Staff Reporter
GUWAHATI: The GST reforms are expected to ripple through various sectors of Assam’s economy, like tea gardens, exquisite silks, vibrant handicrafts, and rich biodiversity, which are set to witness significant economic gains, with ease in input costs, improved price competitiveness, and a rise in demand.
Assam’s tea gardens not only produce India’s famous brew but also provide employment to many local Assamese communities. The industry employs roughly 6.84 lakh workers, with many families living in estate quarters that provide basic healthcare, rations, and schools.
With tea, now taxed at 5% GST, shelf prices are estimated to fall by about 11%. This reduction in prices is especially encouraging for exports. India shipped 255 million kg of tea in 2024, reaching a 10-year high. Lower costs are expected to sharpen Assam’s global competitiveness.
On the domestic side, a major share of Assam’s tea passes through the Guwahati Tea Auction Centre (GTAC), which handles a large fraction of tea bound for Indian markets. Cheaper prices for buyers will result in higher volumes sold, potentially lifting estate revenues and wages of the workers who power this industry.
For small growers in upper Assam who produce orthodox teas, the shift to a 5% GST rate is significant. This reduction is expected to bring about 11% cost relief on tea and instant-tea packs, directly easing their cost burden. In addition, lower prices for agricultural inputs, particularly fertilisers, will decrease the overall cost of production. Taken together, the rate change and input savings reduce expenses for these growers.
The GST reforms will not only bring price relief to a country that primarily consumes tea but also support the tea workers in the state.
Assam’s iconic silk industry contributes 95% of the country’s total muga silk production, creating sarees, neckties, umbrellas, shoes and lampshades. The new 5% GST rate will effectively reduce prices by about 6.25% on eligible handloom/handicraft items. This will bring relief to weavers, who can now sell in competitive markets and earn better margins. It will also boost exports, as niche luxury buyers may be more inclined to purchase when prices are marginally lower.
The GST on gamosa has been reduced from 12% to 5%, yielding approximately 6.25% savings. For weavers, lower prices make their products more affordable to customers, which will result in increased demand.
The entire handloom sector in Assam stands to gain from the GST reforms. In a state with more than 12.83 lakh weavers and about 12.46 lakh looms, the impact is far-reaching. Major markets include domestic sales of mekhela-sador, stoles, etc. through local markets, fairs, and online craft portals.
The new 5% GST rate on handlooms and crafts will benefit Assam Jaapi, Asharikandi terracotta, Mishing handloom, Pani Meteka, and Bihu dhol, among others, across Goalpara, Dhubri, the Majuli, Mishing belts, and Nalbari, Barpeta, Kamrup, etc.
Tourism in Assam is woven from the Kaziranga-Brahmaputra circuits, with Majuli and Pobitora as major draws and Guwahati serving as an important city stay. By 2015–16, tourism accounted for about 6.51 lakh jobs in the state, and this number has only grown since, as Assam attracts more visitors from across India and the world. The state accounted for Rs 221.95 crore in revenue from tourist lodges alone, including visitors from Europe, Asia, the Middle East, and domestic markets.
GST reforms have given this sector a timely boost. The tax on hotel rooms with rates up to Rs 7,500 per night has been reduced to 5%, making many mid-range accommodations more affordable and encouraging higher footfall.
Hospitality essentials such as toiletries, tableware, and packaged water are now at a reduced rate of 5%, and many food items are also taxed at 5%. For tourists, this makes travel tangibly cheaper, and for businesses, it lowers operating costs.
The GI-tagged Joha Rice of Assam benefits from the new 5% GST rate, supporting value-added products like mixes and ready-to-cook items. Cultivated across Goalpara, Nalbari, Barpeta, Kamrup, Darrang, Udalguri and other Joha belts, it is grown on relatively marginal lands with lower productivity than other rice types. Markets include ready-mixes, noodles, and baked goods made with rice flour, many of which now attract 5% GST. Key buyers and export destinations include Europe (since 2007), Vietnam, and the Middle East.
The new rates are expected to bring about a 6–11% cost reduction, depending on the prior slab. This will make products more affordable for consumers, and the resulting rise in demand will bring higher incomes for farmers.
The GI-tagged Boka Saul/Chokuwa Saul (Magic Rice) now benefits from a GST cut from 12%/18% to 5% on ready-to-cook/instant mixes.
With the new GST rate of 5% on juices, pickles, and sauces, these items are expected to bring savings of about 6.25-11% for consumers. This will increase the demand for Kaji nemu, and as farmers sell higher volumes, this will bring better earnings.
GI-tagged Tezpur Litchi, cultivated in Sonitpur (Tezpur and surrounding areas), benefits from a GST reduction on pulp, jam, and jelly from 12% to 5%.
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