From Tourism to Tea: How GST Reforms Will Transform Sikkim’s Economy

The GST 2.0 reforms are poised to be a game-changer for Sikkim’s economy, touching everything from tourism and wellness to pharmaceuticals and premium tea. Here's how the ripple effects are expected to unfold:

Tourism & Wellness: More Affordable, More Attractive
- Hotel stays under ₹7,500/night now attract only 5% GST, down from 12%, making travel more budget-friendly.
- Beauty and wellness services, vital to Sikkim’s wellness tourism, have seen GST slashed from 18% to 5%, boosting demand for herbal and traditional healing packages.
- With over 7.8 lakh people relying on tourism for income, this sector is expected to see a surge in visitors, longer stays, and more jobs.

Pharma Sector: Lower Costs, Higher Exports
- Sikkim hosts 50+ pharma companies, including giants like Sun Pharma and Cipla.
- GST on medicines has dropped from 12% to 5%, and 30 cancer drugs are now GST-free, reducing production costs.
- With pharma exports making up 63% of Sikkim’s total exports, the reforms will enhance global competitiveness.

Temi Tea & Organic Goods: Boosting Rural Livelihoods
- Temi Tea, a premium export from Namchi, now benefits from a GST cut from 18% to 5%, making it more affordable and marketable.
- Local specialties like Dalle Khorsani chilli and bamboo shoot pickles also benefit from reduced GST, strengthening both domestic and global reach.

Food Processing: Lower Prices, Higher Demand
- GST on items like pickles, juices, pastries, and soups has dropped from 12–18% to 5%, cutting shelf prices by up to 13%.
- Over 1,300 enterprises under the PMFME scheme will benefit, driving rural employment and seasonal procurement.

The Big Picture
These reforms align with Sikkim’s goals of economic diversification, rural upliftment, and export expansion. Whether it’s a tourist extending their stay in Gangtok or a tea grower fulfilling new orders, the GST cuts are designed to put more money in pockets and more momentum in markets.