, according to the Ministry of Fisheries, Animal Husbandry, and Dairying.

Furthermore, aquaculture essentials such as diesel engines, pumps, aerators, and sprinklers will now incur only 5 percent GST, down from the previous rates of 12 to 18 percent. This change will significantly alleviate operational expenses for fish farmers. Additionally, crucial chemicals like ammonia and micronutrients used for pond preparation and water quality management will also be taxed at 5 percent, a reduction from the earlier 12 to 18 percent, thereby decreasing costs associated with feed, pond conditioning, and farm-level practices.

The decreased GST on preserved fish, shrimp, and molluscs is anticipated to enhance India’s seafood exports globally while also encouraging greater domestic consumption of safe and hygienically processed seafood. Additionally, the GST on fishing rods, tackle, landing nets, butterfly nets, and other gear has been cut from 12 percent to 5 percent, which will benefit recreational and sport fishing as well as small-scale aquaculture and capture fisheries. This will render essential gear more affordable, resulting in lower input costs and supporting livelihoods in the sector.

The reform also provides relief to processing units, as GST on job work services in food and agro-processing, including seafood, has been reduced from 12 percent to 5 percent. Composting machines, essential for producing organic manure and ensuring eco-friendly pond management, will now be taxed at 5 percent, fostering sustainable aquaculture practices, according to the ministry.

India’s fisheries and aquaculture sector has emerged as one of the world’s fastest-growing industries, significantly contributing to food and nutritional security, farmer incomes, rural livelihoods, and exports. Currently, the sector supports the livelihoods of over 30 million people and has established India as the second-largest fish producer globally, with a production of nearly 19.5 million tonnes (2024-25).

Moreover, India is recognized as the world’s largest shrimp exporter, with seafood exports surpassing Rs. 60,000 crores in 2023-24, thereby generating valuable foreign exchange and bolstering the nation’s Blue Economy.