GST relief: A new lifeline for Kashmir’s handicraft industry, could revive exports and domestic demand
Srinagar, Sep 4, KNT: The GST Council’s decision to cut tax rates on handicrafts from 12 percent to 5 percent is being viewed as a turning point for Kashmir’s traditional craft sector, which employs lakhs of artisans but has been battling declining sales, shrinking margins and repeated disruptions in recent years.
For decades, Kashmiri handicrafts, from carpets and papier-mache to shawls and walnut woodwork, have been the Valley’s cultural ambassadors across the world. Yet the sector’s economic base has eroded, with artisans struggling to survive. According to industry insiders, multiple factors have contributed: competition from machine-made imitations, rising raw material costs, and above all, high taxation under GST which made Kashmiri products less competitive in domestic and export markets.
“This tax cut is not just financial relief; it is a recognition of the sector’s importance,” said a Srinagar-based exporter to the news agency Kashmir News Trust. “The shift from 12 percent to 5 percent will reduce costs for buyers, increase demand, and make Kashmiri handicrafts competitive again, especially in the international market where margins are thin.”
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The Kashmir Chamber of Commerce and Industry, which had lobbied strongly for the change, argues that the lower GST will directly benefit grassroots workers. “Handicrafts are labour-intensive. Every rupee saved from taxation trickles down to the artisan who works on a loom or with a chisel,” said President Javid Ahmad Tenga.
Industry estimates suggest that the handicraft sector provides employment to over three lakh people in Jammu and Kashmir, many of them from economically weaker backgrounds. For such households, even modest increases in earnings can be transformative. “A shawl weaver earns only a few hundred rupees a day. When GST eats into profits, it is the artisan who suffers. The reduced rate will ease their burden,” said an official from the Directorate of Handicrafts.
The sector has also been one of the worst-hit by repeated disruptions, from the 2019 lockdown to the pandemic, followed by global slowdowns. Export volumes have dropped sharply over the past five years. Traders believe that the new tax regime could help the sector claw back lost ground by encouraging both domestic and overseas buyers.
Economists argue that the relief must be paired with stronger marketing and support infrastructure. “Tax cuts alone cannot revive handicrafts. The government must also strengthen artisan credit schemes, raw material supply, and branding of Kashmiri products abroad. Only then can the sector reach its full potential,” said an economics professor at Kashmir University.
For artisans, however, the immediate impact is psychological as much as financial. “For years we felt ignored. This decision tells us that our voice matters,” said a carpet weaver in Downtown Srinagar. “We hope it will bring buyers back and keep our craft alive.”
If implemented effectively, the GST cut could restore some vitality to a sector that is both an economic pillar and a cultural emblem of Kashmir. But the real test, industry experts say, will be whether policymakers follow through with consistent support rather than one-off relief. [KNT]
