HYDERABAD: The Goods and Services Tax (GST) reforms are driving Telangana’s economic growth by lowering costs, boosting competitiveness, and expanding market access across key sectors — from food processing and pharmaceuticals to aerospace, automobiles, and handicrafts.
According to a release from the Press Information Bureau (PIB), in the food processing sector — which handles about 25% of Telangana’s agricultural output through 4,000 factories and 80,000 informal units — GST reductions on paneer, ghee, dry fruits, namkeen, bakery items, and GI-tagged products like Banaganapalle mangoes and Tandur red gram have significantly reduced prices. This, in turn, enhances affordability, strengthens fruit-to-factory procurement, and supports rural livelihoods.
In the pharmaceuticals sector, Telangana — home to over 800 life sciences firms contributing nearly 50% of India’s bulk drug exports — has benefited from GST reductions from 12% to nil on 30 cancer drugs, and to 5% on all personal-use medicines. This 6–7% cost reduction improves healthcare affordability and reinforces the state’s position as India’s “Life Sciences Capital.”
The aerospace and defence industry, which accounts for 31% of Telangana’s total exports, has gained from GST cuts on drones, tanks, armoured vehicles, and their components (from 28%/18%/12% to 5% or nil IGST), lowering manufacturing costs and enhancing export competitiveness. Similarly, the automobile and auto component sector, with exports worth Rs 256 crore in 2023–24, has benefited from GST reductions on small cars, motorcycles, and components — reducing production costs and improving affordability.
