Big Diwali gift: GST rates slashed on farming inputs and dairy products; would benefit 80 million dairy farmers

Agriculture and dairy industry leaders on Thursday welcomed the government’s decision to slash GST rates on crucial farm inputs and dairy products, describing it as a lifeline for farmers coping with surging costs and uncertain weather.

The GST Council’s move covers fertilisers, biopesticides, farm machinery and dairy products. Experts say the step will lower cultivation expenses, lift farmer incomes and make healthy food items more affordable for households.


Sunil Kataria, CEO and MD of Godrej Agrovet Ltd, said the lower tax on fertilisers and biopesticides would provide “big relief” to farmers hit by erratic weather.

“With average input costs making up around 30-40% of total cultivation expenses, lowering these costs will increase accessibility of quality crop protection solutions, thereby helping farmers enhance yield and boost income,” he told PTI.

Kataria added that reducing GST on dairy products to 5% would encourage consumption, improve nutrition and support dairy families.

Narinder Mittal, president & managing director of CNH India, hailed the decision to cut GST on farm equipment, components and tyres to 5%, saying it would make mechanisation more accessible.

“These reforms will empower industry players to address labour shortages, enhance farmer productivity, and promote sustainable practices,” Mittal said. He also pointed out that the move was particularly significant before the harvesting season, as cheaper machinery would allow more farmers to adopt baling solutions and reduce stubble burning.

Divya Kumar Gulati, chairman of the Compound Livestock Feed Manufacturers’ Association of India (CLFMA), called the lower tax on dairy products a “progressive step” that would benefit India’s 80 million dairy farmers.

With UHT milk exempted from GST and items such as condensed milk, butter, ghee, paneer and cheese now taxed at 5% instead of 12%, Gulati said the reforms would strengthen rural incomes and spur investment in feed and animal care.

Devendra Shah, chairman of Parag Milk Foods Ltd, highlighted the impact on rural consumers.

“Higher demand will allow farmers better income stability and confidence to invest in better cattle care and feed,” PTI quoted Shah.

R G Agarwal, chairman Emeritus of Dhanuka Agritech, described the GST cuts as a “big Diwali gift” for farmers. He welcomed the inclusion of agri-drones, gibberellic acid and bio-pesticides such as trichoderma, pseudomonas fluorescens and neem-based products.

“This will encourage farmers to shift toward safer biological options, contributing to improved soil health and long-term agricultural performance,” Agarwal said. He further stressed that correcting the inverted duty structure on fertiliser raw materials would make production more viable and ensure timely supply of nutrients at lower costs.

While backing the reforms, Agarwal also suggested more rationalisation in crop protection chemicals using advanced chemistries and certain raw materials that are still taxed at higher levels.