Reduction in Tax on Artificial Milk and Meat Products in India to Boost Affordability of Vegan Diets
India is set to encourage the growth of the plant-based food sector with the implementation of tax reforms, effective September 22, 2023. The Goods and Services Tax (GST) Council has approved these reforms, aiming to enhance the quality of life of every citizen.
Under the new regulations, vegan meat and milk alternatives will be taxed the same way as packaged animal meat and milk beverages. This includes beverages containing milk, butter, ghee, dairy spreads, cheese, sausages, preserved meat, and seafood, all of which will be taxed at 5%.
The Indian Ministry of Finance's commitment to tax reforms is a progressive move, according to Praveer Srivastava, executive director of the Plant Based Foods Industry Association. Abhay Rangan, chief business officer at Senara and former CEO of plant-based dairy brand One Good, also supports these reforms.
The reduction in GST rates for plant-based foods is expected to increase their accessibility, addressing one of the biggest barriers to their consumption in India – affordability. The market for vegan food in India is projected to expand 18-fold in the next decade, reflecting a growing demand for plant-based options.
Protein content and health are the most influential drivers of plant-based food consumption in India. Interestingly, more Indians want to increase their intake of vegan meat analogues than conventional meat. This shift towards plant-based diets is not unique to India, as some European countries have already introduced tax parity for plant-based products, with industry stakeholders continuing to campaign for the same in many others.
The GST reforms apply to a wide range of products across industries like food, cosmetics, homeware, electronics, medicines, and transportation. Even inactive yeast and single-cell microorganisms have seen their GST rates lowered from 12% to 5%.
It's worth noting that government subsidies have historically supported livestock agriculture disproportionately across the world. However, with these tax reforms, the Indian government is taking a significant step towards levelling the playing field for plant-based alternatives.
Recently, the Advertising Standards Council of India struck down three petitions against dairy giants, indicating a shift in the regulatory landscape that may further support the growth of the plant-based food sector in India. As the country moves towards a more sustainable future, these GST reforms are a significant step in promoting plant-based consumption and encouraging a healthier, more environmentally friendly lifestyle.
