GST reforms to help textiles sector reach $350 billion by 2030: Govt

India’s textile industry is on the brink of a major transformation with new GST reforms that could help the country become a $350 billion textile powerhouse by 2030. These changes are seen as a huge step forward for the entire sector, from fibers to fashion.

The Ministry of Textiles has assured it will work closely with industry players, exporters, artisans, and entrepreneurs to make these reforms successful. The goal is to cut costs, fix old problems, save jobs, and boost the Indian textile value chain at every stage.

These reforms are part of Prime Minister Narendra Modi’s ambitious “5F” vision — moving from Farm to Fibre, Factory, Fashion, and finally, Foreign markets. The aim is to position India as a major global player in textiles.

One of the key highlights is the rationalization of goods and services tax (GST). These changes will remove unfair distortions, lower manufacturing costs, increase demand, and support exports. As a result, India will become more competitive on the world stage.

The new GST rules also make a real difference for consumers and small businesses. For example, on readymade garments costing up to Rs 2,500 (previously Rs 1,000), the GST rate has been reduced to just 5%. This means more affordable clothing for middle- and low-income families and a boost in demand, especially in smaller towns and rural areas.

Since garment manufacturing is labor-intensive, increased demand is expected to create more jobs, particularly for women working in tailoring, stitching, and finishing units. The move will also help Indian brands compete better against cheaper imports in the affordable apparel segment.

GST rates on fibers and yarns have also been cut from 18% to 5% and from 12% to 5%, respectively. This change corrects earlier price imbalances, eases cash flow for manufacturers, and makes Indian synthetic textiles more competitive worldwide. It supports India’s goal of becoming a hub for man-made fibers and garments.

In the carpet and handicraft sector, GST has been lowered from 12% to 5%. This will benefit traditional craft industries like those in Bhadohi and Srinagar, helping boost exports and make these products more affordable for consumers. The same applies to 36 types of handicraft items, including cotton rugs and handwoven carpets, which will now have lower taxes, providing relief to artisans and supporting rural livelihoods.

The reforms also simplify the tax refund process, especially for small businesses and exports, by making things more straightforward with less paperwork and quicker refunds. Additionally, the removal of the Rs 1,000 threshold for small consignments sent via courier or postal services will make it easier for small traders and artisans to do business without extra hassle.

Overall, these GST reforms are expected to give India’s textile sector a strong push, creating more jobs, supporting local artisans, and helping Indian textiles shine on the global stage. It’s a big move towards making India a leading player in the global textile industry.