Explained: Why Is The WHO’s Nutritional Tax Proposal Stirring Debate In India?

by Mallika Khurana
Explained: Why Is The WHO’s Nutritional Tax Proposal Stirring Debate In India?

In a world where our food choices are increasingly under the microscope, a recent report from the World Health Organisation (WHO) has ignited a fiery debate within India’s culinary landscape. The report, titled ‘The Growth of Ultra-Processed Foods in India: An Analysis of Trends,’ has proposed a rather unconventional idea that has left many scratching their heads. This intriguing proposal revolves around the implementation of a taxation system based on nutritional content. It’s a suggestion that goes far beyond traditional tax policies and has sparked a whirlwind of questions and controversies.

The Motivation Behind WHO’s Nutritional Taxation Proposal In India

Photo Credits: Canva

The Indian Sellers Collective has expressed its reservations regarding a recent report from the World Health Organisation (WHO). This report has sparked curiosity and concern because of its recommendations, which involve implementing a taxation system based on nutritional content. This proposed tax policy is quite different from the current one and has raised questions about its rationale. As per the PTI reports via Live Mint, The WHO report suggests raising taxes on non-packaged and unlabeled foods.

Currently, these items are subject to a 5% tax under the Goods and Services Tax (GST) regime in India.  Additionally, the report suggests various other measures, such as imposing marketing restrictions at the point of sale, limiting freebies and discounts provided by small grocers or Kirana stores, and imposing stricter regulations on the unorganised food manufacturing sector. These recommendations prompt further queries about the reasoning behind these stringent regulatory measures.

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The Objectives For Stringent Regulatory Measures

Nutrition-based Tax
Photo Credits: Canva

Furthermore, the report recommends reclassifying zero-sugar carbonated drinks into a different GST category from regular carbonated beverages, which are currently taxed at a higher rate of 40%.  In response to these recommendations, the Indian Sellers Collective has voiced concerns that the report may have broader implications for the Indian food industry beyond just health considerations.

As per PTI reports via Live Mint, they argue that the report appears to favour multinational corporations and could potentially have a negative impact on traditional Indian foods.

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It’s important to note that in July 2023, the International Agency for Research on Cancer (IARC), WHO, and the Food and Agriculture Organisation (FAO) Joint Expert Committee on Food Additives (JECFA) released a report classifying aspartame, one of the world’s most common artificial sweeteners, as possibly carcinogenic to humans. 

These proposed changes have become a subject of scrutiny and speculation. It has left stakeholders in the Indian food sector seeking a clearer understanding of the motivations driving these recommendations.

Cover Image Courtesy: Canva