In a bid to address rising health concerns linked to the consumption of ultra-processed foods (UPFs), the Economic Survey 2025-26, presented by Finance Minister Nirmala Sitharaman on Friday, has proposed a “health tax” on such food items. The government aims to reduce the intake of these products, which often link to chronic diseases and poor nutrition.
The survey suggests that the government should consider imposing a higher tax rate on UPFs, with the possibility of designating this as a “health tax.” This move would target specific brands and products, especially those that promote unhealthy food through advertisements. The document also emphasizes the need for a multi-faceted approach, recommending stricter labelling norms from the Food Safety and Standards Authority of India (FSSAI), higher GST rates, and increased public awareness campaigns to tackle the growing health concerns surrounding UPFs.
In 2021, the ultra-processed food industry was valued at ₹2,500 billion, reflecting its vast influence and widespread availability. These foods typically contain high amounts of sugar, unhealthy fats, and excessive calories, while offering little to no nutritional benefits. Common examples of UPFs include soft drinks, packaged snacks, chocolates, sweetened cereals, and ready-to-eat frozen meals like nuggets and fries. While marketed as convenient and tasty, these foods contribute significantly to the rise of lifestyle-related diseases such as obesity, diabetes, and heart conditions in India.
Alongside the health tax, the Economic Survey 2025 also advocates for stricter marketing regulations to combat misleading advertising of ultra-processed foods. The survey points out that marketers often promote products such as breakfast cereals, packaged juices, and chocolate drinks as healthy options, despite their high sugar and fat content. To address this, the survey recommends amending consumer protection laws to penalize deceptive marketing tactics and calls for a ban on the sale of UPFs in schools, hospitals, and other public spaces.
Furthermore, the survey stresses the importance of creating awareness about the negative health impacts of UPFs, particularly through targeted campaigns in schools and colleges. The goal is to educate the public about the dangers of consuming these foods regularly and promote healthier alternatives. Existing health and lifestyle campaigns by the government should also integrate information on the risks of UPFs, helping to drive home the importance of making informed food choices.
In conclusion, the Economic Survey 2025 underscores the urgent need for government intervention to curb the consumption of ultra-processed foods in India. By introducing a health tax, stricter labelling norms, and more effective marketing regulations, the government hopes to mitigate the growing health crisis linked to poor dietary habits and promote better overall public health.
