India’s isabgol (psyllium) industry, a key player in the global dietary fibre market, is headed for potential disruption as processors have threatened to halt seed procurement from October 6 due to unresolved Goods and Services Tax (GST) complications.
The All India Isabgol Processors Association (IPA), which represents exporters and manufacturers, said the sector is under severe financial stress because of ambiguity in GST rules that have resulted in capital being locked with tax authorities for more than a year. The industry has urged the government to abolish GST on isabgol seeds to ease liquidity pressures.
India exports psyllium husk worth over Rs 3,500 crore annually, with the United States accounting for nearly 60–70% of total shipments. However, exporters report that the ongoing GST issues, compounded by a slowdown in global orders and lingering tariff barriers introduced during the Trump administration, have significantly dampened business sentiment.
Before the GST regime replaced Value Added Tax (VAT) in 2017, isabgol enjoyed tax-exempt status. Under the current structure, fresh isabgol remains exempt, whereas dried seeds attract a 5% GST. However, the absence of a clear definition of “fresh” forces processors to pay GST on most purchases to avoid compliance disputes. Although refunds are eventually granted, they often take months, tying up crucial working capital.
According to industry representatives, a halt in seed procurement would have a cascading effect across the entire supply chain — from farmers to exporters fulfilling international orders. Rajasthan accounts for nearly 70% of India’s isabgol production, while Gujarat, particularly the Unjha region, serves as the processing and trading hub.
Adding to the challenges, demand from key markets such as the US and Europe has slowed, with buyers delaying or canceling orders, further straining the sector’s liquidity.
Isabgol-derived psyllium husk is widely used as a natural laxative, food thickener, and dietary fibre supplement. With rising global interest in plant-based and natural health products, demand for psyllium remains strong. However, industry stakeholders warn that unresolved tax uncertainties could jeopardize India’s dominant position in this niche export segment.
The IPA has called on the government to urgently resolve GST-related ambiguities, cautioning that inaction could disrupt processing operations, hurt export revenues, and impose serious financial hardship on thousands of farmers.