India&rsquo;s next-generation GST reforms are being hailed as a game-changer for the textile sector, expected to accelerate the country&rsquo;s journey towards becoming a $350 billion textile economy by 2030.
The Ministry of Textiles emphasized its commitment to collaborate with industry stakeholders, exporters, artisans, and entrepreneurs to ensure seamless implementation of these reforms.
&ldquo;These landmark reforms will reduce costs, remove structural anomalies, sustain jobs, and strengthen the entire textile value chain from fibre to fashion to foreign markets,&rdquo; the ministry said.
Aligned with the Prime Minister&rsquo;s 5F formula Farm to Fibre to Factory to Fashion to Foreign&nbsp;the GST rationalisation aims to position India as a global textile powerhouse. The reforms address distortions, lower production costs, boost domestic demand, support exports, and enhance global competitiveness.
The GST adjustments include:
<ul data-start="1129" data-end="1297">
<li style="font-family: georgia, palatino, serif; font-size: 12pt;" data-start="1129" data-end="1167">
Fibres: Reduced from 18% to 5%
</li>
<li style="font-family: georgia, palatino, serif; font-size: 12pt;" data-start="1168" data-end="1205">
Yarns: Reduced from 12% to 5%
</li>
<li style="font-family: georgia, palatino, serif; font-size: 12pt;" data-start="1206" data-end="1297">
Readymade garments and made-ups: 5% GST up to Rs 2,500 per piece (earlier Rs 1,000)
</li>
</ul>
&ldquo;Given the labour-intensive nature of garmenting, higher demand will sustain and expand employment, especially for women in stitching, tailoring, and finishing units. The move will also support &lsquo;Make in India&rsquo; brands, helping them compete with cheap imports in low and mid-price segments,&rdquo; said the ministry.
The reforms correct the inverted duty structure, align fibre-yarn-fabric rates, and reduce working capital burdens for manufacturers. Small and medium units producing man-made fibres will benefit from lower costs, improved cash flows, and enhanced price competitiveness in global markets.
On carpets and floor coverings, GST has been reduced from 12% to 5%, benefiting export hubs like Bhadohi and Srinagar, supporting traditional crafts, and improving domestic affordability. Additionally, GST on 36 handicraft items, cotton rugs, and handwoven carpets has been reduced to 5%, offering relief to artisans and boosting rural livelihoods.
The reforms also include simplified GST refund processes for zero-rated supply and inverted duty structures, along with the removal of the Rs 1,000 threshold for small consignments via courier or post. A simplified GST Registration Scheme for small and low-risk businesses will further ease compliance.
&ldquo;These steps collectively strengthen India&rsquo;s textile ecosystem, empower artisans and MSMEs, and reinforce India&rsquo;s position as a global textile hub,&rdquo; the ministry noted. [Except for the headline, this article has not been edited by the Benefit News editorial team and is published directly from the IANS news feed]

GST Reforms to Boost India Textile Sector by 2030

Next-gen GST cuts costs, boosts exports,and aims to grow India’s textile industry to $350B

GST Reforms to Boost India Textile Sector by 2030

Next-gen GST cuts costs, boosts exports,and aims to grow India’s textile industry to $350B

September 5, 2025 | 16:55 IST