Festive Boost: UKIBC Hails Progressive GST Reform for Food and Drink
By Trisha Nagpal
Author: Shubhi Mishra | Head - Food and Drink
The UK India Business Council (UKIBC) appreciatively welcomes the recent announcement by Hon. Finance Minister Nirmala Sitharaman on the reduction of GST rates across various food and drink products. This timely reform is poised to revitalize the agriculture, food, and drinks sector, unlocking new opportunities for businesses in both India and the UK. With implementation slated for the start of the festive season, this move couldn’t be more welcome, providing a much-needed boost for consumers and businesses alike to celebrate the season with renewed optimism and growth.
Key items that saw a significant reduction include butter, ghee, butter oil, dairy spreads, and cheese (12% to 5%), Brazil nuts, dried nuts such as almonds, hazelnuts, pistachios, and macadamias (12% to 5%), as well as dried fruits, sausages, refined sugar, confectionery, pasta, jams, and sauces (12% to 5%). Even higher-taxed items such as malt, sugar confectionery, chocolates, coffee and tea extracts, soups and broths have all been reduced from 18% to 5%. This reform will lower input costs, ease pressure on businesses, and encourage greater trade and investment flows. On one hand Indian businesses, especially small and medium enterprises, the reduced tax burden creates room to flourish, scale operations, and innovate. While on other for UK businesses, it signals fresh investment opportunities in India’s expanding food and drink sector.
Most importantly, this measure will ultimately benefit end consumers, who will gain access to a wider choice of products at more affordable prices. By improving the Ease of Doing Business (EODB), these reforms set the stage for a more dynamic, resilient, and inclusive agri-food sector.
Coming soon after the signing of the India–UK Free Trade Agreement (FTA), this announcement is yet another landmark step in advancing bilateral trade. UKIBC remains committed to working closely with governments and businesses in both countries to maximise the benefits of this reform.
For businesses keen to expand their horizons in India’s dynamic food and beverage sector, we encourage you to connect with the UKIBC team. Together, we can turn this progressive policy shift into lasting commercial success.
Announcement Date: 03 September 2025
Implementation Date: 22 September 2025
Key GST Reductions in Food & Drink Sector
| Product Category | Previous GST Rate | Revised GST Rate |
| Butter, ghee, butter oil, dairy spreads, cheese | 12% | 5% |
| Brazil nuts (shelled/peeled) | 12% | 5% |
| Other dried nuts (almonds, hazelnuts, chestnuts, pistachios, etc.) | 12% | 5% |
| Dried fruits & mixtures (excl. dried tamarind) | 12% | 5% |
| Sausages and similar products | 12% | 5% |
| Refined sugar and all sugar goods | 12% | 5% |
| Sugar boiled confectionery | 12% | 5% |
| Pasta (cooked or stuffed) | 12% | 5% |
| Jams, jellies, marmalades, fruit/nut purées & pastes | 12% | 5% |
| Fruit or nut juices | 12% | 5% |
| Sauces and preparations | 12% | 5% |
| Malt (roasted or not) | 18% | 5% |
| Sugar confectionery | 18% | 5% |
| Chocolates & cocoa-based food preparations | 18% | 5% |
| Coffee extracts, essences & concentrates | 18% | 5% |
| Tea or mate extracts, essences & concentrates | 18% | 5% |
| Soups, broths, and preparations | 18% | 5% |
