India may soon take a far tougher fiscal stance against junk food. The Economic Survey 2025-26 has called for moving ultra-processed foods (UPFs) into the highest GST slabs and imposing additional surcharges on products high in sugar, salt and unhealthy fats, warning that childhood obesity is emerging as a serious public health crisis.
The recommendations mark one of the strongest policy signals yet that India could follow countries like Chile, Norway and the UK in using taxation, advertising curbs and warning labels to change food consumption behaviour.
Childhood obesity rising at an alarming pace
The Survey flags a sharp rise in childhood obesity, with prevalence among children under five increasing from 2.1% in 2015-16 to 3.4% in recent years. In absolute terms, the number of obese children in India is projected to surge from 3.3 crore in 2020 to 8.3 crore by 2035.
Obesity is no longer confined to urban India. The Survey stresses that rural and semi-urban areas are increasingly affected, driven by sedentary lifestyles and easy access to cheap, calorie-dense foods.
Ultra-processed foods: a booming market, rising health costs
India has become one of the fastest-growing markets for ultra-processed foods globally. Sales of UPFs, such as soft drinks, packaged snacks, chocolates, instant soups, nuggets and sweetened cereals, expanded by more than 150% between 2009 and 2023.
Retail sales jumped nearly 40-fold, from $0.9 billion in 2006 to almost $38 billion in 2019, according to WHO data cited in the Survey. Over the same period, obesity rates among both men and women nearly doubled, underlining a direct link between consumption patterns and health outcomes.
What the Survey proposes
The Economic Survey 2026 outlines a multi-pronged approach:
- Higher GST slabs and additional levies on ultra-processed foods high in sugar, salt and fat
- A marketing ban on UPFs between 6 am and 11 pm across all media platforms
- Front-of-pack warning labels instead of star ratings, which studies show are less effective
- Restrictions on school and college sponsorships by UPF manufacturers
- Ring-fencing tax revenues from junk food for public health spending, including school meals and prevention programmes for non-communicable diseases
The Survey also recommends stricter enforcement of advertising rules, noting that aggressive tactics such as celebrity endorsements, “buy one get one free” offers and misleading health claims have displaced whole foods from Indian diets, especially among children and adolescents.
Experts back stronger action
Public health experts broadly support the proposals. Dr K Srinath Reddy, former president of the Public Health Foundation of India, called the recommendations “timely,” warning that obesity-linked cardio-metabolic diseases are rising rapidly even among people who do not meet traditional obesity thresholds.
Former WHO chief scientist Dr Soumya Swaminathan said ultra-processed foods are spreading rapidly because they are convenient, cheap and aggressively marketed. She argued for colour-coded warning labels, public awareness campaigns similar to those used for tobacco, and incentives for companies to produce affordable, nutritious ready-to-eat foods.
A contrast: major gains in child survival
Even as obesity rises, the Survey highlights a major public health success. India’s infant mortality rate has fallen by over 37% since 2013, dropping from 40 to 25 deaths per 1,000 live births by 2023. States such as Kerala, Goa and Sikkim now report single-digit IMRs, comparable to developed countries.
However, the Survey cautions that inequalities persist, particularly in tribal areas and among SC/ST populations, calling for stronger primary healthcare and targeted interventions.
The bigger picture
The Economic Survey’s message is clear: without decisive fiscal and regulatory action, the health costs of ultra-processed foods could undermine India’s demographic dividend. Higher GST on junk food, stricter advertising rules and clear warning labels are being positioned not as revenue tools, but as investments in long-term productivity and public health.
Source: LiveMint