It is a physical change because the substance has not changed into another substance (chemical change). All that has happened is that the substance has changed its STATE OF MATTER.
how is melting of ice is a physical change
It is a physical Change because it changes on the outside and doesn't go through a chemical change.
Physical change:
Although some extensive properties (like shape, phase, etc.) of the material change, the material itself is the same before and after the change. The change can be “undone.”
Chemical change:
The substances present at the beginning of the change are not present at the end; new substances are formed. The change cannot be “undone."
https://www.learner.org/courses/essential/physicalsci/session4/closer1.html