GST Cuts to Boost Kerala’s Spice, Coir, and Food-Processing Industries

Kerala’s spice, coir, and food-processing industries are expected to grow significantly after the government reduced GST rates on many key products, officials said on Wednesday.

The new GST cuts lowered costs by up to 11 percent for cashew processing, spices like Malabar pepper, and instant coffee. This helps producers and processors earn more and make their products more affordable.

The rate reductions are likely to increase exports, make products cheaper for consumers, and create more income opportunities across the state.

Official added, “From the spice gardens of Idukki and Wayanad to the coir factories of Alappuzha, the fisheries clusters of Kochi and Kannur, and the cashew corridor of Kollam, all of Kerala is set to gain. Beyond goods, the reforms extend to services, with tourism, Ayurveda, and wellness industries witnessing tax relief that enhances affordability and global appeal.”

The new GST rates are:

• Cashew processing: from 12% and 18% to 5%
• Instant coffee and related products: from 18% to 5%
• Malabar pepper and extracts: from 18% to 5%
• Masala mixes: from 18% to 5%
• Processed pineapple products: from 12% to 5%

Kerala’s cashew industry, which supplies snacks and gifts, will benefit from lower prices and better profits. The spice sector will become more competitive globally, helping small farmers.

The coir industry, including GI-tagged Alleppey coir products like mats, ropes, and geotextiles, will also see an 11 percent cost reduction. About 3.7 lakh people work in this sector, with women making up 80 percent of the workforce.

These GST reforms are expected to make Kerala’s pepper more price–competitive in global markets and will help in strengthening the position of smallholder farmers within the spice value chain.