India's high tax curbing soft drinks segment reach potential: ICRIER report

Carbonated soft drinks segment in India is unable to reach its potential in terms of scale expansion due to barriers such as high taxation under the GST regime despite government's initiatives like 'Make in India' and 'Aatmanirbhar Bharat', according to a report by economic think tank ICRIER.

The cross-country comparative data on sugar-sweetened beverages (SSB) taxes collated by the World Bank shows that India has one of the highest tax rates for carbonated soft drinks (CSDs) at a total tax rate of 40 per cent as of 2023.

Over 90 per cent of countries that tax SSBs have a lower tax rate than India, as per the report titled 'Carbonated Beverages Industry in India: Tax Policy to Promote Growth, Innovation and Investment'.

Consumers, globally and in India, are shifting towards low-sugar and no-added sugar varieties of beverages amid heightened health awareness.

"The CSD market is also changing from its traditional high sugar carbonated beverages to low-sugar and fruit-based and/or ...