Image Source: N.J. Jain and Associates
In a move that has sent waves of optimism across the frozen dessert sector, the Government of India has officially reduced the Goods and Services Tax (GST) on ice cream from 18 percent to just 5 percent. The decision, finalized during the GST Council meeting held on September 3 and 4, 2025, is being hailed as a landmark reform by industry stakeholders. With the festive season approaching and temperatures still soaring in parts of the country, the timing couldn’t be better for both manufacturers and consumers.
The Indian Ice Cream Manufacturers’ Association (IICMA) has welcomed the decision with open arms, calling it a game-changer for affordability, innovation, and industry expansion. The ripple effects are expected to touch everything from dairy farmers to export markets, ushering in a new era of growth for one of India’s most beloved food categories.
Major Highlights From The GST Council Decision
• GST on ice cream has been slashed from 18 percent to 5 percent, effective immediately following the September 2025 Council meeting.
• The reform is expected to reduce retail prices of ice cream by 5 to 10 percent, making it more accessible to consumers across income brackets.
• IICMA has pledged that its members will pass on the benefits to consumers, with price cuts already being planned across major brands.
• The move is also expected to boost employment, investment, and innovation in the sector.
Industry Leaders React With Optimism
Sudhir Shah, President of IICMA, expressed gratitude to the government, particularly President Droupadi Murmu, Finance Minister Nirmala Sitharaman, and the GST Council. He emphasized that the relief would ease the burden on businesses and encourage expansion into underserved markets.
Rajesh Gandhi, Chairman and Immediate Past President of IICMA, along with Chief Advisor R G Chandramogan, also played key roles in advocating for the reform. Their efforts, alongside regional ice cream associations and the IICMA managing committee, were instrumental in securing the tax cut.
Impact On Pricing And Consumer Demand
1. Ice cream prices are expected to drop by up to 10 percent, with brands like Amul already working on pro-rata adjustments.
2. The reduction is likely to drive higher consumption, especially in tier-2 and tier-3 cities where affordability remains a barrier.
3. With India’s per capita ice cream consumption at just 500 ml annually—compared to 15–20 liters in developed countries—the growth potential is enormous.
Boost For Dairy Sector And Rural Economy
The GST relief is not just a win for urban consumers—it’s a shot in the arm for India’s dairy ecosystem. By making ice cream more affordable and increasing demand, the reform is expected to:
• Strengthen the dairy supply chain and support farmers through increased procurement.
• Encourage more players to enter the organized sector, reducing tax evasion and adulteration.
• Promote the use of high-quality milk and ingredients, enhancing food safety and consumer trust.
Innovation And Export Opportunities On The Horizon
With reduced tax pressure, manufacturers are now better positioned to invest in:
• New product development, including health-focused and regional flavor variants.
• Expansion into export markets, leveraging India’s competitive pricing and growing reputation for quality.
• Upgrading manufacturing facilities to meet global standards and sustainability goals.
Looking Ahead: A New Chapter For Frozen Treats
The GST cut is more than a fiscal adjustment—it’s a strategic nudge toward unlocking the full potential of India’s ice cream industry. As manufacturers gear up for increased demand and consumers prepare to enjoy more affordable scoops, the sector is poised for a transformation that could redefine its place in the Indian food economy.
Sources: Telangana Today, Times of India, The Hindu BusinessLine, Agro & Food Processing.
Advertisement
Advertisement
