India's processed food industry has welcomed the recent GST 2.0 reforms, saying that the tax cuts will directly benefit consumers and drive higher consumption in the coming months. Speaking on the sidelines of the World Food India 2025 programme in New Delhi, leading companies including Mother Dairy, Allana Group, Mr Makhana, Marico and NAFED confirmed that they will pass on the benefits of reduced GST rates.
Passing on GST Benefits to Consumers
A senior executive from Mother Dairy said that the reforms would reduce supply chain costs and ease working capital pressure. "We have announced price cuts on almost all our products, consumption is poised to grow in the coming months without a doubt," the executive said.
At Allana Group, the CEO of its Processed Foods Division highlighted that categories such as pet food, fruit-based products and ice creams have already seen price reductions. "In principle, we've agreed to pass on the rate cut benefits to consumers," he said.
Some manufacturers are opting for increasing product grammage instead of price cuts, particularly in cases where consumer preference for fixed price points (Rs 5, Rs 10, Rs 20) makes further reductions unviable. "Either way, consumers benefit - whether through lower MRPs or larger pack sizes," said Muley of Allana Group.
Mr Makhana, which sells flavoured makhana snacks in India and 13 other countries, confirmed this approach. "We have increased pack sizes to reflect GST cuts. Our 20g and 60g packs are now 22g and 64g at the same price," a company executive said, expecting higher sales volumes in return.
GST 2.0 Brings Relief to Households
Effective September 22, 2025, nearly 300 processed food items were shifted from the 12% and 18% GST slabs to 0% and 5%. Prime Minister Narendra Modi, while addressing the WFI event, said the reforms will ease consumer expenses and benefit both farmers and producers.
Industry leaders agree. Marico's MD & CEO noted that the GST cuts make essential goods cheaper, boosting sentiment in the festive season. "These reforms will stimulate economic momentum and support long-term growth in the FMCG sector," he said.
The Joint MD of NAFED added that this time the government is "very much focused" on ensuring full pass-through to consumers. "There is constant communication between the government and companies to monitor implementation," he said.
Export Outlook: Processed Foods Eye Global Markets
Beyond domestic demand, processed food manufacturers are betting on rising export opportunities. Allana Group plans to expand beyond its existing footprint in 90 countries, particularly in the United States, with new product categories.
Mother Dairy is preparing to expand exports of dairy products to Russia and the US, driven by strong diaspora demand. "We are already present in 40 countries. Going forward, dairy products, fruits, vegetables and edible oils will see rising global demand," the company said.
A Win-Win for Consumers and Industry
Industry experts believe that GST 2.0 has created a win-win scenario, where consumers save money, businesses increase sales, and exports are poised for expansion. With essentials now falling in the 0% and 5% GST slabs, the processed food industry expects to sustain growth momentum well into 2026.
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