Ice-cream makers brace for life after GST cut
India’s ₹30,000-crore ice-cream market, split almost equally between organised and unorganised players, is set for a major boost with the GST rate on ice creams being slashed from 18% to 5%, a move expected to drive 10–15% incremental annual growth. The country’s largest dairy cooperative, GCMMF (Amul), which currently operates about 29–30 ice-cream plants and enjoys a retail reach of over 1 million outlets, is planning to establish 2–3 more plants in the coming years to strengthen its presence in tier-2 and tier-3 cities.
Amul leads the organised ice-cream segment with nearly 35% market share, followed by Hindustan Unilever Limited (Kwality Wall’s) at around 15% and Vadilal at about 12%. HUL, which has announced the demerger of its ice-cream business by the end of FY26, aims to sharpen focus on both affordable impulse treats and premium festive offerings, currently reaching about 0.5 million outlets.
Meanwhile, Mother Dairy, with an ice-cream business generating ₹500–600 crore in annual revenue, has been growing at 10–15% per year and is looking to expand capacity further, supplementing its already board-approved ₹1,500-crore investment plan. Together, these moves highlight how industry leaders Amul, HUL, and Mother Dairy are preparing to capitalise on the GST rationalisation that is expected to accelerate growth across India’s ice-cream sector.
Industry Insights
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The 13-point GST rate cut is expected to compress costs significantly, enabling manufacturers to either slash prices or expand margins, thereby making ice cream more affordable, especially in smaller towns and rural markets.
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Smaller regional brands and parlour operators, which earlier struggled with high input taxation, may now find a more level playing field versus national brands. This could enhance competition, innovation, and localized growth.
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In the short term, the industry may see a flurry of promotional pricing, packaging redesigns, and product line consolidation as firms adjust to lower tax structures and assess volume response.