GST 2.0 impact on food prices India: Obesity rates have tripled in the past four decades (1975-2016). More than 1.9 billion adults worldwide are overweight, while 650 million of them are obese, as per WHO Global Health Observatory data 2016 data.
To encourage healthier habits among people, the Indian government, in its latest GST framework, has raised taxes on sin goods like tobacco, gutka, pan masala, alcoholic, and sugary beverages, to 40%. However, several ultra-processed foods like packaged namkeens, Bhujia, sauces, pasta, instant noodles, preserved meat, and cornflakes, could now become cheaper after reduction of GST from 12% or 18% to 5% on them.
Risks of ultra-processed foods
High in refined carbs, trans fats, sugar, sodium, and other preservatives, ultra-processed foods pose a grave health risk to people. According to a study published in BMJ journal, increasing consumption of ultra-processed foods by 10% was associated with a 10% increase in the risks of cardiovascular disease, coronary heart disease, and cerebrovascular disorders. Eating highly processed foods can lead to weight gain or obesity linked to many kinds of cancer. Another BMJ journal study says four servings of processed food daily was linked with a raised risk of all-cause mortality. Each additional serving raises this risk further to 18%.
What is GST 2.0 and when will it come into effect
The significant GST overhaul will be applicable from September 22. Instead of the existing four slabs, the new framework will have a two-rate system of 5% and 18%. While essential goods will be taxed at 5%, sin and luxury goods will come under the 18% bracket.
What experts think about pasta, noodles, namkeen becoming cheaper
“As pasta, noodles, biscuits and namkeens get cheaper under GST 2.0, there’s an uncomfortable irony at play: the very foods most linked with obesity and metabolic disease may now become even more accessible. Ultra-processed foods are engineered to be tasty and convenient, but they are calorie-dense and nutrient-poor, fueling weight gain, fatty liver and early-onset diabetes,” Dr. Sukrit Singh Sethi, Senior Consultant – Gastroenterology, Narayana Hospital, Gurugram told Financial Express.com.
“India is already in the middle of a silent obesity epidemic, especially among young people in cities. Making junk food cheaper risks accelerating that curve. The government’s intent may be economic, but the health consequences are inevitable unless we find a way to promote healthier alternatives with the same urgency. Otherwise, today’s cheaper biscuits and pastries could translate into tomorrow’s soaring healthcare costs,” adds Dr Sethi.
‘A welcome reform, but steps needed to check junk food consumption’
“As a dietician, I see both positives and risks in India’s new GST 2.0 reforms. The government has cut or waived taxes on staples and essential groceries, which is good because it makes healthy home-cooked food more affordable for families. But at the same time, when food prices fall overall, people also tend to buy more processed and ready-to-eat junk foods, and this can add to India’s rising concern on obesity and non-communicable diseases such as diabetes, heart disease, stroke and so on,” Edwina Raj, Head of Services – Clinical Nutrition & Dietetics, Aster CMI Hospital, Bangalore told Financial Express.com
“We know that as per recent data on obesity in India between 2015-16 and 2019-21, obesity increased to nearly 24% in women and 23% in men. Fast food is no longer just an urban trend; it is spreading in smaller towns and even rural areas because it is cheap, convenient, and heavily marketed. Now a drop in GST on packaged namkeen and ultra-processed food consumption would increase in all age groups as a convenient option,” adds Raj.
“That is why health experts, including the Indian Council of Medical Research (ICMR), suggest that the government should balance GST relief on essentials with higher taxes on high-fat, sugar, and salty foods, which we call HFSS foods. Evidence supports this. For example, Kerala once introduced a “fat tax” on burgers, pizzas, and other branded junk foods, and within a short period, fast-food consumption dropped by 4–5 percentage points,” adds the expert.
“GST 2.0 is a welcome reform for affordable essentials, but without parallel steps to check junk food consumption, it risks fueling India’s obesity crisis,” says Raj.
“While lowering taxes on essential kitchen staples (like dairy and roti) may support nutritional adequacy, reducing GST on calorie-dense, ultra-processed items (like biscuits, chocolates, and snacks) could raise concerns from a public health standpoint. Cheaper ultra-processed foods (UPFs), which are often high in salt, sugar, and unhealthy fats, might encourage overconsumption—a well-known contributor to rising obesity and noncommunicable diseases (NCDs) in India,” says Dietitian Sakshi Lalwani.
“The current GST reform may indeed lighten grocery bills for many households—especially for staples and essential items. But broad tax reductions on processed snacks risk fueling excess consumption, pushing weight gain and related health risks,” adds Lalwani.
“As a pediatrician, I call on policymakers to be joined in GST reforms with a category-based health tax on junk foods, clearer labelling standards, nutrition education programs, and healthy alternatives accessible to everyone. Anything less and India will only be marking economic boom and the ill-health of its most vulnerable citizens,” says Dr Vivek Jain, Senior Director & Unit Head, Paediatrics, Fortis Hospital, Shalimar Bagh, New Delhi.
Who is considered obese?
According to the WHO, obesity is a chronic complex disease defined by excessive fat deposits that can impair health. The condition raises the risk of type 2 diabetes and heart disease, and can also affect bone health and reproduction. It also puts one at risk of certain cancers. Obesity influences the quality of living, such as sleeping or moving.
People with BMI greater than or equal to 25 are categorised as overweight, while those with BMI above or equal to 30 are considered obese.