Noor Ali Zahgeer:
Kashmir’s handicrafts sector, often described as the soul of the region’s cultural and economic identity, finds itself at a precarious juncture. Known for its exquisite Pashmina shawls and intricately embroidered crewel items, this sector sustains over 250,000 artisans, many of whom hail from marginalized communities. Yet, despite its rich heritage and potential for global economic success, the industry faces an existential threat due to a proposed increase in the Goods and Services Tax (GST) on traditional textiles.
This tax hike, which raises GST rates from 12% to 28% on textile products priced above ₹10,000, has sparked widespread concern. The rate is usually reserved for sin goods like cigarettes or luxury cars, leaving many to question the rationale behind categorizing a cultural artifact such as the Kashmiri shawl alongside items deemed harmful or non-essential.
A Historical and Cultural Asset
The Kashmiri shawl holds a storied history, revered worldwide for its craftsmanship and cultural significance. Historical records reveal that these shawls were once prized possessions among European aristocracy. Napoleon Bonaparte famously gifted a Kashmiri shawl to Empress Josephine, and they became a staple of Victorian fashion in 19th-century Europe.
More than just luxury items, these shawls embody centuries-old traditions passed down through generations. The production process—spinning, weaving, and embroidering—relies entirely on artisanal skills. Each shawl represents months of meticulous labor, often by entire families of craftsmen.
Despite their global appeal and historical importance, Kashmiri shawls remain underappreciated in policy circles. The sector has struggled to gain recognition as a cultural industry eligible for intellectual property rights under UNESCO or preferential trade agreements.
The Economic Lifeline of Kashmir
Kashmir’s handicrafts sector is an economic lifeline in a region with limited industrial infrastructure. Employing over 3 lakh artisans, the industry provides sustainable livelihoods, particularly to women who play a crucial role in spinning Pashmina yarn. The sector’s labor-intensive nature, low capital requirements, and high employment intensity make it a model for inclusive growth.
The global handicrafts market, valued at $900–1000 billion in 2024, is expected to double by 2033. Yet, Kashmir’s contribution remains modest, with annual foreign exchange earnings from handicrafts pegged at ₹1,700 crores. This figure pales in comparison to the potential of the industry, which could thrive with proper support.
The GST Bombshell: Misguided Policy?
The proposed GST increase has been met with outrage from artisans, traders, and economists alike. Categorizing Kashmiri shawls as “luxury goods” ignores their cultural and economic significance. Unlike imported luxury items, which often involve significant foreign exchange outflows, Kashmiri shawls are rooted in local craftsmanship and materials.
The tax hike could have devastating consequences for the industry. As a discretionary purchase, the demand for shawls is highly price-sensitive. Even a marginal increase in costs could deter buyers, particularly in competitive international markets where Kashmiri shawls already face stiff competition from cheaper, machine-made alternatives.
Additionally, the burden of reduced demand would ripple across the entire value chain, from raw material suppliers to small-scale weavers and embroiderers. Artisans, already grappling with declining incomes and limited market access, could see their livelihoods further eroded.
Comparisons with Global Markets
While India struggles to support its cultural industries, competitors like China and Vietnam have recognized their potential as pillars of economic growth and soft power. China, for instance, has invested heavily in promoting its cultural exports through government subsidies, marketing campaigns, and trade agreements.
Kashmiri handicrafts, with their emphasis on sustainability and authenticity, are ideally positioned to cater to the growing global demand for eco-friendly and culturally significant products. However, instead of capitalizing on these opportunities, the Indian government appears intent on taxing its artisans into irrelevance.
A Lack of Vision in Policy-Making
The proposed GST hike is symptomatic of a broader policy deficit. For decades, the handicrafts sector has been neglected, with little effort to modernize infrastructure, streamline supply chains, or promote Brand Kashmir in international markets.
Experts argue that what the industry needs is not punitive taxation but comprehensive support. This includes fiscal incentives, skill development programs, and investment in marketing and branding. The Jammu and Kashmir government has proposed bringing all handicrafts under a uniform GST rate of 5%, highlighting the sector’s labor-intensive nature and cultural importance.
The Way Forward
If the Kashmiri shawl is to retain its place as a global icon of heritage and craftsmanship, urgent action is required. Policymakers must recognize the sector’s dual role as an economic driver and a custodian of culture.
First, the government should lobby for international recognition of Kashmiri shawls as a cultural industry, securing intellectual property rights and preferential trade agreements. Second, targeted investments in artisan welfare, market access, and digital infrastructure could help bridge the gap between local producers and global buyers.
Finally, introducing a uniform and lower GST rate for all handicrafts would ease the financial burden on artisans and promote competitiveness.
Conclusion: A Cultural Legacy at Risk
The Kashmiri shawl is more than a product; it is a symbol of heritage, resilience, and identity. By taxing it at exorbitant rates, policymakers risk dismantling an industry that sustains thousands of livelihoods and enriches India’s cultural narrative.
As the global handicrafts market hurtles toward unprecedented growth, Kashmir stands at a crossroads. With the right policies, the region could emerge as a global leader in artisanal products. Without them, it risks becoming a cautionary tale of missed opportunities and shortsighted governance.
(Note: The writer is corporate person with 28yrs of experience across the Globe.he could be reached @ noouralizehgeer@gmail.com)
Blurb
Kashmiri shawls, iconic symbols of heritage and craftsmanship, face an existential threat as policymakers propose taxing them at the highest GST slab of 28%—a rate usually reserved for luxury items and sin goods. This move not only undervalues the sector’s cultural and economic significance but also risks crippling the livelihoods of over 3 lakh artisans in the Valley. As the global handicrafts market booms, India must shift its approach from punitive taxation to policies that empower artisans, promote Brand Kashmir, and safeguard this cultural legacy.
