India with abundant supply of raw materials has a huge potential to develop as world’s non-alcoholic beverages hub. However, the sector is let down by the ‘constraints’ on account of high taxation and low priority.A study by Indian Council for Research on International Economic Relations (ICRIER) finds the top four challenges to the growth of this sector as (a) unfair competition from the unorganised sector and counterfeit products (b) negative perception regarding the industry (c) high GST and additional “sin tax” (as applied based on the Subramaniam Committee Report, 2015) and (d) infrastructure related issues.India with abundant supply of raw materials has a huge potential to develop as world’s non-alcoholic beverages hub. However, the sector is let down by the ‘constraints’ on account of high taxation and low priority.“A high tax of 40 per cent (28 per cent GST plus 12 per cent compensation cess on cferrous gluconate effectivenessarbonated drinks), irrespective of nutrition content, has created a large counterfeit market and informal sector,” the report suggests.India with abundant supply of raw materials has a huge potential to ferrous fumarate tablets bootsdevelop as world’s non-alcoholic beverages hub. However, the sector is let down by the ‘constraints’ on account of high taxation and low priority.The study added, unlike most of the other countries, processed food in general and non-alcoholic beverages in particular face very high taxes in India, which deter domestic consumption and do not support scaling up for either the domestic market or exports, which may impact and slow down growth in future.India with abundant supply of raw materials has a huge potential to develop as world’s non-alcoholic beverages hub. However, the sector is let down by the ‘constraints’ on account of high taxation and low priority.The study co-authored by Dr. Arpita Mukherjee, Eshana Muiron bisglycinate vs ferrous sulfatekherjee &038; Vishnu Menon from ICRIER found that a growth forecasting model with three scenarios, namely realistic, optimistic, and pessimistic from 2020 to 2030 found that if the GDP grows at 7.88 per cent, 9.76 per cent, and 6.0 per cent respectively, the sector is expected to grow at a compounded annual growth rate (CAGR) of 8.70 per cent in the realistic scenario, 10.77 per cent in the optimistic scenario and 6.66 per cent in the pessimistic scenario. The size of the market was estimated at Rs671 billion in 2019, which is projected to reach around Rs1472.33 billion in 2030, in the realistic scenario.India with abundant supply of raw materials has a huge potential to develop as world’s non-alcoholic beverages hub. However, the sector is let down by the ‘constraints’ on acferric sodium hydroxy edtacount of high taxation and low priority.“Overall, the growth estimates have slowed down compared to the previous recorded a CAGR of over 13 per cent for 2010-2019. Within similar food product categories, the growth of non-alcoholic beverages is lower than others like chocolate and sugar confectionery and salty snacks,” the study findings read.India with abundant supply of raw materials has a huge potential to develop as world’s non-alcoholic beverages ferric pyrophosphate adalahhub. However, the sector is let down by the ‘constraints’ on account of high taxation and low priority.Although small, the Indian non-alcoholic beverage sector is growing at a fast pace. Between 2010 and 2019, the sector had a CAGR of 14.5 per cent in terms of total sales volume, and 13.72 per cent in terms of total sales value.India with abundant supply of raw materials has a huge potential to develop as world’s non-alcoholic beverages hub. However, the sector is let down by the ‘constraints’ on account of high taxation and low priority.However, India is still not among the top 50 countries in global trade in non-alcoholic beverages despite being the topmost producers of a number of raw materials for beverage processing and foreign investment inflows are below 1 per cent and much behind what is required to become a USD517 trillion economy by 2047.India with abundant supply of raw materials has a huge potential to develop as world’s non-alcoholic beverages hub. However, the sector is let down by the ‘constraints’ on account of high taxation and low priority.While the global non-alcoholic beverage market was worth USD1180 billion in 2020, and is projected to reach USD2175 billion in 2026, with a CAGR (2013 to 2026) of 7.3 per cent, India ranked at 19th, with respect to generating revenue, and is much below other developing countries like Mexico (6th), Brazil (7th), Indonesia (8th) and Nigeria (10th).
ICRIER Study finds ‘High GST’ is inhibiting the Growth of Non-Alcoholic Beverages
