Kerala , often called ” God’s Own Country , ” is deeply rooted in agriculture , marine resources , plantation crops, and handicraft production , each supporting numerous livelihoods. The recent GST reforms , which significantly reduced rates in key industries , are expected to make products and services more affordable , enhance export competitiveness, and strengthen income opportunities across value chains .
From the spice plantations of Idukki and Wayanad to the coir factories of Alappuzha , from the fisheries centers of Kochi and Kannur to the cashew corridor of Kollam , all of Kerala stands to benefit. Beyond goods , these reforms extend to services as well , with tourism , Ayurveda, and the health industry receiving tax breaks that will enhance their affordability and global appeal.
These reforms ensure that the benefits of development reach both producers and consumers , thereby reviving Kerala’s traditional strengths and paving the way for inclusive economic growth.
| Agriculture and Agro-Processing |
Cashew Processing – Roasted / Salted / Coated Nuts
Kerala’s cashew processing industry is centered around the Kollam Cashew Corridor , employing about 300,000 workers engaged in cashew shelling , dehulling , and grading in micro units and cooperatives . Reducing GST on cashew processing from 12%/18% to 5% will reduce costs by about 6-11% , depending on the earlier slabs .
This sector caters to the domestic snacking and gift markets , and products have now become more affordable under revised GST rates . Private – label contracts are boosting exports to retail markets in the Gulf Cooperation Council (GCC), the US, and the EU. The rate reduction will improve margins and competitiveness and strengthen Kerala’s cashew processors .
Wayanad Robusta Coffee
With the reduction of the GST rate on instant coffee and its products from 18% to 5% , Kerala’s Wayanad coffee belt is poised to become even stronger and more competitive. Coffee production in Kerala is dominated by small and marginal farmers who manage mixed cropping farms. The sector employs approximately 50,000 workers engaged in harvesting and pulping, as well as small entrepreneurs and roasters producing instant coffee mixes / coffee – based products .
The new GST rates are expected to reduce costs by approximately 11% . 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’s total coffee exports. The reduction in GST will make Kerala’s GI – tagged Robusta coffee more competitive in both domestic and export markets.
Malabar pepper
Reducing GST from 18% to 5% is expected to reduce costs by approximately 11% , significantly boosting Kerala’s spice economy. Cultivated primarily by small and marginal hill farmers in Wayanad , Kozhikode, and Kannur , pepper supports seasonal laborers and women engaged in cleaning , drying, and packing the spice .
One of Kerala’s most valuable GI – tagged products , Malabar pepper is a key ingredient in spice blends and spice extracts. In 2022-23 , India’s total pepper exports were valued at US$ 87 million , a large portion of which came from Kerala and was supplied to EU and US oleoresin buyers. GST reforms are expected to make Kerala’s pepper more price – competitive in global markets and strengthen the position of small farmers in the spice value chain.
Alleppey Green Cardamom
Grown primarily by small producers in Idukki plantations , Kerala’s GI – tagged green cardamom supports a network of small farmer groups , drying and curing operators , and a workforce engaged in grading , packing, and processing cardamom oleoresin / essential oil and spice blends. Alleppey Green is a well-known origin / brand of green cardamom in the state.
Reducing GST on spice mixes from 18% to 5% is expected to increase exports by 11% , reducing costs and providing a strong boost to Kerala’s spice economy. In 2023 , India’s total cardamom exports were worth US$ 102.43 million , a large portion of which came from Kerala. With lower GST , exporters can offer more competitive pricing , while small farmers , laborers, and processors can benefit from better income security .
Vazhakulam Pineapple
Reducing GST on processed pineapple products from 12% to 5% will significantly boost Kerala’s GI – tagged Vazhakulam pineapple cluster , especially in the Ernakulam and Thrissur regions . The industry comprises small farmers in these clusters , supported by daily wage laborers engaged in harvesting and packaging, as well as other workers employed in small processing units and FPO / cooperative factories. The food processing sector accounts for 29.5% of Kerala’s total employment , reflecting its socio – economic importance.
The Vazhakulam pineapple market currently handles 1,500 tonnes of the fruit daily , catering to about 98% of the domestic demand , while fresh and dried pineapple exports from Kerala account for 44% of India’s total trade in the region .
With the new GST rate of 5% , costs are expected to decrease by approximately 6.25% . This reduction will make pineapple products such as pulp , jam, and canned fruit more affordable in the domestic market and more competitive internationally.
Tirurvetilla ( Betel Leaf )
Vettila ( betel leaf ) from Tirur , Malappuram . It is set to receive a significant boost under the new GST framework , which has reduced rates on value-added mouth fresheners and pastes from 18% to 5% . This crop is primarily grown by small farmers who work on their family farms , supported by daily-wage harvesters and seasonal packers.
Demand is primarily coming from northern Indian states , where paan products remain popular , while e – commerce platforms are steadily expanding their market reach. The new rates have reduced the cost of value-added products like mouth fresheners and pastes by approximately 11% .
Kuttiyattoor Mango
Kuttiyattoor mangoes are a GI – tagged product cultivated by smallholders with 1-3 acres of land and worked by daily wage laborers during harvest. Processing is done by micro – processors for jams and pickles.
Reducing GST on jams / pulps / pickles from 12% to 5% is expected to reduce costs by 6.25% , directly benefiting FPOs and processors in Kannur. The global processed mango products market was estimated to be worth US$ 18.81 billion in 2024 , reflecting the scale of potential demand. Buyers include gourmet and pickle brands as well as online consumers of NRKs. The GST reduction will improve industry margins and help make Kuttiyattoor mango products more competitive in both domestic and export markets .
Fisheries and seafood processing
The fisheries sector, spread across Kochi , Kollam , Kozhikode, and Kannur, supports traditional fishing communities. While men are primarily engaged in fishing , women play a vital role in post-harvest activities such as drying , peeling , sorting, and packaging. The estimated fisherfolk population in Kerala is 1.049 million , reflecting the scale of livelihood dependence on this sector.
Reducing GST on fisheries and seafood processing to 5% is expected to reduce costs by 6-11% , benefiting Kerala’s coastal economy. In 2022-23 , the state produced 6.87 lakh tonnes of marine fish , contributing about 1.80% to Kerala’s gross state domestic product (GSDP) . In the same year , Kerala exported 218,629 tonnes of marine products worth ₹8,285.03 crore . The reduction in GST will help increase export competitiveness and improve income sustainability in the sector.
| MSME and cottage industries |
Packed spice mixes
Kerala’s packaged spice mix industry, spread across Kochi , Idukki , Wayanad, and Kozhikode, provides livelihoods primarily to small farmers , with many women employed in drying , cleaning, and sorting spices . Backed by robust infrastructure such as the Spice Park in Puttady , Kerala remains a significant contributor to India’s growing spice economy.
Recently, the GST on packaged spice mixes was reduced from 18% to 5% . It is estimated that this will reduce prices by approximately 11% . This will increase Kerala’s global competitiveness and make its spice products more affordable for consumers .
Tea Value Chain
The reduction of GST from 18% to 5% is expected to benefit Kerala’s Idukki – Munnar tea plantations and Kochi-based packers and auctioneers. The sector employs approximately 4.18 lakh workers , including plantation workers engaged in plucking and farm care , small growers , factory workers, and brokers.
The total value of plantation crops produced in the state accounts for approximately 23.27% of India’s total export value in this sector . The GST reduction will reduce the cost of packaged / instant / RTD tea by approximately 11% . This will strengthen Kerala’s position in India’s tea industry and ensure sustainable livelihood opportunities in its tea-producing areas .
Chengalikodan ( Chengalikodan ) Nendran Banana
The GI – tagged Chengalikodan banana, processed primarily in Thrissur , Palakkad, and Kozhikode , is the base for a large cottage industry of small farmer families and household / cluster – based chip manufacturers and packers. This industry provides employment in frying , seasoning , packing, and micro-logistics , forming a significant part of Kerala’s MSME snack cluster. Valued at approximately ₹750 crore , Kerala’s banana chips industry caters to airport retail , GCC Indian stores, and tourist markets.
The GST rate has been reduced from 12%/18% to 5% . Costs are expected to decrease by 6-11% , making Kerala’s iconic banana chips more affordable and competitive in the domestic and export markets.
| coir sector |
The reduction in GST on the coir sector , including GI – tagged Alleppey coir GI products such as mats , mats , ropes, and geotextiles , from 18% to 5% is expected to reduce costs by about 11% . Concentrated in Alappuzha , Kollam, and Perinad – Perummon , the industry employs a variety of workers, including husk collectors , retting / cortication workers , spinning and weaving units , and factory and export workers. The coir industry employs about 3.7 lakh people , with women constituting about 80% of the total workforce .
Kerala produces approximately 85% of India’s coir production and is a major contributor to the country’s total coir exports. The GST reduction is expected to boost exports and create livelihood opportunities in Kerala’s coir clusters .
| Tourism and Ayurveda |
tourism and Hospitality
Kerala’s tourism and hospitality sector , primarily covering Kochi , Alappuzha , Kovalam , Varkala , Munnar, and Wayanad , employs a diverse workforce, including youth from coastal and highland communities , while women are actively engaged in homestays , Ayurveda wellness centers , handicrafts, and food catering. The sector plays a vital role in Kerala’s economy , generating a total revenue of ₹35,168.42 crore in 2022 .
Hotels and homestays with rents up to ₹ 7,500 will now be subject to a 5% GST. The tax rate on inputs such as toiletries and tableware has been reduced from 18% to 5% , reducing costs by approximately 11% . These reductions have made accommodation and services more affordable , improving margins for the industry and increasing Kerala’s popularity as a tourist destination .
Ayurveda and medicines
Kerala’s Ayurveda and medical sector , spread across Kottakkal ( Malappuram ) and Aluva , supports a broad workforce of herb collectors , construction workers in Ayurvedic product units , physicians in treatment centers, and clinic staff. With the 5% GST now applicable on Ayurvedic medicines , equipment, and products , costs are expected to fall by approximately 6-11% , improving affordability.
This market covers wellness packages , chronic care, and OTC Ayurveda for domestic patients and foreign wellness tourists . The GST reduction is expected to enhance Kerala’s competitiveness as a hub for traditional healthcare and wellness.
| conclusion |
The GST reforms will benefit Kerala’s economy and strengthen the state’s strengths in agriculture , food processing , fisheries, and cottage industries. By reducing tax rates on essential and value-added goods, from spices , coir , and cashews to tea , coffee, and Ayurvedic products , these reforms directly reduce production costs and expand market opportunities. For a state with many small farmers , cooperatives, and MSMEs , these changes will lead to better margins , increased income, and improved competitiveness both in India and abroad.
Overall , the new GST structure ensures that Kerala’s economic growth is broad-based , reaching the farmers of Idukki , the fishermen of Kollam , the weavers of Alappuzha and the entrepreneurs of Kochi.
