New Delhi, Dec. 14 -- China is set to impose a 13% sales tax on condoms, birth control pills and contraceptives from January 1, 2026, ending a three-decade exemption. The policy shift is aimed at reversing the country's falling birth rates and mitigating the long-term effects of an ageing population and shrinking workforce.

Alongside the tax change, authorities are rolling out incentives to encourage childbirth. These include tax exemptions for childcare services, elder care institutions and disability service providers, as well as longer maternity leave, which has increased from 128 days to 158 days in major cities such as Beijing. A 30-day paid paternity leave has also been proposed.

Despite these measures, economic realities remain a...