
Consumers cheer as GST reforms make dairy products more affordable nationwide.
In a significant move poised to disrupt the Indian market, Mother Dairy has announced a sweeping reduction in the prices of its dairy and processed food products, effective September 22, 2025. This decision directly follows the implementation of the government’s GST 2.0 reforms, with the company aiming to immediately pass on the benefits of lower taxes to its consumers. This strategic price adjustment positions Mother Dairy as a leader in responding to policy changes and could set a precedent for the broader consumer goods sector.
The price cuts are comprehensive, impacting a wide range of popular items from pantry staples to frozen desserts. Specifically, consumers will see a drop in the cost of products like paneer, butter, cheese, and ghee. For instance, a 500-gram pack of butter, a key product in the market, will see its price reduced from Rs 305 to Rs 285. This move highlights the company’s focus on maintaining consumer affordability while adapting its business model.
While many products are becoming cheaper, the price of Mother Dairy’s poly pack milk remains unchanged. This is because this particular category of milk has historically been exempt from GST. However, the company is still extending the benefits to its tetra-pack milk range, where a one-litre toned pack will now be available for Rs 75, a reduction of Rs 2. This targeted approach ensures that the benefits of the GST 2.0 overhaul are felt across different segments of the dairy portfolio.
This decisive action by a major market player like Mother Dairy is a direct result of a significant shift in India’s tax landscape. The new GST 2.0 reforms have either lowered or completely removed taxes on numerous essential goods, positioning Mother Dairy’s entire product line in either a zero-tax or a minimal 5% tax bracket. This legislative change is the core driver behind the company’s ability to make such substantial price reductions.
As Mother Dairy leads the way with this price reduction, the international dairy and food community is watching closely. The industry is speculating on whether this move will trigger a domino effect, compelling other fast-moving consumer goods (FMCG) companies to follow suit. This development serves as a key case study in how government policy can directly influence corporate pricing strategies and consumer-facing benefits in one of the world’s largest dairy markets.
Original reporting by India Today: https://www.indiatoday.in/business/story/after-gst-overhaul-mother-dairy-slashes-product-prices-milk-cheaper-by-rs-2-2788112-2025-09-16
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