The goods and services tax (GST) cuts and the onset of the festive season appear to have lifted spirits among the country’s small businesses, according to industry bodies. Sectors such as toys, textiles, and footwear have reportedly seen a pick-up in demand. The Micro, Small and Medium Enterprises (MSME) Ministry, which is keeping a close watch on developments, is expected to conduct a review soon.
A senior official from the ministry said that authorities were monitoring developments following the implementation of GST concessions. The official added that initial feedback from MSMEs had been positive across sectors, but it was too early to make any conclusive statements.
India recently moved to a two-slab GST structure—5% and 18%—reducing tax rates on a wide range of household items, automobiles, and consumer durables. Industry associations noted that these cuts had provided a leg-up to MSMEs, with most reporting robust order books. The industry expects the momentum to continue beyond the festive season.
Animesh Saxena, general secretary of the Garment Exporters & Manufacturers Association, highlighted that apparel priced between Rs. 1,000 and 2,000 (US $ 11–12) had seen increased interest from consumers, as the GST rate for clothes priced below Rs. 2,500 (US $ 28) was reduced to 5%. Saxena added that demand for apparel had grown by 15–20% this festive season compared with last year, noting that GST reforms had given a boost to Indian buyers’ consumption.
In the footwear sector, Gopal Gupta, president of the Agra Footwear Manufacturers & Exporters Chamber, noted that shoes—particularly synthetic ones priced below Rs. 2,500 (US $ 28), which now attract a 5% GST—were drawing consumer interest. He added that moving footwear below Rs. 2,500 (US $ 28) to a lower tax slab was likely to further boost demand.
