GST and its Consequences on the Indian Textile Industry: An in-depth review
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Date
2025
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NHCE
Abstract
The Goods and Services Tax (GST) in India on 1 July, 2017, was one of the record transformative transformations in the nation’s economic landscape. Positioned as a noteworthy leap toward unifying the complex tax edifice of the country, GST exchanged a host of indirect taxes that were formerly levied by mutually the central and state governments. The reform was not only meant to streamline taxation but also to improve transparency, eliminate cascading taxes, and enhance overall compliance. While GST has had far-reaching implications across industries, its impact on the textile sector—a cornerstone of India’s cultural and economic fabric—has been particularly noteworthy.
The textile commerce in India is not just another economic sector; it is deeply woven into the social and historical narrative of the country. From ancient times, Indian textiles have been globally admired for their craftsmanship and diversity. Today, this industry involves a wide range of operations—from handloom and handicrafts to sophisticated textile mills and export- oriented garment units. It employs over 45 million people directly and another 60 million indirectly, making it the second-largest source of employment in India after agriculture. With such scale, any change in the policy environment, especially in taxation, directly affects a massive workforce and the livelihoods associated with it.