{"id":8890,"date":"2025-10-09T14:34:40","date_gmt":"2025-10-09T09:04:40","guid":{"rendered":"https:\/\/theeducationoverview.in\/?p=8890"},"modified":"2025-10-09T14:34:40","modified_gmt":"2025-10-09T09:04:40","slug":"from-spices-to-seafood-gst-reforms-to-boost-keralas-economy","status":"publish","type":"post","link":"https:\/\/theeducationoverview.in\/?p=8890","title":{"rendered":"From Spices to Seafood: GST Reforms to Boost Kerala\u2019s Economy"},"content":{"rendered":"
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From Spices to Seafood: GST Reforms to Boost Kerala\u2019s Economy<\/strong><\/span><\/h2>\n

Posted On: 08 OCT 2025 10:28AM by PIB Delhi<\/strong><\/h2>\n<\/div>\n
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Key Takeaways<\/strong><\/span><\/p>\n

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  • 5% GST on cashew & coir products to benefit over 6.7 lakh workers across Kerala<\/strong><\/span><\/li>\n
  • Food processing, employing 29.5% of Kerala\u2019s workforce, gains from reduced rates on pineapple, mango, and banana-based products<\/strong><\/span><\/li>\n
  • 1.049 million fisherfolk\u00a0and\u00a04.18 lakh tea workers\u00a0set to gain with 5% GST on processed seafood & tea<\/strong><\/span><\/li>\n
  • GST cuts reduce costs by\u00a0~6-11%\u00a0across spices, coffee, processed fruits & dry fruits<\/strong><\/span><\/li>\n
  • Tourism\u00a0and Ayurveda set to expand under 5% GST, making Kerala more affordable for global visitors<\/strong><\/span><\/li>\n<\/ul>\n<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

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    Introduction<\/strong><\/span><\/p>\n

    Kerala, often celebrated as \u201cGod\u2019s Own Country\u201d, is deeply rooted in agriculture, marine resources, plantation crops, and artisanal production, with each sector supporting numerous livelihoods. The recent GST reforms, which bring significant rate reductions across key industries, are expected to make products and services more affordable, enhancing export competitiveness, and strengthening income opportunities across value chains.<\/strong><\/span><\/p>\n

    From the spice gardens of Idukki and Wayanad to the coir factories of Alappuzha, fisheries clusters of Kochi & Kannur to the cashew corridor of Kollam, all of Kerala is set to gain. Beyond goods, the reforms extend to services, with tourism, Ayurveda, and wellness industries witnessing tax relief that enhances affordability and global appeal.<\/strong><\/span><\/p>\n

    Together, these reforms ensure that the benefits of growth reach both producers and consumers, revitalizing Kerala\u2019s traditional strengths while paving the way for inclusive economic growth.<\/strong><\/span><\/p>\n

    \"WhatsApp<\/strong><\/span><\/p>\n

    Agriculture & Agro-processing<\/strong><\/span><\/p>\n

    Cashew processing -roasted\/ salted\/ coated nuts<\/em><\/strong><\/span><\/p>\n

    Kerala\u2019s cashew processing industry is centered around Kollam cashew corridor employing around 3 lakh workers, engaged in shelling, peeling, and grading across micro-units and cooperatives. The\u00a0reduction of GST on cashew processing from 12%\/ 18% to 5% brings ~6-11% cost reduction, based on earlier slab.<\/strong><\/span><\/p>\n

    The sector caters to domestic snacking and gifting markets, with products now\u00a0more affordable\u00a0under the revised GST rates. Private-label contracts continue to drive exports to GCC, US, and EU retail markets. The rate cut strengthens Kerala\u2019s cashew processors by\u00a0improving margins and competitiveness.<\/strong><\/span><\/p>\n

    Wayanad Robusta Coffee<\/em><\/strong><\/span><\/p>\n

    With the\u00a0GST rate on instant coffee and preparations reduced from 18% to 5%,\u00a0Kerala\u2019s\u00a0Wayanad coffee belt\u00a0is poised to become stronger and more competitive. Coffee production in Kerala is dominated by small and marginal farmers who manage mixed cropping farms. The sector\u00a0employs roughly 50,000 workers\u00a0involved in harvesting and pulping, as well as small-scale entrepreneurs and roasters producing instant coffee mixes\/ coffee-based preparations.<\/strong><\/span><\/p>\n

    The new GST rates are expected to bring\u00a0~11% cost reduction. In 2023-24, Kerala produced 70,354 metric tons of coffee, with Wayanad being the largest producing district. Kerala is also a major contributor to India\u2019s overall coffee exports.\u00a0The GST reduction will make Kerala\u2019s GI-tagged Robusta coffee more competitive in both domestic and export markets.<\/strong><\/span><\/p>\n

    Malabar Pepper<\/em><\/strong><\/span><\/p>\n

    The\u00a0reduction of GST on Malabar Pepper from 18% to 5% is expected to bring\u00a0~11% cost reduction, offering substantial relief to Kerala\u2019s spice economy. Cultivated mainly by small and marginal hill farmers\u00a0across Wayanad, Kozhikode, and Kannur, pepper farming supports seasonal labourers and women engaged in cleaning, drying, and packing of the spice.<\/strong><\/span><\/p>\n

    As one of Kerala\u2019s most valuable GI-tagged products, Malabar Pepper is a key component in masala blends and spice extracts. In 2022-23, India\u2019s total pepper exports were valued at USD 87 million, with a major share originating from Kerala and supplied to EU and US oleoresin buyers. The GST reforms are expected to make Kerala\u2019s pepper\u00a0more price-competitive in global markets\u00a0and strengthen the position of smallholder farmers within the spice value chain.<\/strong><\/span><\/p>\n

    Alleppey Green Cardamom<\/em><\/strong><\/span><\/p>\n

    <\/strong><\/span><\/p>\n

    Cultivated mainly by small growers in the Idukki plantations, Kerala\u2019s GI-tagged green cardamom sustains a network of smallholder clusters, drying and curing operators, and a workforce engaged in grading, packing, and processing of cardamom oleoresin\/ essential oil and masala mixes. The Alleppey Green is a well-known origin\/ brand of green cardamom in the state.<\/strong><\/span><\/p>\n

    The reduction of GST on extracts\/ masala mixes from 18% to 5% is expected to result in an 11%\u00a0cost reduction, providing a strong boost to Kerala\u2019s spice economy. In 2023, India\u2019s total cardamom exports were valued at USD 102.43 million, with a major portion originating from Kerala. With reduced GST, exporters can offer\u00a0more competitive pricing, whereas smallholders, labourers, and processors can benefit from\u00a0better income security.<\/strong><\/span><\/p>\n

    Vazhakulam Pineapple<\/em><\/strong><\/span><\/p>\n

    The reduction of GST on processed pineapple products from 12% to 5% is set to deliver a significant boost to Kerala\u2019s GI-tagged Vazhakulam pineapple cluster,\u00a0especially in the Ernakulam and Thrissur regions. The industry comprises of smallholder farmers in these clusters, supported by day labourers involved in harvesting and packaging, as well as other staff employed in small processing units and FPO\/ cooperative factories. The\u00a0food processing sector accounts for 29.5% of Kerala\u2019s total employment, reflecting its socio-economic importance.<\/strong><\/span><\/p>\n

    The Vazhakulam pineapple market currently dispatches 1,500 tonnes of fruit daily, catering to a domestic share of nearly 98%, while exports of fresh and dried pineapples from Kerala account for 44% of India\u2019s total trade in this segment.<\/strong><\/span><\/p>\n

    With the new GST rate of 5%, costs are expected to fall by around 6.25%.\u00a0This reduction will make pineapple-based products such as pulp, jam, and canned fruit\u00a0more affordable in domestic markets and more competitive internationally.<\/strong><\/span><\/p>\n

    TirurVettila (Betel Leaf)<\/em><\/strong><\/span><\/p>\n

    The Tirur Vettila (Betel Leaf) from Malappuram\u2019s Tirur\u00a0is set to receive a strong push under the new GST structure, with\u00a0rates on value-added mouth fresheners and pastes reduced from 18% to 5%. The crop is primarily cultivated by smallholder vine growers working on family farms, supported by daily-wage harvesters and seasonal packers.<\/strong><\/span><\/p>\n

    The demand comes mainly from northern Indian states, where betel products remain popular, while e-commerce platforms continue to widen market reach.\u00a0The new rates reduce cost by ~11% for value-added products such as mouth fresheners and pastes.<\/strong><\/span><\/p>\n

    \u00a0Kuttiattoor Mango<\/em><\/strong><\/span><\/p>\n

    Kuttiattoor Mango is a GI-tagged produce\u00a0cultivated by small orchard owners with 1-3 acres of land and supported by daily labourers during harvest. Processing is carried out by micro-processors for jams and pickles.<\/strong><\/span><\/p>\n

    The reduction of GST on jams\/ pulp\/ pickles from 12% to 5% is expected to bring about a 6.25% cost reduction, directly benefiting Kannur FPOs & processors.\u00a0The global processed mango product market was valued at USD 18.81 billion in 2024, indicating the scale of potential demand. Buyers include gourmet and pickle brands, as well as NRK online consumers. The GST cut will help\u00a0improve margins for the industry\u00a0and make Kuttiattoor Mango products\u00a0more competitive in both domestic and export markets.<\/strong><\/span><\/p>\n

    <\/strong><\/span><\/p>\n

    Fisheries & seafood processing<\/strong><\/span><\/p>\n

    Spread across Kochi, Kollam, Kozhikode, and Kannur, the fisheries sector supports traditional fisherfolk communities.\u00a0While men are primarily engaged in capture fishing, women play a vital role in post-harvest activities such as drying, peeling, sorting, and packaging.\u00a0Kerala\u2019s fisherfolk population is estimated at 1.049 million, highlighting the scale of livelihood dependence on this sector.<\/strong><\/span><\/p>\n

    The reduction of GST on fisheries and seafood processing to 5% is expected to bring about a 6-11% cost reduction, benefiting Kerala\u2019s coastal economy. In 2022-23, the state produced 6.87 lakh tonnes of marine fish, contributing approximately 1.80% to Kerala\u2019s GSDP. The same year, Kerala exported 218,629 tonnes of marine products worth \u20b98,285.03 crore. The GST reduction will help enhance export competitiveness and improve income stability in this sector.<\/strong><\/span><\/p>\n

    MSME & Cottage Industries<\/strong><\/span><\/p>\n

    Packed Spice mixes<\/em><\/strong><\/span><\/p>\n

    Kerala\u2019s packed spice mix industry, spread across Kochi, Idukki, Wayanad, and Kozhikode, primarily sustains smallholder farmers, with many women workers engaged in drying, cleaning, and sorting of spices. Supported by strong infrastructure such as the Spices Park in Puttady, Kerala remains a pivotal contributor to India\u2019s growing spice economy.<\/strong><\/span><\/p>\n

    The recent\u00a0GST reduction on packed spice mixes from 18% to 5%\u00a0is estimated to reduce prices by ~11%. This will enhance Kerala\u2019s\u00a0global competitiveness\u00a0while making its spice products\u00a0more affordable\u00a0for consumers.<\/strong><\/span><\/p>\n

    Tea value chain<\/em><\/strong><\/span><\/p>\n

    The\u00a0reduction of GST on tea products from 18% to 5%\u00a0is set to benefit Kerala\u2019s Idukki-Munnar tea estates and Kochi-based packers and auctioneers. The sector\u00a0employs around 4.18 lakh workers, including plantation labourers engaged in plucking and field maintenance, smallholder growers, factory workers, and brokers.<\/strong><\/span><\/p>\n

    The total value of plantation crops produced in\u00a0the state contributes about 23.27% of India\u2019s total export value in this sector.\u00a0The GST cut reduces the cost of packet\/ instant\/ RTD tea by ~11%.\u00a0This will strengthen Kerala\u2019s position within India\u2019s tea industry and ensure\u00a0sustained livelihood opportunities\u00a0across its tea-growing regions.<\/strong><\/span><\/p>\n

    Chengalikodan (Changalikodan) Nendran Banana<\/em><\/strong><\/span><\/p>\n

    \"WhatsApp<\/strong><\/span><\/p>\n

    The\u00a0GI-tagged Chengalikodan Nendran Banana, processed mainly in Thrissur, Palakkad, and Kozhikode, supports a network of small farmer families and a large cottage industry of home\/ cluster-based chip makers and packers. The industry provides employment in frying, seasoning, packing, and micro logistics, forming a vital part of Kerala\u2019s MSME snack clusters. Valued at around \u20b9750 crore, Kerala\u2019s banana chips industry caters to airport retail, GCC Indian stores, and tourist markets.<\/strong><\/span><\/p>\n

    With the\u00a0GST rate reduced from 12%\/ 18% to 5%,\u00a0costs are expected to fall by ~6-11%,\u00a0making Kerala\u2019s iconic banana chips\u00a0more affordable\u00a0and\u00a0competitive\u00a0in domestic and export markets.<\/strong><\/span><\/p>\n

    Coir Sector<\/em><\/strong><\/span><\/p>\n

    The reduction of GST on the coir sector, including GI-tagged Alleppey Coir GI products such as mats, matting, ropes, and geotextiles,\u00a0from 18% to 5%, is expected to reduce cost by ~11%.\u00a0Concentrated in\u00a0Alappuzha, Kollam, and Perinad-Perumon, the industry supports a wide spectrum of workers, including husk collectors, retting\/ de-cortication workers, spinning and weaving units, and factory & export staff. The coir industry\u00a0employs around 3.7 lakh people,\u00a0with women making up about 80% of the total workforce.<\/strong><\/span><\/p>\n

    Kerala accounts for nearly 85% of India\u2019s coir production and serves as a major contributor to the country\u2019s total coir exports. The GST reduction is expected to\u00a0boost exports\u00a0and\u00a0strengthen livelihoods\u00a0across Kerala\u2019s coir clusters.<\/strong><\/span><\/p>\n

    Tourism & Ayurveda<\/strong><\/span><\/p>\n

    Tourism & hospitality<\/em><\/strong><\/span><\/p>\n

    \"Lower-GST-Boosts-Kerala\u2019s-Tourism-&-Wellness-Sector.jpg\"<\/strong><\/span><\/p>\n

    Kerala\u2019s tourism and hospitality sector,\u00a0majorly covers Kochi, Alappuzha, Kovalam, Varkala, Munnar, and Wayanad, employing a diverse workforce including youth from coastal and highland communities, with women actively engaged in homestays, Ayurveda wellness centres, handicrafts, and food catering. The sector plays a vital role in Kerala\u2019s economy, generating \u20b935,168.42 crore in total revenue in 2022.<\/strong><\/span><\/p>\n

    Hotels and homestays with rates up to \u20b97,500 are now taxed at 5% GST,\u00a0while inputs like toiletries and tableware have seen a rate cut from 18% to 5%, reducing costs by around 11%.\u00a0These reductions make stays and services\u00a0more affordable,\u00a0improving margins\u00a0for the industry and\u00a0boosting Kerala\u2019s appeal as a travel destination.<\/strong><\/span><\/p>\n

    Ayurveda & medicines<\/em><\/strong><\/span><\/p>\n

    Kerala\u2019s Ayurveda and medicine sector, spread across Thrissur, Kottakkal (Malappuram), and Aluva,\u00a0supports a wide workforce of herb gatherers, manufacturing workers in Ayurvedic product units, therapists and clinic staff in treatment centres. With\u00a0Ayurvedic drugs, devices, and products now taxed at 5% GST, costs are expected to fall by ~6-11%, improving affordability.<\/strong><\/span><\/p>\n

    The market covers wellness packages, chronic care, and OTC Ayurveda, catering to domestic patients and foreign wellness tourists. The GST cut is expected to enhance Kerala\u2019s competitiveness as a hub for traditional healthcare and wellness.<\/strong><\/span><\/p>\n

    Conclusion<\/strong><\/span><\/p>\n

    The GST reforms will benefit Kerala\u2019s economy, reinforcing the state\u2019s strengths across agriculture, food processing, fisheries, and cottage industries. By reducing tax rates on essential and value-added goods, from spices, coir, and cashew to tea, coffee, and Ayurvedic products, the reforms directly lower production costs while expanding market opportunities. For a state with numerous smallholders, cooperatives, and MSMEs, these changes will bring better margins, increased income, and greater competitiveness both within India and abroad.<\/strong><\/span><\/p>\n

    Overall, the new GST structure ensures that Kerala\u2019s economic growth is broad-based, reaching the farmer in Idukki, the fisherwoman in Kollam, the weaver in Alappuzha, and the entrepreneur in Kochi.<\/strong><\/span><\/p>\n

    Click here to see pdf<\/a><\/strong><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

    From Spices to Seafood: GST Reforms to Boost Kerala\u2019s Economy Posted On: 08 OCT 2025 10:28AM by PIB Delhi Key Takeaways 5% GST on cashew & coir products to benefit over 6.7 lakh workers across Kerala Food processing, employing 29.5% of Kerala\u2019s workforce, gains from reduced rates on pineapple, mango, and banana-based products 1.049 million …<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8890","post","type-post","status-publish","format-standard","hentry","category-education-news"],"_links":{"self":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts\/8890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8890"}],"version-history":[{"count":1,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts\/8890\/revisions"}],"predecessor-version":[{"id":8892,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=\/wp\/v2\/posts\/8890\/revisions\/8892"}],"wp:attachment":[{"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theeducationoverview.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}