Thiruvananthapuram, Oct 9 (UNI) Kerala’s diverse economy — rooted in spices, cashew, coir, seafood, and tourism — is poised for a major boost following a series of recent Goods and Services Tax (GST) reforms.
The revised tax structure, which lowers GST rates across key traditional and emerging sectors, is expected to reduce production costs by 6 to 11 per cent, enhance export competitiveness, and strengthen livelihoods across the state’s value chains.
Cashew and coir products will now attract only 5 per cent GST, benefiting more than 6.7 lakh workers in these sectors, sources said.
The reduction in tax on pineapple, mango, and banana-based products will support Kerala’s food processing industry, which employs nearly 29.5 per cent of the state’s workforce.
A 5 per cent GST on processed seafood and tea will directly benefit 1.049 million fisherfolk and 4.18 lakh plantation workers.
Prices of spices, coffee, processed and dried fruits are set to fall by up to 11 per cent, while tourism and Ayurveda services under the 5 per cent GST slab are expected to attract more global visitors.
The cashew processing industry in Kollam, employing around three lakh workers, stands to gain significantly from the GST cut from 12–18 per cent to 5 per cent.
The move is expected to lower processing costs by up to 11 per cent, strengthening Kerala’s cashew exports to GCC countries, the US, and the EU, while boosting margins for small processors and cooperatives.
With GST on instant coffee and related products slashed from 18 per cent to 5 per cent, Kerala’s smallholder-dominated coffee sector is set for revival.
The change will reduce production costs by about 11 per cent, enhancing the competitiveness of the state’s GI-tagged Wayanadan Robusta, which accounts for a major share of India’s coffee exports.
The iconic Malabar Pepper, cultivated in Wayanad, Kozhikode, and Kannur, will benefit from an 18 to 5 per cent GST reduction, cutting costs by around 11 per cent.
The move is expected to reinforce Kerala’s spice economy and sustain the livelihoods of small and marginal farmers and women engaged in post-harvest processing.
The GST cut on spice mixes and oleoresins from 18 to 5 per cent will benefit small cardamom farmers and processors in Idukki and Alleppey, reducing costs by 11 per cent.
With Kerala contributing a major share of India’s USD 102.43 million cardamom exports in 2023, the move is likely to enhance income stability and export competitiveness.
The GI-tagged Vazhakulam Pineapple, a flagship product from Ernakulam and Thrissur, gains from the tax cut on processed pineapple goods from 12 to 5 per cent, bringing down costs by about 6.25 per cent.
The measure is expected to expand domestic and export markets for Kerala’s fruit processing sector, which employs nearly one-third of the state’s workers.
The Thirur Vettila (betel leaf) industry in Malappuram will also benefit as GST on value-added mouth fresheners and pastes drops from 18 to 5 per cent, reducing prices by 11 per cent.
With growing demand from northern India and e-commerce channels, the change is expected to revive smallholder and seasonal employment in the sector.
The GI-tagged Kuttiattoor Mango from Kannur region is set to gain from a 12 to 5 per cent GST cut on jams, pickles, and pulps, reducing costs by around 6 per cent. The change will boost returns for farmer-producer organizations and small processors catering to domestic and expatriate markets.
Kerala’s 1.049 million fisherfolk, mainly based in Kochi, Kollam, Kozhikode, and Kannur, will benefit from the 5 per cent GST rate on seafood and fish processing, which lowers costs by up to 11 per cent.
With Kerala contributing 6.87 lakh tonnes of marine production and exports worth ₹8,285 crore in 2022–23, the tax reform is expected to enhance profitability and sustainability in the coastal economy.
Kerala’s spice-mix industry, concentrated in Kochi, Idukki, Wayanad, and Kozhikode, employs thousands of women in cleaning, grading, and packaging. Reducing GST from 18 to 5 per cent will lower consumer prices by 11 per cent, boosting the competitiveness of Kerala’s globally renowned spice products.
Tea grown and processed in Idukki and Munnar will benefit from the tax cut from 18 to 5 per cent, lowering costs by 11 per cent. The move supports over 4.18 lakh workers and strengthens Kerala’s position in India’s tea exports, contributing over 23 per cent of national value.
The GI-tagged Chengalikodan Nendran banana, processed mainly in Thrissur, Palakkad, and Kozhikode, forms the backbone of Kerala’s MSME snack industry valued at ₹750 crore. The GST reduction to 5 per cent will cut costs by up to 11 per cent, making the state’s popular banana chips more affordable and export-friendly.
Kerala’s famed Alleppey coir products, including mats, ropes, and geotextiles, will benefit from a GST cut from 18 to 5 per cent, reducing costs by 11 per cent. Employing 3.7 lakh workers, 80 per cent of them women, the coir industry is expected to gain new export momentum under the revised tax regime.
Kerala’s tourism sector, centered around Kochi, Alappuzha, Kovalam, Varkala, Munnar, and Wayanad, is among the biggest beneficiaries. Hotels and homestays priced up to ₹7,500 now attract only 5 per cent GST, while related goods and services like food and décor items also see reduced tax rates.
In 2022, the sector generated ₹35,168 crore in revenue, and the new structure is expected to make Kerala more affordable for global travelers while improving business margins.
Kerala’s traditional Ayurveda sector, concentrated in Thrissur, Kottakkal, and Aluva, now enjoys a 5 per cent GST rate on medicines and related products, reducing costs by 6 to 11 per cent.
The reform is expected to expand the state’s presence in the wellness tourism and OTC healthcare markets, while making traditional treatments more accessible to both domestic and foreign patients.
The sweeping GST reforms are set to revitalize Kerala’s traditional strengths—from agriculture and food processing to fisheries, cottage industries, and tourism.
By reducing tax rates on essential and value-added products, the new structure directly lowers production costs, widens market access, and boosts income security for millions of small producers and workers.
In essence, the restructured GST framework ensures that the benefits of growth reach farmers in Idukki, fisherwomen in Kollam, weavers in Alappuzha, and entrepreneurs in Kochi, driving inclusive and sustainable economic development across Kerala.
