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Budget - As India negotiates FTAs, industry expecting policy reforms
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Thursday, 15 January, 2026, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The Union Budget will be presented on Feb 1 and the food industry is expecting more policy reforms as India is negotiating more and more free trade agreements.
The industry experts seek market access to the EU and UK with easing restrictions for India origin dairy based products. The industry seeks India should negotiate key policy issues with EU counterparts and issuance of one-time health certificates on quality parameters.
As per PHDCCI, the RTE and RTC items are being exported from India to the US, Canada, South Korea, Singapore, Australia, but blanket restrictions imposed by the EU and UK on Indian dairy are impacting Indian exports.
A particular concern was raised on ghee export from India wherein the Export Inspection Agency under Ministry of Commerce refused to issue health certificates for dairy products made in India to EU countries.
Industry experts also recommended enhancing Customs Duty on import of all fruit / vegetable pulp and concentrates to the maximum possible, as duty-free import from the neighbouring countries are impacting the demand of domestically produced fruits and thereby impacting farmers income.
"As a suggestion the duty rates on imported pulp / concentrate of orange, apple, mixed fruit and pineapple should be increased to the maximum permissible bound rate (currently 85% for most fruit pulps / concentrates). Further efforts should be made to increase the bound rate and also the import duty on these fruit pulps / concentrates to 180%," reads the recommendations made to the Ministry of Finance by PHDCCI.
PHDCCI added that preferential treatment for fruit beverages imported from neighbouring countries under FTAs to be given only if pulp / concentrate / fruit etc. have also originated from such neighbouring countries.
"Alternatively, the value addition norms under the FTAs for beverages need to be revised upward to at least 80%," stated PHDCCI adding that low import duty in India on fruit pulp / concentrates (35% to 50%) when compared to duty applicable on other agri-commodities like coffee (100%), tea (100%) etc. Due to lower import duty, beverage manufacturers prefer to use 3rd country origin fruit & vegetables in their product due to price arbitrage as compared to Indian produce.
On GST front, the PHDCCI sought rationalisation of the tax rates on packaging material wherein food products are liable to tax rates of nil/5%, however some of the packaging material which are essential are continued to be taxed at 18% leading to an inverted duty structure and GST rate on output food product is less than 18%.
"The rates may be rationalised from 18% to 5% on all kinds of packaging material to address the issue of inversion of varied range of products," reads the statement of PHDCCI.
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