Surge in consumption of ultra-processed foods in India poses health crisis; Economic Survey makes suggestions to tackle it.
Published Feb 05, 2025 | 7:00 AM ⚊ Updated Feb 05, 2025 | 7:00 AM
Ultra Processed Foods.
Synopsis: Economic Survey proposes a ‘health tax’ on ultra-processed foods that would be specifically targeted at brands that advertise their products aggressively. Sweetened breakfast cereals, juices etc that heighten risk of diabetes, obesity and non-communicable disease could be taxed at higher rate to mop up resources for healthcare provisioning and discourage consumption of foods that are low-fibre and high in unhealthy fats, colouring agents and additives.
Through strategic marketing, the food industry seduces consumers. Brand loyalty is maintained through advertising and positive reinforcement, so consumers keep purchasing products without fully understanding the true nature of the food they consume.
Increased consumption of unhealthy food products are directly linked to obesity, diabetes, and other non-communicable diseases (NCDs), according to Nutrition Advocacy in Public Interest (NAPi), a national think tank.
Recognising the profound impact of advertising on ultra-processed food (UPF) consumption, policymakers are intensifying their focus on the role of UPFs in deteriorating public health.
The Economic Survey 2024-25 has proposed a higher tax on ultra-processed foods, naming it ‘Health Tax’. This tax would be imposed specifically by targeting brands and products that actively advertise these items.
The UPFs include sweetened breakfast cereals, packed juices, instant noodles, chips, soft drinks, and energy drinks to fried chicken and packaged cookies.
The Economic Survey 2024-25 underscores the alarming rise in UPF consumption, linking it directly to obesity, diabetes, cardiovascular diseases, and mental health disorders.
According to the NOVA Food Classification System (a system to classify foods based on the extent of processing), developed by researchers at the University of São Paulo, includes the following categories:
UPFs are characterised by high amounts of sugar, salt, and unhealthy fats, often combined with artificial flavoring, colourants, and preservatives. These foods are hyper-palatable, long-lasting, and aggressively marketed.
Dr Arun Gupta, convenor of NAPi, explains that we can make processed food at home using real ingredients — for example, combining nuts and jaggery to make laddu or chikki.
“However, ultra-processed foods go through an entirely different process. First, the food matrix is broken down — its natural structure is stripped away. Then, sugar, salt, and other additives are introduced. This is followed by the addition of artificial flavours, colours, emulsifiers, stabilisers, and chemical agents, such as CBT (cross boundary temperature) regulators, which are not found in home kitchens or even in small-scale MSME food production. The final product is packaged and designed for long shelf life, making it far removed from traditional, minimally processed foods,” Dr Gupta told South First.
The Economic Survey suggests that convenience, hyper palatability, affordability, longer shelf life and vigorous advertising and marketing strategies have created a conducive environment for the thriving business of UPFs in India.
The Economic Survey highlights that the market for UPFs in India has expanded at a staggering pace, with a 13.7% compound annual growth rate (CAGR) between 2011 and 2021.
The trend, which briefly slowed during the pandemic, quickly rebounded, reflecting the growing consumer dependence on packaged and ready-to-eat food products.
“Though there was a YoY growth rate decline from 12.7 per cent to 5.5 per cent during 2020, the very next year, it was 11.29 per cent. According to the Household Consumption Expenditure Survey (HCES) 2022-23, 9.6% of the food budget in rural areas and 10.64% of (household consumption) in urban areas was on beverages, refreshments, and processed food,” reads the Survey.
While the affordability, convenience, and extended shelf life of UPFs have contributed to their popularity, their impact on health has been devastating.
The survey references multiple studies linking high UPF consumption to obesity and weight gain, particularly among children.
These foods, which are often fibre-deficient and calorie-dense, encourage overeating and lead to metabolic disorders such as Type-2 diabetes and hypertension.
Cardiovascular diseases, already a leading cause of mortality in India, are also strongly associated with diets rich in processed foods. Increased consumption of artificially sweetened beverages and packaged snacks has been correlated with higher blood pressure, cholesterol levels, and an increased risk of stroke.
“Being lower in fibre content, UPFs are observed to lead to weight gain and obesity in adults and children. Studies from across countries show a direct association between exposure to UPFs and 32 health parameters spanning mortality, cancer, and mental, respiratory, cardiovascular, gastrointestinal, and metabolic health outcomes,” reads the Survey.
Beyond physical health, the Economic Survey also points to the impact of UPFs on mental well-being.
Citing recent research, the report highlights that individuals who consume ultra-processed foods regularly are more likely to experience depression, anxiety, and cognitive decline.
The survey points out that despite these well-documented health risks, government regulation of ultra-processed foods remains weak.
The Food Safety and Standards Authority of India (FSSAI) introduced labelling requirements, but the voluntary nature of the “Health Star Rating” system has done little to deter consumption.
Misleading advertising remains a significant challenge, with many UPF brands positioning themselves as healthy alternatives despite their high sugar and fat content.
“Making consumers conscious about what they eat, its ingredients and associated side effects is important not only to counter the intake of UPF but also to maintain a healthy lifestyle. Understanding the ingredients of packaged food, the ill effects of UPF, and healthy food choices should be a part of the school curriculum,” reads the survey.
In response to these challenges, the report suggests the introduction of a ‘Health Tax’ on ultra-processed foods, drawing from global examples where taxation has successfully curbed consumption.
Countries like Mexico, Denmark, and the UK have implemented sugar taxes and high GST rates on unhealthy foods, leading to a measurable decline in sales.
In Mexico, for example, a 10% tax on sugary beverages resulted in a 7.6% reduction in purchases within the first two years. Denmark’s tax on saturated fats in processed foods was similarly aimed at shifting consumer behaviour towards healthier alternatives.
A similar model in India, the Economic Survey suggests, could be structured as a higher GST rate on ultra-processed foods, particularly those that contain excessive amounts of sugar, sodium, or trans-fats. This tax could serve multiple purposes: discouraging excessive consumption, creating a revenue stream for public health programmes, and incentivising food manufacturers to reformulate their products.
Define nutrient thresholds: The Ministry of Health and Family Welfare (MoHFW) should urgently establish limits for sugars, salt, and saturated fats in food products.
Regulate advertising: Stricter controls should be imposed on marketing unhealthy foods, especially those targeted at children under 18.
Adopt Front-of-Pack (FOPL) labels: Warning labels should be mandatory to inform consumers about high sugar, salt, or fat content in ultra-processed foods (UPFs).
Restrict UPFs in public spaces: Schools, hospitals, and other public areas should eliminate UPFs to promote healthier dietary habits.
Promote healthy food production: The government should offer incentives to support affordable and nutritious food production, making healthier options more accessible.
Implement a high GST on UPFs: Raising GST rates on ultra-processed foods can discourage consumption and help fund public health initiatives.
Strengthen consumer protection laws: Amendments should be made to combat misleading advertising and hold food companies accountable.
Create a coalition for public awareness: A joint effort between civil society and government, free from food industry influence, is essential to educate consumers and counter deceptive marketing practices.
“NAPi strongly urges the immediate implementation of the recommendations outlined in the Economic Survey 2024-25. Specifically, we demand the adoption of mandatory warning labels (front-of-package nutrition labeling or FOPL) on HFSS (High in Fat, Sugar, and Salt) foods to raise consumer awareness.
“There must also be stringent restrictions on advertisements for UPFs, particularly those targeting children under 18. NAPi believes this can be accomplished through an amendment to the Advertisement Code and the Norms of Journalistic Conduct 2022 to explicitly ban HFSS/UPF food ads.
“Additionally, we call for the definition of UPF/HFSS to align with the ICMR-NIN Dietary Guidelines. An independent, empowered group must be constituted to lead and monitor these actions, and adequate budget provisions should be made to support these critical measures,” Dr Arun Gupta said.
(Edited by Rosamma Thomas)
