India’s junk food bill comes in

Country’s poor dietary patterns are causing it billions of dollars in losses

Mexico declared a ‘national epidemiological emergency’ in November 2016 after alarming excess weight and obesity among its citizens made the country the second worst affected in the Organisation for Economic Co-operation and Development (OECD) bloc of countries after the United States. Two years before that, Mexico had implemented a sugar tax and voted for warning labels on junk food in 2020 amid intense corporate opposition.
 
A recent report said companies are looking at emerging markets like India where awareness about the harm from junk food is poor and consumer protection regulations weak.
 
The total volume of ultra-processed food that India consumes has increased by more than 90 per cent since 2011, said a 2023 report by the World Health Organization (WHO). Retail sales growth of ultra-processed foods slowed down early in the pandemic but then recovered. The growth rate is similar to that of essential foods where volume is up 106 per cent in the same period, as seen in chart 1(click image for interactive link).

Assuming that the economy shows 6 per cent growth and disposable income improves, it will lead to a significant rise in the value of different ultra-processed food categories over the next decade. Four out of five categories under consideration would see over Rs 1 trillion in sales, with chocolates and sugar confectioneries topping the list (chart 2).

Poor dietary habits have a significant economic cost, according to a report by the United Nations Food and Agriculture Organization (FAO) this year. Labour productivity losses in hundreds of billions of dollars are caused by obesity and non-communicable diseases blamed on unhealthy diet. India is third among 154 countries ranked on estimated losses related to unhealthy dietary patterns, data from the FAO report showed. The cost to India was $669 billion on a purchasing power parity basis considering 2020 values. The United States’ cost was highest, followed by China (chart 3).

India, since at least 2017, has been considering tighter regulations to curb junk food consumption. Kerala imposed a tax in 2016 but it was nullified 11 months later.