Handicrafts & Handloom Bodies Forum Appeal GST @ 5%

Delhi/NCR – 30th August’2025 – The Export Promotion Council for Handicrafts (EPCH) has urged the Government of India and the GST Council to rationalize GST on all handicraft and handloom items to a uniform 5%, citing the sector’s cottage‑industry nature and its role in sustaining millions of artisan livelihoods especially women in rural clusters and the urgent need to unlock India’s domestic market potential through organized retail and cash‑and‑carry channels.

Joining EPCH in this appeal, a broad coalition of industry and cluster bodies including Young Entrepreneur Society (YES), Moradabad Handicrafts Exporters Association (MHEA), Artisan Society from Moradabad; India Expo Mart Limited (IEML), Greater Noida; Jodhpur Handicrafts Exporters Federation (JHEF), Jodhpur; Federation of Rajasthan Handicraft Exporters (FORHEX), Jaipur; All India Crochet Lace Exporters Association, Narsapur; Saharanpur Wood Carving Manufacturers Associations, Saharanpur; All India Agarbathi Manufacturers Associations, Bangalore; Handicraft Exporters Association Agra and others have submitted representations seeking a uniform 5% GST on handicraft and handloom items.

On domestic demand dynamics, Dr. Neeraj Khanna, Chairman-EPCH, said “With recent US tariff headwinds adding uncertainty to export realizations, a uniform 5% GST across all handicraft items will bring authentic handmade products within reach of more Indian households, catalyze modern retail and secure livelihoods in craft clusters. Our focus is clear to grow demand at home so producers can plan confidently, invest in better design and quality, and scale sustainably”.

Referencing the GST framework, Dr. Rakesh Kumar, Director General in the role of Chief Mentor – EPCH and Chairman – IEML shared “Handicrafts are classified across multiple HS code chapters by material like wooden products under Chapter 44, copper products under Chapter 74 etc leading to a fragmented GST structure that currently ranges from NIL and 5% on some items to 12%, 18%, and even 28% on others. This dispersion raises shelf prices, creates classification uncertainties and locks up working capital across artisan and MSME in value chain. While exports enjoy zero rated status under the GST framework, the immediate priority is to unlock domestic potential and consumption so that the artisans benefit from steady year round demands.”

R. K. Verma, Executive Director – EPCH said that “Rate rationalization to 5% directly improves margins for micro enterprises, accelerates inventory turnarounds and frees cash for raw materials. A single rate removes ambiguity across HS chapters, reduces working capital blockages and enables nationwide assortments of handcrafted SKUs. This outcome will lead to more shelf space for Indian handmade products and will lead to sustained growth for producer groups.”