SDG 8: Decent Work & Economic Growth | SDG 9: Industry, Innovation & Infrastructure
Institutions: Ministry of Finance | Government of Andhra Pradesh | GST Council
The recent GST rate rationalisation is expected to deliver relief and competitive gains across Andhra Pradesh’s traditional and modern sectors. Tax cuts span fisheries, dairy, automobiles, pharma, medical devices, renewables, GI crafts, and more - easing costs for consumers and producers alike.
Fisheries: GST cut to 5% on fish oils, extracts, preserved products, fishing gear, pumps, aerators, etc. supports ~14.5 lakh people in coastal districts and boosts seafood export competitiveness.
Dairy: UHT milk and paneer now GST-free; ghee, butter from 12% → 5%; ice cream from 18% → 5%. Lowers costs by ~5–7% for households and boosts margins for 24 lakh farmers.
Automobiles & Components: Cars (≤350 cc), three-wheelers shifted from 28% → 18%, with uniform 18% on parts. This is estimated to make vehicles ~8% cheaper and ease working capital for OEMs/MSMEs.
Pharma & MedTech: Over 250 drug units and 100+ device makers benefit. 30 cancer drugs moved to nil GST; many devices’ rates cut 12→5% or 18→5%, reducing costs by 7–13%.
Renewables: GST reduced from 12% → 5% on solar devices, heaters, fuel cell vehicles - potentially lowering project costs and accelerating green adoption.
Handicrafts & GI Products: GI coffee (Araku), Etikoppaka, Kondapalli toys, leather puppetry, stone carving, etc. see cuts from 12→5%, giving 6–7% relief and stronger competitiveness.
These reforms strengthen the integration of core livelihoods and high-tech sectors in AP’s growth model. Lower input costs and tax relief can catalyse domestic value addition, export diversification, and employment across rural and urban parts of the state.
Relevant Question for Policy Stakeholders:
How can Andhra Pradesh accompany these tax cuts with investments in logistics, skill infrastructure, and market access so that firms truly capture the gains long term?
Access the full news here: Boosting Growth and Competitiveness for Andhra Pradesh