Economic Survey 2025 calls for ‘health tax’ on ultra-processed foods

The survey also said that the government must contemplate stricter FSSAI labelling norms, higher GST, and awareness campaigns

The Economic Survey 2025-26, tabled by Finance Minister Nirmala Sitharaman on Friday, recommended the imposition of a 'health tax' on ultra-processed foods (UPFs) to curb their consumption amid growing health concerns.

Economic Survey 2025: Ultra-processed foods are food items usually categorised by high-calorie content

"A higher tax rate for UPFs may also be considered a 'health tax' measure targeted specifically at brands/products that advertise," it said.

The pre-budget document also said that the government must contemplate stricter Food Safety and Standards Authority of India (FSSAI) labelling norms, higher GST, and awareness campaigns to curb the consumption of such food items.

"A multi-pronged approach would be required to address the concerns emerging from the increased inclusion of UPFs in diets in India," it said.

The UPF industry is a massive industry worth ₹2,500 billion in 2021, a report by news agency ANI cited the survey as saying.

What are Ultra Processed Foods?

Ultra-processed foods are food items usually categorised by high-calorie content, excessive sugar, unhealthy fats, and minimal nutritional value. Some of such food items include soft drinks, packaged snacks, chocolates, sweetened cereals, and frozen foods like nuggets and fries.

These products, often marketed as "convenient" and “tasty,” offer little more than empty calories while contributing to rising rates of chronic diseases across India.

Economic Survey 2025 also calls for marketing regulations

In addition to the health tax, the Economic Survey called for a need to put in place stricter measures to tackle the deceptive marketing of ultra-processed foods.

Notably, products like breakfast cereals, packaged juices, and chocolate drinks are often marketed as healthy, despite their high sugar and fat content.

The survey recommends amending consumer protection laws to penalize misleading advertisements and urges that UPFs be banned from schools, hospitals, and other public spaces.

"Misleading nutrition claims and information on UPFs need to be tackled and should be brought under the scanner," it said.

There is a need to generate greater awareness around the adverse impact of the consumption of UPFs through campaigns targeted at schools and colleges alongside existing health and lifestyle campaigns of the governments, the survey said.