Tax Hurdles Stifle Growth of India's Carbonated Soft Drinks Industry

A report by ICRIER highlights the struggles of India's carbonated soft drinks segment due to high GST taxes, despite initiatives like 'Make in India'. India's 40% tax rate on these beverages is among the highest globally, hindering innovation and growth in this industry.

India's carbonated soft drinks sector faces growth constraints, attributed largely to tax barriers, according to a report by ICRIER. Despite governmental efforts like 'Make in India', high taxation under the GST regime hampers the industry's potential scale expansion.

The report notes that India imposes a total tax rate of 40% on carbonated soft drinks, one of the highest rates globally, as per World Bank's cross-country comparative data. More than 90% of countries with sugar-sweetened beverage taxes levy lower rates than India does.

While Indian consumers favor low or no-sugar options, and producers adapt accordingly, industry growth remains stifled. The report underscores the need for conducive policies to foster investment, innovation, and job creation within the carbonated beverages sector.