Poor dietary habits are a leading contributor to deaths worldwide, surpassing other risk factors and driving the rising burden of non-communicable diseases (NCDs) such as obesity and diabetes. High intake of processed and ultra-processed packaged foods, which are often calorie-dense and low in nutrients, has been linked to increased risk of these conditions. Research shows that clear and easy-to-interpret nutrition information, particularly Front-of-Pack Labels (FOPLs), can help consumers make healthier choices by quickly highlighting key nutritional qualities at the point of purchase. In this context, the current study assessed how well consumers understand and perceive food labels. A consumer survey was conducted in India using snowball (purposive) sampling, gathering data from 425 participants aged 15–49 years. Respondents were asked about their awareness and comprehension of both back-of-pack and front-of-pack nutrition information, as well as their attitudes toward labelling. The findings indicated that, although many participants reported noticing nutrition labels, their actual understanding of the information was limited. A larger proportion (55.3%) felt that back-of-pack labels are most effective for communicating health-related information about processed foods, compared to 44.7% who viewed front-of-pack labels as effective. The results underscore the urgent need for consumer education on how to interpret food labels so that individuals can use this information to make more informed and healthier dietary choices, particularly given the growing consumption of unhealthy foods among young populations.