Union Minister of Commerce and Industry Piyush Goyal has made a significant appeal to India Inc., urging them to ensure that the benefits of the recent Goods and Services Tax (GST) rate cuts are fully passed on to consumers. Speaking at the Bharat Nutraverse Expo 2025 in New Delhi, Goyal emphasized that the reduction in GST rates across various categories of goods is expected to provide a substantial boost to consumption demand, thereby spurring economic growth. The minister described the GST rate cuts as a "festival gift" from Prime Minister Narendra Modi, highlighting the transformative potential of these reforms.
Goyal noted that the Prime Minister had hinted at significant reforms in his August 15 address, and the announcement of the GST rate cuts on Wednesday exceeded expectations by covering a wide range of products, goods, and services. The minister expressed gratitude to the Prime Minister for this initiative, which he believes will create a win-win situation for both businesses and consumers. He urged the industry to ensure that every rupee saved through the GST reduction is passed on to consumers, emphasizing that under the new structure, GST on several categories has been reduced to as low as 5 percent.
The minister stressed that this reduction will result in substantial savings across the sector, acting as a strong demand booster. Lower prices naturally drive higher consumption and accelerate industry growth. Goyal also called on the industry to make a strong twin commitment to the Prime Minister: first, to pass on every rupee of savings from the GST reduction to consumers, and second, to actively promote Indian products. He emphasized the need to support products made with the sweat and toil of hardworking Indians, products nurtured in the soil of India.
Transformative Impact of GST Reforms
The revised GST rates, which will come into effect from September 22, are expected to leave consumers with more money in their pockets. The tax on utility items found in almost every Indian home, from utilities to packaged food to utensils, has been cut from 18% to 5%. If this is passed on in its entirety, consumers can expect to see a significant reduction in their monthly bills. For instance, someone buying a ₹20,000 annual health policy would previously shell out an extra ₹3,600 as taxes. Removing this tax can make protection cheaper and more affordable, potentially saving around ₹3,600 each year.
The GST Council has approved a dual tax structure of 5 percent and 18 percent, removing the slabs of 12% and 28%. This decision, backed by finance ministers of all states, is expected to bring relief to common citizens. Personal care items, including hair oil, soap, shampoo, toothpaste, and toothbrush, will now fall under the 5 percent slab, bringing relief for families who spend regularly on hygiene products. Dairy items like butter, ghee, and cheese spreads are also included in the reduced category.
Household goods such as kitchenware, tableware, and sewing machines are covered under the lower rate. For parents, baby products like bottles, napkins, and clinical diapers will now cost less. Medical devices, including thermometers, oxygen, diagnostic kits, glucose meters, and spectacles, are also placed in the 5 percent slab. Consumer electronics have seen a significant reduction. Air conditioners, televisions larger than 32 inches, washing machines, and motorcycles up to 350cc capacity now attract 18 percent instead of 28 percent.
Economic Growth and Domestic Manufacturing
Goyal further elaborated on the importance of manufacturing in India, stating that it does not matter whether the ownership lies with an Indian entrepreneur or a foreign investor—what matters is that the products are manufactured in India. This, he said, creates jobs for Indian youth, generates opportunities for local communities, and contributes to the nation's growth story. He added that every product made in India carries with it the aspirations of 1.4 billion people and symbolizes the country's journey towards Viksit Bharat 2047.
Referring to India's robust economic performance, Goyal highlighted that the GDP grew by 7.8 percent in the first quarter. Despite global turmoil and uncertainty, he noted, India continues to remain the fastest-growing large economy and, under the decisive leadership of Prime Minister Narendra Modi, will continue to lead for the next two decades. He reiterated the government's vision of taking India's GDP from 4trillionto4trillionto30 trillion by 2047, stressing that India will emerge as a prosperous and developed nation.
Goyal also touched upon the role of the nutraceuticals sector in supporting India's growth. He noted that a fit and healthy India, supported by the nutraceuticals sector in a big way and by healthy food products, is key to India's growth. The sector, he said, is not only helping farmers and supporting micro, small, and medium enterprises but is also contributing to every Indian's healthcare. He highlighted the immense contribution of turmeric to health, the powerful benefits of ginger, and the role of probiotics in providing young Indians with quality protein and nutrition.
The GST reforms are expected to be transformational for businesses, with significant impacts across various sectors, including the pharma sector and micro, small, and medium enterprises (MSMEs). The reforms are seen as a continuation of several initiatives over the last 11 years, aimed at boosting economic growth and supporting the country's development journey. Historically, tax reforms have played a crucial role in shaping economic landscapes. The introduction of the GST in India in 2017 was a landmark reform that replaced a complex web of indirect taxes with a unified tax structure.
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