From Looms to Coffee Beans: How GST Reforms Strengthen Nagaland’s Economy:

From Looms to Coffee Beans: How GST Reforms Strengthen Nagaland’s Economy Nagaland’s economy is based on its natural resources and growing small businesses. It includes farming, handloom, weaving, making handicrafts, and tourism. Recently, changes in the GST system were made to improve the state’s economy. These changes help by making tax rates simpler across different industries. With new GST rates products and services may become cheaper, and small/local producers and business owners can earn more. These reforms also give more people a chance to grow and earn more. Farmers, artisans, and small businesses can become stronger. With this support, Nagaland can grow as a centre for trade and tourism while keeping its rich culture.

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Handlooms

Handloom shawls and textiles, like the special GI-tagged Chakhesang shawls, are an important part of Nagaland’s craft economy. Most of the work in this sector is done by women, who weave from their homes using small looms. These weavers usually run small businesses. Approximately 44,000 people work in this field, helping to keep the traditional weaving skills alive. The GST rate on handloom shawls and textiles was reduced from 12% to 5% for items priced up to Rs 2,500 earlier the limit was Rs 1,000. This will enhance market competitiveness, increase weavers' incomes and support women artisans.

Tourism services

Nagaland’s tourism sector such as tour services, hotels, and homestays will also get benefits from the recent GST changes. The main tourist spots are Kohima, Dimapur, and the Hornbill Festival in Kisama, but tourism is slowly growing in other parts of the state too. With GST on hotel services reduced from 12% to 5%, rooms costing up to Rs. 7,500 will become cheaper. This will make travel more affordable and help tourism grow all over Nagaland.

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Bamboo and Cane Products

Nagaland’s bamboo and cane sector is mainly based in Sovima (Chümoukedima) and Dimapur, with clusters in other districts too. Since 2004, the Nagaland Bamboo Development Agency (NBDA) has helped grow bamboo-based industries. About 13,000 people work in this sector, including small businesses, home industries, and village carpenters. Their products, such as furniture, handicrafts, and eco-friendly decor, are famous in local markets. With GST on these items reduced from 12% to 5%, prices may drop by 6.25%, making them more affordable and helping artisans earn more.

Nagaland Coffee

The GST reforms have brought new chances for Nagaland Coffee. Tax on roasted coffee beans has been cut from 12% to 5%, and on coffee extracts from 18% to 5%. This makes coffee products cheaper and helps both growers and small businesses earn more. Coffee is grown all over the states with major areas in Wokha, Mokokchung, Mon, Zunheboto, and Tuensang. Most farms are operated by tribal smallholders who grow coffee under shade. Around 2,200 coffee growers were registered in 2022-23. Several small businesses are also involved in roasting and selling coffee. Nagaland coffee is sold in India and exported to places like South Africa, UAE, Germany, and Southeast Asia. Farmers usually sell green beans to traders, while roasted beans go to cafes and specialty buyers. The GST cut is expected to lower costs by 6.25% to 11%, making Nagaland coffee more competitive and profitable.