Food, drink giants plot fightback as India looks to tighten rules

NEW DELHI - Several food and drink multinationals and trade groups met in recent weeks to discuss how to lobby more effectively against Indian proposals for higher taxes and stricter labeling rules on fatty or sugary foods, sources familiar with the talks said.

According to officials, Prime Minister Narendra Modi's administration has begun to look closely at policy proposals under discussion since at least 2015, raising concerns over the possible impact on the $57 billion sector.

Alarmed by rising rates of obesity and diabetes, India plans to frame draft rules within a month requiring manufacturers to display the fat, sugar and salt content of products on packaging.

It is also considering a nationwide "fat tax" for so-called "junk foods", a senior government official said, although that is unlikely to be rolled out in the near term.

Last month, executives from companies including PepsiCo, Nestle and Indian consumer firm ITC met trade groups in New Delhi to coordinate efforts and urge the government to resist pressure from health advocates, according to an industry source aware of the meeting.

The attendees, who felt their efforts to push back had been too piecemeal, talked about forming a core group to unify their message when engaging the government, the source said.

PepsiCo and Nestle in India did not comment directly on the meeting or its outcome. ITC did not respond to requests for comment.

Trade group All India Food Processors' Association, whose members range from street vendors to global conglomerates, said two industrywide meetings were held in February.

Its members, who also discussed ways to offer more nutritious products, plan to send a joint representation to the government and approach health and food officials to express concerns about stringent regulations.

Concerns about the health effects of fast food and soda drinks have been growing globally in recent years.

But India has been slow to finalize rules on products high in fat, sugar and salt.