Indian ice cream industry group looks for help

11-May-2021 - Last updated on 11-May-2021 at 08:43 GMT

The IICMA said the pandemic is causing many ice cream outlets to close. Pic: Getty Images/Amit Somvanshi

Related tags Ice cream India pandemic COVID coronavirus

The Indian Ice Cream Manufacturer's Association (IICMA) says for the second year in a row, the lack of government intervention to boost the sector has led to a loss of market for ice creams and frozen desserts during lockdowns and curfews.

With almost 12,000 small and large ice cream manufacturers in serious financial difficulties, the IICMA said many are shutting shop. Research has shown people's sweet tooth cravings happen more when a person is at home rather than at work.

The recent RBI policy that restructures loans rather than extending the moratorium is of little help to the ice cream industry, the IICMA said. In India, Gujarat sells the highest volume of ice cream, followed by Maharashtra, Delhi, Rajasthan, Karnataka, and other states. The most significant share of losses to the ice cream industry and its ancillary industries is also in the states suffering the most from the COVID-19 pandemic.

However, Sudhir Shah, president of IICMA, said, "The government can bring back a glimmer of hope by accepting two of our most logical demands: the reduction of GST, which we have been pitching for almost a year now, and a provision for fund assistance, either as interest-free or direct cash assistance."

IICMA added since last year the industry body has been unsuccessfully asking the government to reduce the GST from 18% to 12%. The industry body is also pushing for a transition of the industry to the composition scheme category. This would keep it at par with dairy industries, which have comparably lower tax slabs ranging from zero to 5% or 12% GST. In comparison, ice cream is under the 18% GST rate.

The IICMA said the ice cream industry uses raw materials from the dairy industry, accounting for 5% of India's GDP. The industry's poor performance might spill over in the form of low demands for milk, butter and cream. This could affect the livelihoods of farmers and people in the dairy and related food processing industries.

"None of our requests have been met till now. The government could do a lot to boost the sector during such pall of gloom in the economy," said IICMA secretary Ashish A Nahar.

"March and April have already passed. We have just one more month to prove our point to the government. If not now, then we would not be able to recover even a part of our losses over the rest of the year. Ice cream is sold mainly during the peak selling season of March to May. And with the current lockdown in progress, we have lost all hope.”

Pradeep G Pai, treasurer of IICMA, said, "All state governments should support the ice cream industry as it contributes immensely in generating local employment (direct and indirect). Ice cream, like dairy, should be brought under essential goods as done by the Government of Karnataka during the lockdown last year. We are also seeking a deferral of electricity bill payments as sales have taken a huge hit across the country.”

The IICMA said the Minister of Finance needs to take quick, decisive action to keep the industry afloat.