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Economic Survey 2026 calls for ultra-processed foods to be moved to the highest GST slab
Report proposes additional surcharges on products high in sugar, salt and fat
Survey backs front-of-pack warning labels, saying star ratings dilute health risks
Rising obesity and a sharp surge in UPF consumption cited as key concerns
The Economic Survey 2025-26, tabled in Parliament on January 29, 2026, has called for moving ultra-processed foods (UPF) into the highest Goods and Services Tax (GST) slabs and imposing an additional surcharge on products that exceed prescribed thresholds for sugar, salt and fat.
The survey has also recommended replacing the existing health star rating system on packaged foods with prominent front-of-pack warning labels.
Public health bodies such as Nutrition Advocacy of India (NAPi) and several nutrition experts have been advocating this shift for years, arguing that ranking-style labels dilute health risks and can mislead consumers, whereas clear warning labels are more effective in discouraging unhealthy food consumption.
The survey noted that, in a rare show of multi-sector agreement, 29 organisations had issued a joint statement urging the government to adopt warning labels instead of ranking-style systems.
These recommendations come at a time when obesity is rising sharply in India, a trend that the Survey said closely mirrors the explosive growth of UPF consumption over the past two decades. The survey highlighted the scale of the problem.
According to the 2019-21 National Family Health Survey (NFHS), 24 per cent of Indian women and 23 per cent of Indian men were overweight or obese. Among women aged 15-49 years, 6.4 per cent were obese, compared with 4 per cent of men.
The rise among children is even more troubling. The prevalence of excess weight among children under five increased to 3.4 per cent in 2019-21 from 2.1 per cent in 2015-16. Estimates suggest that more than 33 million children in India were obese in 2020, a figure projected to rise to 83 million by 2035.
Over the same period, retail sales of UPFs in India surged nearly 40-fold, from $0.9 billion in 2006 to almost $38 billion in 2019.
In October 2025, Down To Earth reported on the growing addictive nature of UPFs, and how companies design these products with precise combinations of sugar, salt, and fat that stimulate the brain’s reward system, encouraging repeated consumption and loss of control.
The survey also flagged the role of aggressive marketing in driving UPF consumption, particularly among children and adolescents. It suggested that the option of banning UPF marketing between 6 am and 11 pm across all media platforms could be explored, along with stricter enforcement of restrictions on the promotion of infant and toddler milk and beverages.
Countries such as Chile, Norway and the United Kingdom were cited as examples where integrated food laws and advertising curbs have been implemented. Recently, the UK banned junk food advertisements before 9 pm on television and online platforms to reduce children’s exposure and curb childhood obesity.
The survey said similar restrictions in India, including on digital media and the sponsorship of school and college events by UPF manufacturers, could form part of a comprehensive regulatory framework.
However, even as the government flags concerns about rising obesity, it has also been seen partnering with UPF manufacturers such as soft drink major Coca-Cola and Mondelez, the maker of several candies, biscuits, chips, chocolates and snacks, for event partnerships.
UPFs, as defined by the Nova food classification system, are industrially formulated products made from cheap food-derived substances and additives. They are designed and marketed to displace freshly prepared meals, with the primary objective of maximising industry profits.
The United Nations Food and Agriculture Organization (FAO) offers an 11-paragraph definition of UPFs, — possibly one of the longest — which highlights the use of food substances of no or rare culinary use are employed in UPF manufacturing, like varieties of sugar (fructose, high-fructose corn syrup, “fruit juice concentrates”, invert sugar, maltodextrin), modified oils (hydrogenated or interesterified oils), hydrolysed proteins, soya protein isolate, gluten, casein, whey protein and “mechanically separated meat”.
Put simply, UPFs rely on high quantities of sugar, salt and fats, combined with artificial additives and carefully calibrated ratios that make them highly palatable and encourage repeat consumption.
A three-part series in the journal Lancet published in November 2025 found that UPFs were displacing long-established dietary patterns, worsening diet quality and increasing the risk of multiple chronic diseases.
The series also documented how, over the past 50 years, large UPF corporations have steadily gained influence over global food and health policies. From just one voluntary action or a multi-stakeholder initiative with a potential to influence policy making in 1974, the number has grown to 45 by 2023, with more than half established or led by UPF corporations or their affiliated groups.
Extensive research has linked the overconsumption of foods such as chips, biscuits, namkeens, carbonated soft drinks, breakfast cereals, artificially sweetened yoghurt and ice creams to obesity, type 2 diabetes, high blood pressure, heart, kidney and gastrointestinal diseases, as well as premature deaths from all causes.