Odisha’s Artisans Welcome 5% GST Relief, But Say It’s ‘A Small Step’

When the Goods and Services Tax (GST) Council approved sweeping reforms in September 2025, announcing a two-tier slab system of 5% and 18%, it reverberated through India’s artisan corridors. Central communications affirmed that lower rates for handicrafts would strengthen livelihoods and preserve cultural traditions. For many craft clusters in Odisha, the news arrived like overdue recognition. Yet, the 5% label doesn’t mean a flat blanket relief. 

Official notifications show that many handcrafted items now attract only 2.5% central tax and corresponding state tax under specified HSN/ITC codes. Meanwhile, hand-loom textiles continue to face value-based thresholds, like goods sold at or below ₹1,000 per piece, to qualify for 5% rather than a higher rate. Thus while the tax change is welcome, the devil lies in the detail: registration, correct classification, value limits and supply-chain clarity all matter.

On The Ground in Odisha’s Craft Ecosystem

In the weaving hamlets of Nuapatna, Odisha’s Ikat community is cautiously optimistic. Third-generation weaver Sarat Sahu reflects says, “We often work on advance orders, and between yarn prices, dye costs and transport, there’s very little left. If GST comes down even slightly, it means we can buy materials with less worry about upfront taxes.” He continues, “But unless buyers are paying fair prices, our situation doesn’t really change. The government must also help us reach new markets.” What Sahu emphasises is critical: tax relief alone cannot offset long-standing structural disadvantages.

Similarly, in Balakati’s terracotta cluster, earthenware artisan Kusum Nayakoffers a realistic perspective. “It’s good that the GST is lower now, but we still struggle with rising clay costs, transport and packaging. Our margins are thin. Sometimes, even if we sell all the pieces, we hardly save much. But yes, psychologically, it feels encouraging that the government is recognising our work.” The relief in the tax rate is felt as a breeze rather than a gale — helpful, but not propulsive. 

Brands Weigh in With Nuance

From brand vantage points, the nuance becomes clearer. At Reemly’s Design Studio, founderReemly Mohantysays, “The revised GST rate of 5% feels like a small yet meaningful relief for the artisan community in Odisha. … For those of us working closely with hand-loom weavers and artisans, it helps in easing the pressure on production costs and encourages fairer pricing without diluting the authenticity of handmade work.”

She also notes: “For a brand like ours that mostly deals in finished hand-loom pieces, the GST difference between stitched and unstitched products still exists. … the revised rate hasn’t really increased our profit margins; it has definitely helped us keep prices more stable for our customers, without constantly recalculating or compromising on artisan payouts.”

At the mid-premium label Boito, a spokesperson offers a slightly different view. “The new 5% GST reform is a welcome step for artisans and emerging maker clusters. At Boito, our garments sit above this price bracket (Rs. 2,500 per piece), so it doesn’t directly affect our pricing—nor does it impact what we pay our weavers. Our focus remains on ensuring fair value for them and honouring the time, skill, and heritage that shape every textile.”

These voices underscore the same reality: the rate cut matters, but its benefit depends on where the product sits, what value it carries, and how the supply chain functions.

From Relief to Real Change

The GST relief offers a meaningful message that craft matters and that government policy can recognise the value of handmade work. In official terms, a number of handicraft and hand-loom products have been moved from 12% to 5% (or equivalent) slabs, including floor-coverings and carpets under HS code 5705. Yet the translation from policy to profits isn’t automatic. For many artisans in Odisha, the real challenge lies in market access, digital visibility and a fairer pricing ecosystem.

Arjun Pal, a weaver from Maniabandha, says, “We have been demanding a rationalised GST for years. Earlier, customers hesitated to pay the extra cost for hand-loom sarees and handicraft products, which affected sales. Now, with GST cut to 5%, our products will become more affordable.” That optimism is genuine — but so too is the caution. The same report notes lingering issues: marketing-weaknesses, middle-men taking disproportionate share of value, and limited e-commerce reach.

For Odisha’s craft sector to truly benefit, three levers must align: first, artisans must be correctly registered and their goods classified under the relevant HSN/ITC codes so that they can access the lower tax slab; second, they must be integrated into supply-chains and value-chains that respect their craft, pay them fairly and bypass exploitative agents; third, the market demand for authentic handmade work must grow, both domestically and internationally. The GST cut opens the door — but walking through it requires design-innovation, digital-access and consumer awareness.

In the kilns of Balakati, where terracotta lamps dry in the dawn light, and the looms of Nuapatna, where threads make their slow passage into sarees, the 5% (or equivalent) tax rate may appear as a modest gust of wind. Still, for a sector used to heavy headwinds, a change in direction counts. As Reemly summarises: “It’s a positive step, but not a game-changer yet. It makes things a little easier, not necessarily more profitable for both the brand and the artisans.”

For the hands that shape clay, thread and metal each day, the tax reform offers relief, recognition and a renewed possibility. The next chapter will reveal whether the relief becomes realised prosperity.