GST and the agricultural sector in India: A review of opportunities, constraints, and policy imperatives

Abstract This structured review critically examines the impact of the Goods and Services Tax (GST) on India’s agricultural sector by integrating global taxation practices, national policy developments, and sector-specific analysis. Drawing on secondary data and documentary sources, the article follows a thematic progression from international experiences to domestic implementation. It finds that GST has improved supply chain efficiency, reduced interstate trade barriers, and supported the operationalization of the National Agricultural Market (NAM), enhancing transparency and market access. The review highlights fiscal incentives for sustainable practices and the role of Input Tax Credit in strengthening agribusiness viability. However, challenges persist, including increased input costs due to elevated GST rates on fertilizers, pesticides, and machinery, as well as financial strain on warehousing and cold storage infrastructure. Processed agricultural products face higher tax slabs, affecting affordability and demand. The study presents a conceptual framework across domains such as supply chains, inputs, product taxation, and NAM, and categorizes GST’s sectoral impact as mixed. It concludes with policy recommendations including differentiated tax rates, investment in rural digital infrastructure, and periodic review of exemptions to ensure that GST evolves as a tool for inclusive, efficient, and sustainable agricultural development.