Shivraj Singh Chouhan, the Union Minister for Agriculture and Farmers Welfare and Rural Development, will chair a meeting with representatives of the agricultural equipment industry on Friday to ensure that benefits are widely passed on to farmers and make strategies for the smooth implementation of these strategies, the Ministry of Agriculture and Farmers Welfare said on Thursday.

The meeting will be attended by the representatives of the Tractor and Mechanisation Association (TMA), Agricultural Machinery Manufacturers Association (AMMA), All India Combine Harvester Manufacturers Association (AICMA), Power Tiller Association of India (PTAI), and other related organisations.

The government, as part of its recent sweeping overhaul of the GST structure in the 56th meeting of the GST Council, reduced GST rates on agricultural machinery and equipment from 12% to 18% to 5%. The GST rate cut will significantly reduce the price of tractors and other machinery for farmers by 7–13%.

Farmers will also gain the dual benefit of subsidy schemes combined with lower taxation. At the same time, indigenous agricultural machinery manufacturers will receive a competitive edge under the vision of Aatmanirbhar Bharat, the ministry added.

The food-processing sector has also been a major beneficiary of this rationalisation of tax rates, with most products witnessing a decline to 5% GST slab, according to the Ministry of Food Processing earlier this month. This rationalisation of GST to lower levels provides a variety of stimulants to the sector and encourages a virtuous cycle of economic growth.

It further stated that this will be achieved through four primary means, namely, increased consumption, investment, improved employment opportunities, and enhanced income levels for farmers and food processors.

After announcing the GST reforms, Nirmala Sitharaman, the Union Minister of Finance and Corporate Affairs, has provided significant support to labour-intensive industries. Additionally, health-related items will also benefit, as will farmers and agriculture as a whole. Prime Minister Narendra Modi hailed the GST reforms as a big win for farmers.

The reduction of GST rates in the automotive sector will also lower logistics costs and exports, which will not only improve India’s export competitiveness but also strengthen agricultural supply chains.