GST Rate Rationalisation: How Tamil Nadu Will Benefit
GST
Dated:- 23-9-2025
Key Takeaways
\n * GST cuts to 5% or nil across textiles, handicrafts, coir, food and fisheries will lower consumer prices by 6-11%.
\n * Traditional sectors like Kanchipuram silk, Bhavani rugs, Swamimalai icons and Manapparai murukku to gain renewed competitiveness.
\n * Large industries in automobiles, renewable energy, electronics and defence to benefit from lower input costs.
\n * Around 10 lakh jobs in Tiruppur knitwear, 22 lakh in automobiles, and 10.5 lakh fisherfolk to see direct impact.
\nIntroduction
\nThe GST Council has recently reduced tax rates across a wide range of products. These changes will bring direct benefits to Tamil Nadu, a state that combines traditional handloom and handicrafts with strong industrial clusters and modern sectors such as automobiles, electronics, renewable energy, and defence.
\nWith lower GST rates, consu<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n reduced from 12% to 5% on low-value apparel, embroidery and accessories, costs are expected to fall by 6-11%. This helps MSMEs improve their margins, makes exports to the US and Europe more competitive, and ensures that India retains its edge in global knitwear markets. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n wakarma artisan families through small workshops and seasonal demand. With GST reduced from 12% to 5%, finished pieces will be about 6% cheaper, making accessories for Bharatanatyam, weddings, and diaspora markets more affordable. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of milk daily from about 5 lakh farmers. Lower GST on dairy products strengthens this cooperative network, anchors rural incomes, and ensures that consumers benefit from lower retail prices. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n to 5% on sprinklers and hand pumps, prices of equipment will fall by 6-8%. This will help small and marginal farmers adopt modern irrigation systems, improving farm productivity. = = = = = = = =<\/p>\n
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\nKanchipuram Silk: The sector supports thousands of family weavers and over 14,000 silk farmers, many of whom are already engaged in expanding sericulture in the State. Kanchipuram saris, which enjoy GI-tag status, are world-renowned for their durability and lustrous finish. The industry depends heavily on zari, sourced from Surat and the Tamil Nadu Zari Factory. A reduction in GST on zari from 12% to 5% will cut raw material costs by around 7%, bringing down the final price of a sari by 2-4%.
\nOther Handloom Products: Bhavani Jamakkalam rugs (Erode) and Madurai Sungudi sarees, both GI-tagged, will also become about 6% cheaper. These crafts<\/p>\n
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\nBrass, Stone and Wood Crafts: Artisans in Thanjavur, Kumbakonam and Mamallapuram produce brass idols, Tanjore paintings, wood statues and stone carvings. A 6-7% price drop will help in tourist sales, and e-commerce platforms, expanding their reach to both domestic and global buyers.
\nTraditional Dolls and Toys: Produced in Thanjavur, Salem and Kancheepuram, these handmade toys often peak in demand during festivals. With GST reduced to 5%, they gain better competitiveness against imported plastic toys, ensuring continued support for small artisan families.
\nCoir Industry
\nPollachi, Kangeyam and Cuddalore are major coir belts in Tamil Nadu. This sector, which is highly labour-intensive, is domina<\/p>\n
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\nManapparai Murukku: This GI-tagged snack from Tiruchirappalli, made by around 500 units employing 2,000-3,000 workers, will now be about 6% cheaper. This will help small processors compete with large branded snacks and also tap diaspora markets in the Gulf and elsewhere.
\nFisheries
\nTamil Nadu has a marine fisherfolk population of 10.48 lakh spread across 14 coastal districts. With strong domestic demand and exports worth Rs.6,957 crore in 2022-23, the sector is vital to the State's economy. With GST on processed fish and seafood reduced from 12% to 5%, products will be 6-7% cheaper. This supports small processors, many of whom employ women in cleaning and packaging, as well as exporters targeting the USA, Europe <\/p>\n
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\nAutomobiles: In 2023, Tamil Nadu accounted for 40% of India's EV production and employed 22 lakh people in its auto sector. With GST on vehicles and parts reduced from 28% to 18%, the effective tax load will be lower by about 8%. This will make automobiles more affordable for domestic buyers and improve cost competitiveness for manufacturers and exporters.
\nRenewable Energy: The State has a renewable energy capacity of 34,700 MW, more than half of its total energy mix. This includes 10,500 MW of wind and 7,360 MW of solar. With GST on renewable devices and parts cut from 12% to 5%, project costs will be reduced by 6-7%, improving economics for developers and supporting Tamil Nadu's green energy targets.
\nElectronics and Emerging Sectors
\nElectr<\/p>\n