The GST rate cuts across dairy products, agricultural inputs and food processing items will directly benefit over 10 crore dairy farmers and strengthen the cooperative sector, the Ministry of Cooperation said on Saturday.
The GST restructuring addresses the inverted duty structure in fertiliser manufacturing and is expected to prevent price rise for farmers while ensuring timely availability of inputs during sowing seasons. For dairy farmers, the exemption on milk and paneer, combined with reduced rates on processing equipment, is likely to improve margins for both individual farmers and dairy cooperatives. Major dairy brands, including Amul, have welcomed the announcement.
The reduction in tractor and component prices will particularly benefit small farmers engaged in mixed farming and animal husbandry as these tractors are commonly used for fodder cultivation and farm produce transportation.
These measures are designed to stimulate demand in semi-urban and rural areas, reduce household expenditure on essential food items and boost the food processing sector. By cutting logistics costs through reduced GST on commercial vehicles, the government aims to improve export competitiveness and reduce freight rates across the supply chain, the ministry said.
The decision also aligns with the government's natural farming mission by making bio-pesticides more affordable as compared to chemical alternatives, encouraging sustainable farming practices. These GST cuts represent one of the most comprehensive sectoral reforms targeting the agricultural and cooperative ecosystem with potential cascading benefits for rural entrepreneurship and food security, the ministry added.
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