GST Cut Boosts Ice-Cream Market, Organised Players See Surge in Demand

Last updated: 30 September 2025

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Quick Summary

The Indian ice-cream market is experiencing a significant boost following a reduction in the Goods and Services Tax (GST) rate from 18% to 5%. This change has made ice creams more affordable, encouraging consumers to shift towards organised brands and driving growth for both established and new companies. Industry experts anticipate this will lead to substantial annual growth, with major players like Amul, HUL, and Mother Dairy already investing in new plants and product innovation to meet the increasing demand.

The recent Goods and Services Tax (GST) rate rationalisation has significantly benefited India's ice-cream industry, creating growth opportunities for both existing and new players. The GST rate for ice-creams has been slashed from 18% to 5%, making products more affordable and accelerating the shift from unorganised to organised segments in the Rs 30,000 crore domestic market. Currently, the organised segment accounts for roughly half of the market, according to industry experts.

Tax-led growth and market dynamics

Analysts and industry players expect the GST cut to drive at least 10-15% annual incremental growth. The organised ice-cream market, valued at around Rs 15,000 crore, has been expanding at a rate of 10-12% per year in recent years. While ice-cream consumption peaks during summer, companies are innovating with smaller and family packs to boost sales during non-peak months. Distribution through offline and online channels, including quick commerce, has also strengthened.

GST Cut Fuels Ice-Cream Demand: Organised Players See Surge

Expansion plans by market leaders

Gujarat Co-operative Milk Marketing Federation (GCMMF), known for its Amul brand, plans to set up 2-3 new ice-cream plants over the next few years as part of its Rs 10,000-crore investment in dairy and food processing. This expansion will improve reach in tier-2 and tier-3 cities. Currently, GCMMF operates 29-30 ice-cream plants with a retail reach of over one million outlets, covering roughly half of India's ice-cream retail network. Amul holds an estimated 35% volume share, followed by Hindustan Unilever (HUL) at 15% and Vadilal at 12%.

HUL, which is demerging its ice-cream business into Kwality Wall's India by FY26, plans to launch affordable dairy treats and premium offerings during festive seasons, while improving rural distribution. Mother Dairy is also expanding capacity and innovating new products at its Delhi innovation centre, with current annual revenue in ice-creams estimated at ₹500-600 crore and year-on-year capacity growth of 10-15%.

Outlook

Industry insiders say the GST-driven affordability will spur further innovation, enhance consumption, and accelerate growth in India's organised ice-cream market. Companies are gearing up to meet rising demand, expand their reach, and improve product variety for consumers across urban and rural markets.

FAQ :

The GST rate for ice-creams has been reduced from 18% to 5%.

The GST cut is making ice-creams more affordable, accelerating the shift from unorganised to organised players and driving incremental growth.

Gujarat Co-operative Milk Marketing Federation (GCMMF) plans new plants, Hindustan Unilever (HUL) is demerging its business and launching new products, and Mother Dairy is expanding capacity and innovating.

Analysts and industry players expect at least 10-15% annual incremental growth due to the GST cut.

Companies are innovating with smaller and family packs, strengthening distribution through offline and online channels (including quick commerce), and expanding reach into tier-2 and tier-3 cities.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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