New Delhi – India’s Economic Survey 2025-26, tabled in Parliament on Thursday, January 29, 2026, by Finance Minister Nirmala Sitharaman, strongly recommends imposing higher Goods and Services Tax (GST) on ultra-processed foods (UPFs). The survey also suggests additional surcharges on products high in sugar, salt, and fat. This aggressive fiscal measure aims to combat the nation's rapidly escalating public health crisis, driven largely by rising obesity rates.
India's Worsening Health Crisis
The Economic Survey paints a stark picture of India's health landscape. It highlights a troubling surge in obesity across all age groups. Data from the National Family Health Survey (NFHS) 2019-21 shows that 24 percent of Indian women and 23 percent of men aged 15-49 are now overweight or obese. Thesituation among children is particularly alarming. The prevalence of excess weight in children under five years old increased from 2.1 percent in 2015-16 to 3.4 percent in 2019-21. Estimates reveal that 3.3 crore (33 million) children were obese in 2020, a figure projected to more than double to 8.3 crore (83 million) by 2035 if current trends continue.[thelogicalindian+13]
The survey directly links this rise in obesity to the booming consumption of ultra-processed foods. These products, which include items like soft drinks, packaged potato wafers, chocolates, instant noodles, and sweetened breakfast cereals, are typically low in nutrients but high in sugar, salt, and unhealthy fats. India has emerged as one of the world's fastest-growing markets for UPF sales, which expanded by over 150 percent between 2009 and 2023. Retail sales of UPFs skyrocketed from $0.9 billion in 2006 to nearly $38 billion in 2019, marking a forty-fold increase. During this same period, obesity rates nearly doubled among both men and women.[livemint+29]
Proposed Tax and Regulatory Measures
The Economic Survey 2025-26 calls for aggressive fiscal interventions. It proposes moving ultra-processed foods into the highest GST tax slabs. Additionally, it recommends imposing further surcharges on products that exceed specific thresholds for sugar, salt, and fat content. This "nutrient-based tax" aims to discourage consumption of these unhealthy items and generate revenue that could support public health initiatives.[livemint+2]
Beyond taxation, the survey suggests a comprehensive regulatory overhaul. It advocates for a potential marketing ban on ultra-processed foods from 6 am to 11 pm across all media platforms, including digital. Thereport also urges mandatory "front-of-pack" warning labels for high-fat, sugar, and salt (HFSS) foods. Studies show these clear warnings are more effective at discouraging consumers than complex star rating systems. Furthermore, the survey recommends restricting the marketing of infant and toddler milk and beverages, and prohibiting nutrient and health claims on UPF packaging to prevent misleading "health halo" effects.[thehindu+10]
Economic Burden and Public Health Priority
The rising consumption of UPFs and the resulting obesity crisis are not just health concerns; they pose a significant economic threat to India. The Economic Survey highlights that these trends worsen overall diet quality and are strongly linked to higher risks of non-communicable diseases (NCDs) such as cardiovascular ailments, diabetes, respiratory problems, and even mental health disorders. Thesurvey warns that the increasing use of UPFs imposes a substantial economic cost through higher healthcare spending, lost productivity, and long-term fiscal strain on the nation.[upstox+5]
The survey treats dietary reforms as a national public health priority, placing it on par with other strategies for preventing NCDs. Chief Economic Advisor Dr. V. Anantha Nageswaran emphasized that Indian obesity is a major issue for reaping the demographic dividend. He stated that food labels should clearly reflect the risks of what people consume, enabling informed choices. Thesurvey also calls upon the Food Safety and Standards Authority of India (FSSAI) to define and regulate ultra-processed foods by integrating them into existing frameworks.[ddnews+6]
Global Examples and Future Steps
Several countries have already implemented similar measures to curb UPF consumption. The survey cites examples from Chile, Norway, and the United Kingdom, where advertisement restrictions are in place for ultra-processed foods. TheUK, for instance, banned junk food advertising before 9 pm on TV and online to reduce children's exposure and combat childhood obesity.[m]
The Economic Survey acknowledges existing policy gaps in India, such as the subjective definition of "misleading" in the Advertisement Code and a lack of clear nutrient thresholds in Central Consumer Protection Authority (CCPA) guidelines. It stresses the need for stronger enforcement of regulations and for raising public awareness through targeted campaigns in schools and colleges. Thesurvey also advocates for promoting domestically grown food, traditional diets, and indigenous cooking practices, alongside leveraging social media and influencers to spread messages about healthy nutrition and lifestyles.[m+5]
