Wato Report India Markets Opps May09 PDF

Department of Agriculture and Food
Western Australian Trade Office India
Bulletin: 4770
ISSN: 1833-7236
May 09
Indias market opportunities

for imported fresh and processed foods
Report Prepared by
MADRAS CONSULTANCY GROUP, CHENNAI
study.of.india_A4.cover.V3.indd 1
22/5/09 1:10:12 PM
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Web: www.dsd.wa.gov.au
Department of Agriculture and Food, Western Australia
3 Baron-Hay Court
South Perth WA 6151
Tel: +61 (8) 9368 3333
Fax: +61(8) 9367 7389
Web: www.agric.wa.gov.au
Disclaimer
Whilst every care has been taken in compiling the information in this report, the
Department of State Development, the Department of Agriculture and Food, Western
Australia and its contractors neither warrant nor represent that the material published
herein is accurate or free from errors or omissions. To the extent permissible by law the
Department of State Development, the Department of Agriculture and Food, Western
Australia and its contractors shall not be responsible or liable for any errors, omissions
and misrepresentations made herein.
Copyright Western Australian Agriculture Authority, 2009
Indias market opportunities for imported fresh and

processed foods
Table of Contents
Page
1.
Introduction ........................................................................................................................
1.1 Background ................................................................................................................
1.2 Objective ....................................................................................................................
1.3 Scope of work ............................................................................................................
1.4 Research Methodology ..............................................................................................
1.5 Products covered .......................................................................................................
1.6 Glossary of terms .......................................................................................................
1
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2.
Executive Summary ...........................................................................................................

2.1 Overview ....................................................................................................................
2.2 Import trends ..............................................................................................................
2.3 Distribution channels and logistics .............................................................................
2.4 Duties .........................................................................................................................
2.5 Market entry strategy: India .......................................................................................
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3.
Overview of the Indian Agriculture and Food Processing sectors ...............................

3.1 Agriculture ..................................................................................................................
3.2 Indian food processing sector ....................................................................................
3.3 Overview of production and consumption in major sectors .......................................
3.4 Key drivers and trends ...............................................................................................
3.5 Investment opportunities ............................................................................................
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4.
Current status and trends in Indias imported food sector ...........................................

4.1 Current import scenario .............................................................................................
4.2 Key drivers and trends ...............................................................................................
4.3 Major segments of imported food products ...............................................................
4.4 Challenges faced .......................................................................................................
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5.
Overview of the food retail sector in India ......................................................................

5.1 Growth of retail in India ..............................................................................................
5.2 Evolution of food retail in India ...................................................................................
5.3 Retail models in India: Current and emerging ...........................................................
5.4 Growth in imported food ............................................................................................
5.5 Profile of food retail stores in India ............................................................................
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6.
Distribution structure, logistics and infrastructure development ................................

6.1 Introduction ................................................................................................................
6.2 Distribution structure ..................................................................................................
6.3 Hotels and restaurants ...............................................................................................
6.4 Logistics .....................................................................................................................
6.5 Physical distribution structure ....................................................................................
6.6 Cold storage ...............................................................................................................
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7.
Pricing structure and tariffs .............................................................................................. 58

7.1 Tariffs and duties of imported foods .......................................................................... 58
7.2 Pricing structure of imported foods ............................................................................ 60
8.
Regulatory framework and import procedure ................................................................. 66

8.1 Regulatory framework ................................................................................................ 66
8.2 Import procedure and documentation ........................................................................ 70
List of Tables
Page
Table 1.1 Interviews completed ......................................................................................................
Table 1.2 Abbreviations used in the report .....................................................................................
Table 2.1 Import duties on select food products ............................................................................
Table 2.2 Target product segments ................................................................................................
Table 3.1 Food grains production, 200508 (million tonnes) .........................................................
Table 3.2 Indian Food Sector: Market size, 200607 .....................................................................
Table 3.3 Number of units in the food processing sector ...............................................................
Table 3.4 Major food processing sectors ........................................................................................
Table 3.5 Production of fruits and vegetables (million tonnes) ......................................................
Table 3.6 Meat production, 200607 (million tonnes) ....................................................................
Table 3.7 Fish production, 200106 (million tonnes) .....................................................................
Table 3.8 Sea food processing: Industry structure .........................................................................
Table 3.9 Sea food processing units in select states .....................................................................
Table 3.10 Major players in the marine and fish industry ...............................................................
Table 3.11 Market size of dairy products (US$ billion) ...................................................................
Table 3.12 Milk production and per capita availability, 200006 ....................................................
Table 3.13 Growth rates of milk and dairy products, 200607 (organised sector) .........................
Table 3.14 Major players, brands and products .............................................................................
Table 3.15 Major types and brands of chocolates ..........................................................................
Table 3.16 Biscuits, production trends (organised sector), 200508 (million tonnes) ...................
Table 3.17 Major players and brands .............................................................................................
Table 3.18 Major players and their market share ...........................................................................
Table 3.19 Major players and flavours ...........................................................................................
Table 3.20 Olive oil consumption and growth estimates, 20062012 (tonnes) .............................
Table 4.1 Summary of import data, 200507 .................................................................................
Table 4.2 Major fruits imported, 200708 (US$ million) .................................................................
Table 4.3 Prices of select fruits and brands ...................................................................................
Table 4.4 Major vegetables imported, 200708 (US$ million) .......................................................
Table 4.5 Major meat products imported, 200708 (US$ million) ..................................................
Table 4.6 Major meat and marine products imported, 200708 (US$ million) ...............................
Table 4.7 Prices of select brands of meat and fish products .........................................................
Table 4.8 Major dairy products imported, 200708 (US$ million) ..................................................
Table 4.9 Prices of select brands and dairy products ....................................................................
Table 4.10 Prices of select brands of pasta products ....................................................................
Table 4.11 Major confectionery products imported, 200708 (US$ million) ..................................
Table 4.12 Prices of select brands of confectionery products ........................................................
Table 4.13 Major processed fruits and vegetables imported, 200708 (US$ million) ....................
Table 4.14 Prices of select brands of processed fruits and vegetable products ............................
Table 4.15 Import of honey, 200708 (US$ million) .......................................................................
Table 4.16 Prices of select brands of honey ..................................................................................
Table 4.17 Import of olive oil, 200708 (US$ million) .....................................................................
Table 4.18 Prices of select brands of olive oil ................................................................................
Table 5.1 Small convenience stores (Kirana stores) and hawkers ................................................
Table 5.2 Types of organised retailers ...........................................................................................
Table 5.3 Profile of select retail stores ...........................................................................................
Table 6.1 Transport infrastructure in India ......................................................................................
Table 6.2 SKU maintained by an importer ......................................................................................
Table 6.3 Sector-wise distribution of cold storage units, 2008 (nos) ..............................................
Table 6.4 Commodity-wise distribution of cold storage units, 2008 (nos) ......................................
Table 7.1 Import duties on select food products ............................................................................
Table 7.2 Custom duty for imported apples ...................................................................................
Table 7.3 Pricing structure for apples and olive oil .........................................................................
Table 8.1 Time taken for clearance of imported food at the port ...................................................
Table 8.2 Approximate charges levied by clearing and forwarding agents ....................................
ii
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List of Figures
Page
Figure 2.1 Trends in the import of fruits, 200207 (US$ million). ..................................................
Figure 2.2 Trends in the import of meat and marine products, 200207 (US$ million). ................
Figure 2.3 Trends in the import of dairy products, 200207 (US$ million). ...................................
Figure 2.4 Trends in the import of confectionery, processed F&V and other processed food,
200207 (US$ million). .................................................................................................
Figure 2.5 Distribution structure for imported food products. .........................................................
Figure 3.1 Market size and composition of the processed fruits and vegetables (US$ billion). ....
Figure 3.2 Egg Production Trends, 200207 (billion numbers). ....................................................
Figure 3.3 Market size and composition of fish and marine products (US$ billion). ......................
Figure 3.4 Composition of dairy products (US$ billion). .................................................................
Figure 3.5 Confectionery market, 200407 (US$ million). .............................................................
Figure 3.6 Confectionery Market Segmentation: Share, by volume, 200607 (%). .......................
Figure 3.7 Bakery Products: Market Share, 200506 (By Value). .................................................
Figure 3.8 Consumption of biscuits across regions (% share). ......................................................
Figure 3.9 Biscuit: Import and Export (tonnes). ..............................................................................
Figure 4.1 Import of fruits and vegetables (US$ million). ...............................................................
Figure 4.2 Import of meat products (US$ million). .........................................................................
Figure 4.3 Import of marine products (US$ million). ......................................................................
Figure 4.4 Import of dairy products (US$ million). ..........................................................................
Figure 4.5 Import of pasta products (US$ million). .........................................................................
Figure 4.6 Import of confectionery (US$ million). ...........................................................................
Figure 4.7 Import of juice, sauce and jams (US$ million). .............................................................
Figure 4.8 Import of natural honey (US$ million). ..........................................................................
Figure 4.9 Import of olive oil (US$ million). ....................................................................................
Figure 5.1 Retail market in India (US$ billion). ...............................................................................
Figure 5.2 Retail market by sector, 2008 (%). ................................................................................
Figure 5.3 Organised retail market by sector, 2008 (%). ...............................................................
Figure 5.4 Growth in imported food, 200508 (US$ million). .........................................................
Figure 6.1 Distribution structure for horticultural products. ............................................................
Figure 6.2 Distribution structure for frozen meat/fish/cheese and butter. ......................................
Figure 6.3 Distribution structure for processed food products within port cities. ...........................
Figure 6.4 Distribution structure for processed food products outside the port cities. ...................
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List of Appendices
Page
Appendix I. Major players in the food processing sector and products ..........................................
Appendix II. Cold storage tariffs .....................................................................................................
Appendix III. Customs duty on select imported food products .......................................................
Appendix IV. Conditions of import of select fruits from Australia ...................................................
Appendix V. Inspection and fumigation fees for fresh fruits and vegetables ..................................
Appendix VI. Regulatory agency contacts ......................................................................................
Appendix VII. Select list of importers/distributors in India ..............................................................
iv
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Madras Consultancy Group
1. Introduction
1.1 Background
Western Australian Trade Office, India, in partnership with the Department of Agriculture and
Food, Western Australia (DAFWA), has commissioned Madras Consultancy Group to
prepare a publication titled Indias Horticulture and Food Processing SectorMarket
Opportunities for Imported Products.
1.2 Objective
The objective of this report is to provide an understanding of Indias horticulture and food
processing sectors and outline a market entry strategy for Western Australian exporters.
1.3 Scope of work

The study focuses on the different aspects associated with the growth and prospects of the
imported foods market in India and it reviews:
An overview of the Indian horticulture and food processing sector
Current status and trends in Indias imported food sector with focus on products that
are highly imported
Import of food products and countries of origin
Overview of the food retail sector in India
Distribution structure, logistics and infrastructure development
Pricing structure and tariffs
Regulatory and policy framework in India.
1.4 Research Methodology

The research methodology comprised primary research and was supported by in-depth
secondary and internet research. Primary research comprised personal interviews with some
of the leading importers, distributors, food chains, institutions and government departments.
The number of face to face interviews completed is shown below in Table 1.1. The field
research was conducted by MCGs well established team of consultants and researchers in six
cities, viz. Bangalore, Chennai, Hyderabad, Mumbai, New Delhi and Pune.
Table 1.1 Interviews completed
Category
Nos
Importers/distributors
50
Food chains/stores
19
Institutions (hotels)
18
Associations and Others

Total
7
94
Secondary research was drawn from multiple sources such as the government publications,
trade journals and white papers, industry association publications, press reports and
features, external libraries and MCGs extensive library cum database. Intensive internet
search and analysis was also undertaken.
1.5 Products covered

The products which are covered in this report include:
Fruits
Vegetables
Fresh and processed meat and fish

Dairy products
Cheese
Butter
Ice-cream
Processed fruits and vegetables
Juice
Jam
Sauces
Confectionery
Honey
Olive oil
1.6 Glossary of terms

Table 1.2 Abbreviations used in the report
ACD
Additional Custom duty
APEDA
Agricultural and Processed Food Products Export Development Authority
APHIS
Animal Plant Health Inspection Service (APHIS)
CAGR
Compound annual growth rate
CCFS
Central Committee For Food Standards
CFTRI
Central Food Technological Research Institute
CIF
Cost, Insurance and Freight
CST
Central Sales Tax
CVD
Countervailing duty
DA
Documents against acceptance
DAHD
Department of Animal Husbandry and Dairying
DGFT
Director General of Foreign Trade (DGFT)
FDI
Foreign Direct Investment
FEMA
Foreign Exchange Management Act
FPO
Fruit Products Order
FSSA
Food Safety and Standards Authority
Table 1.2 Continued

FTA
Free Trade Agreement
grams
GDP
Gross Domestic Product
GRDI
Global Retail Development Index
HACCP
Hazard Analysis Critical Control Points
HUL
Hindustan Unilever Limited
IBMA
Indian Biscuit Manufacturers Association
kg
kilograms
LC
Letter of Credit
OGL
Open General Licence
OIE
Office International Des Epizooties
MNCs
Multinational corporations
MOFPI
Ministry of Food Processing Industries
MPEDA
The Marine Products Export Development Authority
MRLs
Maximum Residue Limits
MRP
Maximum Retail Price
NOC
No Objection Certificate
PFA
Prevention of Food Adulteration Act
PQ
Plant Quarantine
RBI
Reserve Bank of India
SIL
Special Import Licence
VAT
Value Added Tax
2. Executive Summary
2.1 Overview
Though the Indian economic reform process commenced in 1991, it is only in the last five to
seven years that the countrys GDP has accelerated well past the 7 to 8 per cent per annum
growth rate. There is clear evidence of discernible increase in purchasing power in many
parts of the country and rising affluence in many urban pockets. Globalisation, urbanisation,
relaxation of import policies, rising income, growth of organised retailing, economic growth,
impact of visual media and changing lifestyles and food habits have opened the doors for the
entry of imported food products from across the globe. With increasing propensity to spend,
the Indian urban consumer now has the willingness and means to try new products. Today,
retail outlets ranging from small grocery stores to large retail chains in most urban cities sell
imported food products. From Washington apples and Australian Kiwifruit to Swiss
chocolates, French cheese and Italian pasta, a wide variety of imported products are
available in the Indian market. Apples, pears, chocolates, juices, pasta, olive oil, sauces and
salad dressings are some of the prime categories of imported products.
The recent global financial crisis has cast its shadow over the Indian economy. However, the
Indian economy is expected to weather the storm much better than its compatriots thanks to
the well diversified and strong domestic economy and appropriate monetary and fiscal policy
responses from the Central Government. The economy is expected to close the fiscal year
200809 with a GDP growth rate around 6.0 per cent and forecasts for 200910 are in a
similar range. The economy is expected to revert to a higher growth trajectory by 2010.
Recent data tends to suggest that the impact of the downturn on the domestic fast moving
consumer goods sector has been much lower than other sectors. Brand owners are also
making strong forays into the vast rural hinterland creating fresh demand for their products
and services. The negotiations between India and Australia to sign a FTA will further create
new opportunities for Western Australian exporters.
2.2 Import trends

The usage of imported products that started as a fad some decades back has now become a
habit amongst a small but rapidly growing urban populace. Import of food products has now
become one of the well traded segments. Growing at a CAGR of 23 per cent, Indias total
import of food products reached US$3.6 billion in 200708, up from US$1.3 billion in
200203.
2.2.1 Horticulture
Fruits
Imported fruits have made successful inroads into the Indian markets and are well accepted
by Indian consumers. Indias import of fruits in 200708 was US$202.8 million, an increase
of 26 per cent over the previous year. Despite being priced higher than the Indian varieties,
the major selling points for imported fruit are that they are of higher quality than local
produce, well graded, attractively packed and have better appearance. Apples top the list of
fruits imported followed by oranges, grapes and pears. USA, China and Chile are the major
exporters of apples to India. It is worth noting that despite the long distance and longer transit
time, Chile has emerged as the third largest exporter of apples to India. The peak season for
imported fruits is during the off season for domestic crops.
250
200
160.9
202.8
150
85.14
100
112.6
52.13
50
66.37
0
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
* Excluding nuts.
Source: Commerce.nic.in
Figure 2.1 Trends in the import of fruits, 200207 (US$ million).
Vegetables
Indias import of vegetables was valued at around US$2.92 million in 200708, up from
US$0.86 million in 200607. However, the import of vegetables is still small compared to
fruits, with the majority being imported from the neighbouring countries.
2.2.2 Meat and marine products

Trends in import of meat and marine products are shown in Figure 2.2.
40
35.21
35
24.63
30
23.33
25
20
14.68
15
11.32
8.19
10
5
0.46
0.42
1.31
0.69
1.14
2.54
0
2002-03
2003-04
2004-05
Meat
2005-06
2006-07
2007-08
Fish
* Meat and marine products include both fresh and processed.

Figure 2.2 Trends in the import of meat and marine products, 200207 (US$ million).
Meat
Indias import of meat is negligible and stood at only US$2.54 million in 200708. The
meagre import of meat can be attributed to two factors; government restriction and the Indian
mindset. High cost of the imported meat products is also a hindrance to its growth. But there
is a gradual increase in the import of processed meat products. Zwan and Keells are some of
the popular brands of frozen meat products.
Marine
Marine products imports in 200708 Indias import was valued at US$35.21 million.
According to MPEDA, Indias import of marine products is not meant for domestic
consumption but is mostly processed and re-exported. Chilled fish accounts for nearly 64 per
cent of the total imports of marine products followed by frozen shrimps, prawns, crabs, cuttle
fish and tuna. Processed marine products are also gaining acceptance. Ayyam and
Farmland are the popular brands of frozen fish products.
2.2.3 Dairy products

Owing to the governments ban on the import of dairy products from certain countries
including Australia, the import witnessed a decline of nearly 40 per cent, from US$23.61
million in 200607 to US$14.58 million in 200708; however, this is likely to improve with the
recent lifting of the ban on Australian dairy products.
30
28.21
23.61
25
20
14.58
15
12.79
11.51
7.89
10
5
0
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
* Dairy products include cheese and curd, butter, yoghurt, milk and cream, whey, ice-cream.
Figure 2.3 Trends in the import of dairy products, 200207 (US$ million).
Cheese, butter, whey, yoghurt and ice-cream are the some of the major dairy products that
are imported with cheese being the most popular. The import of cheese reached US$4.79
million in 200708. Denmark, Netherlands, France and Italy are the major sources of
imported cheese. Kraft, Happy cow and laughing cow are some of the popular brands. Whey,
which is a by-product of cheese, is another major product of import which is sourced
primarily from USA, France and Denmark. Import of whey was US$4.1 million in 200708.
Indias import of yoghurt was valued at US$0.28 million in 200708, with Spain and France
being the major sources. With increase in the consumption of ice-creams, the import of
ice-creams reached US$0.43 million in 200708 from just US$0.08 million in 200506.
London Dairy, a recent entrant in the Indian market has gained popularity.
2.2.4 Confectionery, processed fruits and vegetables and other processed

food
Figure 2.4 shows the trend in import of Confectionery, processed fruits and vegetables and
other processed foods.
40
35
30
25
20
15
10
5
0
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
Confectionery
7.16
9.94
12.2
15.47
19.51
31.65
Processed F&V
11.03
9.55
12.71
14.89
22.16
29.78
Other processed food
11.41
8.41
10.51
11.01
9.27
20.14
* Processed F&V includes juices, jams and sauces.

* Other processed food includes pasta, honey and olive oil.
Figure 2.4 Trends in the import of confectionery, processed F&V and other processed food, 200207
(US$ million).
Confectionery
Imported confectionery, an early entrant to the Indian market, continues to be well sought
after and is now widely available. While the import of chocolate confectionery increased by
39 per cent from 200506 to 200708, the import of sugar confectionery increased by
51 per cent during the same period. Imported confectionery has gained wide appeal owing to
distinctive taste, attractive packaging and extensive distribution networks. While chocolate
confectionery is primarily imported from China, Singapore, UAE, Malaysia, UK and
Switzerland, nearly 53 per cent of the sugar confectionery is imported from China. Toblerone,
Snickers, Lindt, Mars and Bounty are some of the few well known brands in the Indian
market.

Changing food habits, increasing number of nuclear families and working women has
increased the demand for processed fruits and vegetables such as jam, juice, ketchups,
sauces and dressings. In 200708 the import of juices, sauces and jams were US$16.8
million, US$11.4 million and US$1.5 million respectively. China, Brazil, USA, UAE and
Malaysia are the major exporters of juices to India. Sauces are mostly imported from China,
USA, Netherlands and UK. Jams are imported from various parts of the world such as
Belgium, France, Australia, China, Turkey, and UK. While Tang is the most popular juice
brand, Tabasco and Dana are the well known sauce and jam brands respectively.
Pasta
Driven by the rising attraction to Italian cuisine and easiness of preparation, pasta has
emerged as one of the most popular imported food products. Import of pasta increased from
US$2.5 million in 200607 to US$8.5 million in 200708. The lack of major domestic pasta
manufacturers has facilitated the entry of foreign pasta brands. Pasta is mainly imported from
Italy. San Remo, Barilla and Agnesi are some of the better known brands.
Honey
The market for imported honey is growing rapidly in the country. Indias import of natural
honey was US$2.9 million in 200708, up from US$0.5 million in 200506. China is the
largest supplier of natural honey to India and accounts for around 83.5 per cent of Indias
total import of natural honey. Wescobee and Airborne are popular imported brands.
Olive oil
Olive oil is another product that is gaining market acceptance in recent years, largely owing
to the new obsession towards nutritious food and the growing popularity of Italian food.
Riding on high health benefits, the import of olive oil rose from US$5.24 million in 200506 to
US$8.72 million in 200708. Figaro and Leonardo are the leading imported brands. The
recent reduction of the import duty rate on olive oil to zero per cent will be a big advantage to
Western Australian exporters.
2.3 Distribution channels and logistics

The channels of distribution vary based on the type of products imported into India. The
importer stores perishables and other products that require refrigeration in a cold storage
facility. Usually the cold storage is rented, although some importers have their own
warehouses equipped with cold storage. The importer then sells the products to several
regional distributors who in turn distribute to the retail stores and institutions. In certain cases
the importer directly sells to the retail stores. The broad distribution structure is as per
Figure 2.5.
Importer
Cold
storage
Distributor
Retailer/
Institutions
Figure 2.5 Distribution structure for imported food products.
Managing the transportation and logistics costs has become increasingly strategic and
complex for the importers and distributors. Container handling and cold storage facilities are
available at all major ports. After the container with imported food products arrives at the
port, the standard formalities need to be completed before they are cleared for further
transportation by the importer. There is some evidence of delays in the customs clearance
processes and it was reported during the study that the clearance of a consignment at an
Indian port takes about 710 days, on an average.
After obtaining clearance from the ports, the importer generally transports the goods to
warehouses located near their central operations. Consignments are then transported to
distributors in their respective locations and they in turn despatch the products to the retail
outlets.
2.4 Duties
India, traditionally has maintained high tariffs and import restrictions on food items. The basic
duties are levied while importing products into India and these include:
Basic dutyThe Government of India considers the basic import duty as the main levy.
This duty can either be a percentage rate applied to the value of the goods (valued at
Cost, Insurance and Freight (CIF)) or a specific rate based on unit of measurement.
Additional duty of customsAlso known as countervailing duty, it is calculated on the

assessable value of imports plus the basic customs duty. This is equivalent to the rate
of excise duty that would have been charged had the imported item been manufactured
in India.
Education CessThis is charged as a percentage of all duties and taxes levied by the
central government except the additional duty of customs.
Special additional dutyThis duty is levied on the total value of goods, computed as
the value at CIF, along with the basic customs duty and the additional duty of customs.
Apart from these four duties, additional levies such as antidumping duties and safeguard
duties may also be applied. It may be noted that at present additional duty of customs and
special additional duty are nil for most food products.
Table 2.1 Import duties on select food products
Category
Apples
52.015
Fresh meat
36.497
Fresh fish
31.209
Yogurt, buttermilk, cheese and curd
31.209
Butter, Diary spreads, Ghee, Butter oil, whey, ice-cream
36.497
Fruit juices
41.906
Pasta, Jams, Sauces
36.497
Confectionery (chocolate and sugar)
48.086
Natural Honey
68.955
Olive oil (Virgin)

*
Total
Customs
Duty (%)*
Actual duty is calculated on Assessable value, i.e. CIF + 1%.
Notes:
1. These rates have been compiled from Clearing and Forwarding agents and customs officials.
2. Import duties and taxes are subject to change without notice. It is strongly suggested that they be re-checked
prior to the conclusion of any commercial agreement.
2.5 Market entry strategy: India

Any well thought of country strategy would need to take into account:
products that can be exported from the country of origin
food products that are in demand (a threshold level) in the destination country
current demand (volume and value) for the selected products and their future growth
potential
competition from other exporting countries and pricing
local tastes and preferences
local distribution systems and commercial practicesstrengths and limitations
laws of the land (home and destination countries).
In the ensuing paragraphs, an attempt has been made to present strategic direction and
options for entering the Indian market. These are alternatives and options for discussion and
further detailed investigation would be necessary to firm up some of the actions.
Identifying target product segments and regions
Target product segments
The demand for select imported products is growing well in India and it would be beneficial to
focus on these segments, shown in Table 2.2. This list is not exhaustive and depending on
the volume of export planned, other product may be selected. (Refer import of food
products.xls attached.)
Table 2.2 Target product segments
Import value
(US$ million)
Product
200203
Citrus fruits
CAGR (%)
200207
200708
0.26
2.78
60.6
10.50
52.96
38.2
Pears and Quinces
1.07
5.66
39.5
Apricots
0.03
0.15
38.0
Plums and sloes
0.05
0.76
72.3
Cheese
1.80
4.79
21.6
Pasta
5.15
8.51
10.6
Chocolate confectionery
5.25
20.39
31.2
Sugar confectionery
1.91
11.26
42.6
Juices
9.39
16.83
12.4
Sauces and dressings
0.77
11.40
71.4
Natural honey
3.67
2.91
- 4.5
Apples
Target markets
Major markets for imported products in India are the large metros such as Ahmedabad,
Chennai, Cochin, Bangalore, Hyderabad, Kolkata, Mumbai, New Delhi and Pune. There is
also significant demand in other cities such as Bhubaneshwar, Bhopal, Coimbatore,
Chandigarh, Jaipur, Lucknow, Nagpur and Vadodara and Vishakapatnam. It is also important
to target major tourist destinations that attract overseas visitors, such as Goa, Kerala and
Rajasthan. As imported food products are increasingly being used by four and five star
hotels, a separate strategy needs to be worked out to reach the decision makers in these
hotels.
10
Distribution dimension
The success of any export initiative depends on finding the right distribution partner; clearly,
in the Indian context appropriate due diligence needs to be carried out prior to the selection
of importers or appointment of distributors. In India, the business of importing food products
as well as their distribution is largely carried out by small and medium sized firms, usually
managed by their respective owners. The structure of these private owned firms would be
either incorporated as a private limited company, a partnership or a proprietorship. The
financials of these companies are not available in the public domain and hence, an exporter
needs to ensure that a secured payment mode is in place.
In the long term, some of the strategic options that can be considered are to establish tie-ups
with reputed partnersfor branded products, it might be worthwhile to explore tie-ups with
medium and large size Indian companies in the food sector. While co-branding will help the
Indian firms expand their product range, it will enable Western Australian products to gain
easier consumer acceptance and market share.
Promotional strategy
The long term marketing objective could be to establish brand Western Australia in the mind
of the Indian consumer and some of the options are:
Set up an India centric website giving details about Western Australian products and
where they are sold in India. Site visitors can be tracked and automated responses to
inquiries can be generated.
Buy databases of prospective customers such as hotels and send them direct mailers
with relevant details and promotional messages.
A limited advertising campaign to reach a larger audience and create awareness of

Western Australian products, may be attempted, subject to the availability of funding.
Taking part in major trade shows and expos in India, such as Food Pro and Aahar will
help in promoting the products and establishing direct contact with the potential
customers.
Point of sale promotional materials in the stores to attract customer attention, is an

inexpensive promotional tool in the Indian context; comments have been made by
distributors and retailers that promotional materials would help.
Organise annual meets in Western Australia for the top performers in the import and
distribution businesses.
Commercial aspects
As securing the payment is of high importance in the Indian context, it would be

preferable to operate with a confirmed and irrevocable letter of credit till the financial
credibility of the importer is established. According to the trade in India, while
processed food products are generally imported by opening a Letter of Credit (LC),
fresh fruits are usually sold on a Documents against Acceptance (DA) basis. Importers
very often demand supplies on a consignment basis, wherein the payment is made to
the exporter after selling the fruits in the market. However, offering unsecured credit to
Indian importers is fraught with grave risk
11
Effective consolidation of cargo at the Australian end can facilitate export as importers
do frequently face the problem of filling up a container load. Consolidation of cargo is
one of the most practical options to save on too many intermediaries and freight
charges, especially while developing and expanding in a new market. Consolidation of
cargo eases the cash flow issues at the importers end. While consolidation of cargo
from Australia has commenced, it needs to be more extensively adopted and this could
lead to a much faster growth of Australian export of food products to India.
To conclude, the Indian economy is expected to continue in its growth trajectory over the
next decade and will offer growing opportunities for marketing food products. As the
domestic food processing industry is not yet well developed, there is significant potential to
be exploited by processed food manufacturers elsewhere in the world. An entry into the
Indian market has to be carefully orchestrated to ensure that it is a win-win situation for all
stakeholders, viz Western Australian exporters, Indian importers, distributors, retailers and
most importantly the Indian consumer.
12
3. Overview of the Indian Agriculture and Food

Processing sectors
3.1 Agriculture
India has traditionally been an agrarian society and agriculture is a key sector of the Indian
economy. In the 1950s, the contribution of agriculture to the overall GDP was in the range of
51 per cent. However, growing emphasis on the industry and service sectors and changes in
the Indian economy has resulted in a drop in the proportion of the agriculture sector. Today,
agriculture contributes around 18 per cent to the GDP and accounts for about 15 per cent of
the total exports. Nearly 58 per cent of the population still depends on agriculture for a
livelihood.
India is home to a broad spectrum of flora and fauna and of the total geographic area of 329
million hectares, the cultivable land in India is about 167 million hectares. Indias favourable
climatic conditions and rich natural resources have helped India become the worlds largest
producer of a range of commodities such as coconut, banana, mango, pulses, cashew nuts,
ginger, turmeric and black pepper. Improved infrastructural facilities like refrigerated
transportation, cold storage and packaging and new technology like IT and biotechnology,
has helped the agricultural sector to develop more significantly in the recent years.
In terms of global farm output, India ranks second and is the second largest producer of rice,
sugar, wheat, cotton, fruits and vegetables in the world. In 200708, the production of food
grains in India grew by 6.2 per cent to reach 230.7 million tonnes.
Table 3.1 Food grains production, 200508 (million tonnes)
200506
200607
200708
208.6
217.3
230.7
Rice
91.8
93.3
96.4
Wheat
69.3
75.8
78.4
Food grains of which:
Source: CMIE
3.2 Indian food processing sector

The food processing industry is ranked fifth in terms of production, consumption, export and
expected growth. Major products of the food processing sector include:
processed fruits and vegetables;
meat and poultry;
milk and milk products;

marine products;
plantation crops;
processed grain;
bakery products;
alcoholic beverages;
high protein foods;
ready-to-eat, ready-to-cook and other convenience food.
13
Food processing in India is gaining equal importance as agriculture or any other industry and
is vital to the Indian economy as it acts as a linkage between manufacturing industries and
agriculture. Offering employment to around 1315 million people around the country, the
food processing sector contributes about 14 per cent to the GDP. In 200607, the food
processing sector was estimated at US$82.6 billion, growing at 13 per cent per annum.
However, when compared to some of the developed countries, the Indian food processing
sector is still in a nascent stage. For instance, the current level of fruits/vegetables processed
is around 23 per cent as against 80 per cent in USA, Malaysia and other developed nations.
Table 3.2 Indian Food Sector: Market size, 200607
Particulars
Food sector*
US$ billion
194.3
Food processing sector
82.6
Organised food processing sector
22.3
Includes fruits and vegetables, dairy products, fish and marine, meat and poultry, packaged foods, beer and
wine.
Source: Ministry of Food Processing Industries
In terms of employment generation, better price realisation for farmers, reduction in

agricultural wastage and improvement in quality, the food processing sector ranks way
ahead of other sectors of the Indian economy. The multiplier for the food industry is reported
to be much higher than other industries such as power and telecom. Therefore, the rapid
growth in the food processing industry has stimulated the growth of domestic market and
trade on the international front.
In order to boost the food sector, the Government of India has introduced the concept of
mega food parks in the country. Catering to the entire range of food processing activities,
food parks consist of groups of large, medium and small-scale food processing units.
Facilities such as cold storages, warehousing, power and water supply are provided by the
food parks, thus making it more affordable for small and medium scale units. The gap
between the farmers and industries have also been closed in with the help of food parks by
facilitating a firm buyback agreement between processing units located in the parks and the
farmers. Various food parks are being set up by the Ministry of Food Processing Industries
(MOFPI) across the country in states such as Andhra Pradesh, Tamil Nadu, Maharashtra,
Punjab and Jharkhand.
With better market orientation, food processing units are enabled to be cost effective and
also have auxiliary units such as printing, packaging, transportation agencies, etc. The table
below shows the number of food processing units in this industry.
14
Table 3.3 Number of units in the food processing sector

Food processing units
Huller rice mills
Modern rice mills
Fruit and vegetable processing units
Number
139 208
35 088
5 293
Flour mills
516
Sweetened and aerated water units
656
Sugar mills
429
Fish processing units
568
Meat processing units
171
Milk production units
266
Solvent extract units
725
Source: MCG Compilation
The food processing industry is dominated by the cottage industry sector, which accounts for
40 per cent of the total processed food market. The rest is shared by the small scale sector
and the organised players, each accounting for almost 30 per cent of the market share.
Small players in this industry have only a local or regional presence and use basic
technologies for processing the food products. Some of the well established brands in the
food processing industry include: Britannia Industries, Cadbury India Ltd, Pepsi Foods, ITC
Ltd, Nestle India Ltd, Parle Products Ltd, etc. A detailed list of some of the major players and
their products is provided in Appendix I.
3.3 Overview of production and consumption in major sectors

The food processing industry can be classified as primary, secondary and tertiary processing
based on the processing involved in the conversion of raw material to finished products.
While primary processing includes cleaning, grading, powdering and refining of agricultural
produce, secondary processing consists of value addition to the basic product. Products that
have passed through the final or tertiary stage of processing are the value-added branded
products that are ready for final consumption. Around 60 per cent of the food units in India
are engaged only in primary processing. The production base of secondary and tertiary
processed foods in India is relatively low, thus resulting in low value addition. Of the total
production, value addition to foods by processing is a mere 8 per cent and is expected to
increase to 35 per cent by the end of 2025.
A wide range of products comprise the Indian food processing industry as listed in Table 3.4.
15
Table 3.4 Major food processing sectors

Sector
Products
Fruits and vegetables
Pulps, concentrates, slices, frozen and dehydrated products, chips/wafers,

etc.
Meat and poultry
Frozen and canned products, egg powder
Fishery
Frozen and canned products
Dairy
Whole milk powder, skimmed milk powder, condensed milk, flavoured milk,
ice-cream, butter, ghee, cheese, infant milk food, malted milk food
Bakery products
Bread, biscuits, cornflakes, vermicelli, pasta, noodles, etc.
Confectionery
Chocolates, sugar candies, bubble gum, chewing gum
Beverages
Alcoholic and Non-alcoholic (tea/coffee, Carbonated Soft Drinks and

non-carbonated soft drinks)
Packaged/convenience foods
Ready-to-eat (jams, pickles/chutneys, ketchup, soup, snack foods) and

ready-to-cook food
3.3.1 Fruits and vegetables

Almost all varieties of fruits and vegetables are grown in India due to the diverse
agro-climatic zones in the country. India is today the worlds 2nd largest producer of fruits and
vegetables next only to China. The total cultivated area of fruits and vegetables is about 12
million hectares (7 per cent of the total cultivation area) and the country produced about
206 million tonnes in 200607, accounting for about 10 per cent of the global production of
fruits and 15 per cent of the global production of vegetables. The country witnessed an
increase of 22.7 per cent over 200506, which was around 167.9 million tonnes as shown in
Table 3.5.
Table 3.5 Production of fruits and vegetables (million tonnes)
Production
200405
200506
200607
52.8
54.4
69.7
Vegetables**
108.2
113.5
136.3
Total
161.0
167.9
206.0
Fruits*

* Includes Dry Fruits.
** Includes Roots and Tubers.
Some of the main fruits (accounting for 7580 per cent of the total fruit production) and
vegetables (accounting for 70 per cent of the total vegetable production) produced in India
include mango, banana, citrus, guava, apple, potato, brinjal, tomato, cauliflower, onion,
cabbage and tapioca.
While India stands first in the production of cauliflower, the country ranks second and third in
the production of onions and cabbages respectively. The production of onions stood at
8.3 million tonnes in 200708. Onions are used extensively throughout India, both as the
primary constituent as well as with other spices and vegetables.
India stands first in the production of bananas and in 200708 banana production was
estimated at 17.3 million tonnesa world market share of about 20 per cent. Bananas are
mainly consumed fresh in the country. However, the ripe fruit can be converted into an
extensive range of products such as pulp, powder and dehydrated strips, while the raw fruit
is generally processed into chips.
16
Mango on the other hand is known as the king of fruits and is found growing all over India. In
200506, the production of mangoes in India was estimated at 12.6 million tonnes, an
increase of 9.1 per cent over the previous year. This fruit is processed into a variety of
products such as pulps, juices, concentrates, squashes, jams and pickles. India is the sixth
largest producer and consumer of apples in the world and in 200506, the production of
apples stood at 1.8 million tonnes. Production of apples in India largely takes place in the
hilly Northern States of India and about 70 per cent of the crop is usually transported to and
sold in Indias largest wholesale fruit and vegetable market at Azadpur in Delhi. Most of the
apples produced in India are used for fresh consumption, with only small quantities used for
processing into products such as apple juice, jelly or jam.
Over the last few years, there has been a positive growth in the processed fruits and
vegetables sector, particularly in fruit juices and pulps, dehydrated and frozen fruits and
vegetable products, pickles, tomato produces, processed mushrooms, convenience
vegetable spices and curried vegetables. The installed processing capacity for fruits and
vegetables was valued at US$3.1 billion in 200607. Of the total processed fruits and
vegetables, about 36 per cent is contributed by the organised sector and the rest of the
processing is undertaken by the unorganised sector. While the organised sector largely
produces products like juices and pulp concentrate, the unorganised sector mainly
concentrates on the traditional areas of processed items like sauces, pickles and squashes.
3.5
3.1
3
2.5
1.7
2
1.5
1.1
1
0.6
1
0.5
0
2002-03
2006-07
Processed fruits & vegetables
Processed organised
Processed unorganised
Source: Ministry of Food Processing Industries

Figure 3.1 Market size and composition of the processed fruits and vegetables (US$ billion).
3.3.2 Meat and Poultry

Meat
According to the livestock 2003 census, India had a livestock population of 485 million, which
is one of the largest in the world. India has about 36 000 slaughter houses, 10 modern
abattoirs, 171 meat processing units, 7 bacon factories, modern pork processing units and a
number of small poultry processing plants.
India is the 7th largest producer of meat in the world and of the total world meat production of
285 million tonnes; India contributes to about 2.1 per cent. In 200607, the production of
meat in India stood at 6.1 million tonnes.
17
Table 3.6 Meat production, 200607 (million tonnes)

Item
200607
Bovine Meat
2.8
Pig Meat
0.5
Sheep and Goat Meat
0.7
Poultry Meat
2.1
Total
6.1
Source: Department of Animal Husbandry Dairying (DAHD)
When compared to other developed countries, the per capita consumption of meat is well
below average. In India, the per capita consumption of poultry meat stood at 1.9 kg, whereas
in the US it was 45.4 kg. While poultry, goat or lamb meat is largely consumed in the country,
buffalo meat production is linked closely to the production of leather, a sector in which India
holds the second position.
Processing plants for meat may be fully or partially integrated. International standards for
meat processing plants are laid out by the Office International Des Epizooties (OIE), Paris.
About 10 totally integrated processing plants conforming to these standards have been setup
in the country. These plants have rendering and effluent treatment plants and are certified
with ISO9002, HACCP (Hazard Analysis Critical Control Points) and SGS as prescribed by
OIE.
Poultry meat
Poultry meat is the fastest moving animal protein in the country and is considered the most
economical source of animal protein. India is the ninth largest producer of poultry meat in the
world. This sector has undergone a major change since the 1960s, from being a backyard
occupation to an activity of great commercial significance. In 200607, poultry meat
production stood at 2.1 million tonnes. Growth in urban population and an increase in per
capita income are some of the major factors that have contributed to the expansion of poultry
meat production. Private entrepreneurship and encouragement from the government are also
some factors that have influenced the growth in this sector.
In 1986, Western Hatcheries (part of the Venkateswara Group) were the first to set up a
poultry processing unit in India. Substantial investments have been made thereafter in areas
of hatching, breeding and processing, with poultry farmers rearing hybrid, high-yielding birds
with significant support in terms of veterinary health services and improved poultry feeds.
Today around 95 per cent of the total processed meat and poultry is contributed by the top
10 major players. Shalimar Super Foods, Venkateswara Hatcheries, Al-Kabeer, Godrej
Agrovet, Allanasons, Al Barkat Exports, Suguna Poultry, Mark International, Prabhat Poultry
and Vista Processed Foods are some of the major companies in the meat and poultry sector.
While the export of poultry meat stood at US$1.6 million in 200607, import of poultry meat is
almost nil in India. The main reasons for this include:
high price difference;

high import duties for certain products;
high cost of refrigerated transportation;

Indians prefer fresh meat than frozen/chilled meat.
18
Eggs
In terms of production of eggs, India ranks fifth in the world, producing about 51 billion eggs
per annum. The figure below shows the production trends of eggs in India over the last five
years:
60
50
39
40
51
46
45
40
30
20
10
0
2002-03
2003-04
2004-05
2005-06
2006-07
Source: DAHD
Figure 3.2 Egg Production Trends, 200207 (billion numbers).
When compared to developed countries, the per capita availability of eggs in the country is
very small. For instance, Indias per capita availability of eggs stood at around 42 numbers
per head per annum as against USA, Europe, Taiwan, Japan and Mexico, whose per capita
availability was 300, 280, 358, 346 and 304 nos. per head per annum respectively. Unlike the
developed countries, where eggs are an item of daily use, Indians have not completely
adapted to consumption of eggs. This is mainly because of a low consumer propensity to
make eggs a part of their daily diet and the lack of purchasing power in the lower income
segments.
3.3.3 Marine products

India is endowed with rich fishery resources due to its long coast line of over 8 000 km, rivers
and canals of 195 210 km and 2.2 million square km of exclusive economic zones. India
boasts of a great potential in fish and fish products and is among the top ten producers in the
world. The country is the 3rd largest producer of fish and 2nd largest producer of inland fish.
With a contribution of around 1.5 per cent to Indias GDP and 5 per cent to the agricultural
GDP, the countrys main marine products include: shrimp, fin fish, tuna, cuttlefish, octopus,
squid, red snapper, mackerel, ribbon fish, lobster, cat fish and prawns.
With a total production of 6.9 million tonnes, the market size of fish in 200607 stood at
US$8.4 billion. Since 200102, inland fish production has risen steadily with the additional
impetus given to salt water aquaculture in West Bengal, Orissa, Andhra Pradesh, Tamil
Nadu and Karnataka. The world average availability of fish is about 12.1 kg per annum, while
the per capita consumption of fish in India is around 4.7 kg per annum.
Table 3.7 Fish production, 200106 (million tonnes)
Year
Marine
Inland
Total
200102
2.9
3.1
5.9
200203
3.0
3.2
6.2
200304
2.9
3.5
6.4
200405
2.8
3.5
6.3
200506
2.8
3.8
6.6
200607
3.0
3.9
6.9
Source: DAHD
19
Processing provides an opportunity for marine products and exotic fish and today
conventional cleaning and cooking fish is slowly giving way to convenient products.
9
8
7
6
5
4
3
2
1
0
8.4
1.1
0.8
2002-03
2006-07
Market size
Processed fish & marine products
Source: Ministry of food processing industries

Figure 3.3 Market size and composition of fish and marine products (US$ billion).
Over the last 50 years a number of infrastructural facilities for processing of marine products
have been developed. With a number of processing plants, freezing units and cold storages,
the sea food processing sector provides employment to a sizeable population in the country.
Table 3.8 Sea food processing: Industry structure
Processing units
Unit
Qty
Processing plants
No.
473
Freezing units
No.
372
Freezing capacity
Tonnes per day
Cold storages
10,320
No.
504
Source: DAHD
A great deal of effort is being taken to transform India into a centre for processed sea foods.
All the coastal states have put up units to process fish, with Kerala having the highest
number at 124.
Table 3.9 Sea food processing units in select states
State
Kerala
124
Gujarat
55
Andhra Pradesh
52
Tamil Nadu
48
Maharashtra
41
West Bengal
37
Orissa
21
Karnataka
14
Goa
Source: DAHD
20
No. of units
Some of the key players in the industry are mentioned in Table 3.10.
Table 3.10 Major players in the marine and fish industry
Companies
Key products
Allanasons
Pomfrets, seer fish, squids, prawns and cuttle fish
ASF Seafoods
Seafood
Bells foods marine division
Crab, cuttlefish, shrimps, squid, fish octopus
Deep Sea Products
Marine products
IFB Agro Pvt Ltd
Pomfrets, crabs, prawns and sea food
Sea Sparkle
Octopus, squid, crabs and tuna
Sumero
Pomfrets, crabs, prawns and sea food
Source: Technopak

Dairy is one of the main contributors to the Indian food processing industry. In 200607, the
total market size of the dairy industry was valued at US$44 billion and is expected to reach
US$91 billion by 2015. The processed dairy sector accounts for a major share of the dairy
market at 73 per cent. Within the processed sector, the major contribution comes from the
unorganised sector in the form of sweets, homemade ghee, yoghurt, etc. However, the
organised sector of the dairy industry is growing faster than the unorganised sector.
Table 3.11 Market size of dairy products (US$ billion)
Category
200203
200607
Market size
35
44
Processed
24
32

24
25
19
20
15
10
5
0
2002-03
Processed organised
2006-07
Processed unorganised

Figure 3.4 Composition of dairy products (US$ billion).
From a milk deficient country in the early 1960s, India has today emerged as the worlds
largest producer of milk. Milk sales proved to be the most lucrative for the Indian dairy
market. The main factors behind this include: initiatives taken by the Operation flood
programs in organizing milk producers into cooperatives; building infrastructure for milk
21
procurement, processing and marketing and providing financial, technical and management
inputs by the Ministry of Agriculture and Ministry of Food Processing industries to turn the
dairy sector into a viable self-sustaining organised sector.
Table 3.12 Milk production and per capita availability, 200006
Year
Production
(million tonnes)
Per capita
availability
(gm/day)
200001
80.6
220
200102
84.4
225
200203
86.2
230
200304
88.1
231
200405
92.5
233
200506
97.1
241
200607
100.9
245
Source: www.indiadairy.com
In addition to fluid milk, milk in India is converted into an assortment of traditional milk-based
and other value-added products such as cheese, butter, yoghurt/curd, ice-creams and
flavoured milk, milk powder, condensed milk, baby food and a wide variety of sweets.
Table 3.13 Growth rates of milk and dairy products, 200607 (organised sector)
Products
Growth rate (%)
Liquid milkpackaged
510
Ethnic sweets
> 10
Milk powder
< 5
Ghee
5 6
Ice-cream
1214
Butter
810
Cheese
510
Flavoured milk
510
Condensed milk
< 5
Yoghurt
> 10
Source: DAHD
Of the total milk produced in India, about 35 per cent (in volume terms) is processed. While
the unorganised sector processes about 22 million tonnes per annum, the organised sector
(large scale dairy plants) processed about 13 million tonnes per annum. There are about 676
dairy plants in the organised sector run by cooperatives, private and government sectors
registered with the Government of India and the State Governments.
Some key players in the processed dairy sector are given in the Table 3.14.
22
Table 3.14 Major players, brands and products

Company
Products
Condensed milk
Nestle India Ltd
Baby food
Milk powder
Malted milk food
Milkfood Ltd
Ghee, ice-cream,
Glaxo SmithKline
Malted milk food

Milk, Butter, Ghee, Cheese, Ice-cream
Gujarat Cooperative Milk Marketing

Federation Ltd
Baby food
Milk powder
Cadbury India Ltd
Malted milk food
Heinz India
Malted food
Tamil Nadu Cooperative Milk

Producers Federation
Milk, Ghee, Ice-cream, Butter
Karnataka Cooperative Milk Producers

Federation Limited (KMF)
Milk, Ghee, Sweets, Butter, Curd, Ice-cream, Cheese, Milk Powder
Punjab State Cooperative Milk

Producers Federation Limited
Milk, Cheese, Ghee, Butter, Ice-cream, Sweets
Cheese
In 200708, the cheese market was estimated at US$244 million. In terms of volume, the
Indian cheese market was estimated at 54 000 tonnes. The consumption of cheese is
comparatively low, as cheese in India is a luxury, while in developed countries they are a part
of the daily meal. Mumbai with a market share of 30 per cent is the largest market for cheese
in India, followed by Delhi at 20 per cent, Kolkata at 7 per cent and Chennai at 6 per cent.
Amul, Britannia and Le bon International are the major players in the cheese market.
Consumers in smaller towns and rural areas prefer non-branded processed cottage cheese
popularly known as paneer. Most people prefer cheese in the form of paneer as they
receive fresh stocks everyday and it is also more economical when compared to branded
cheese. For instance, while branded cheese sells at US$45 per kilo, paneer sells at
US$23 a kilo. Some of the regional players selling cheese in the India are Vijaya, Verka and
Nandini.
Ice-cream
The market for ice-creams was estimated at US$265 million in 200607, growing at the rate
of 1214 per cent. However, the per capita consumption of ice-cream in India is relatively
low, when compared to developed countries. Per capita consumption of ice-cream is around
250 mL per annum as against 22 litres in the US, 18 litres in Australia, 14 litres in Sweden
and 5 litres in the UK. The ice-cream market is dominated by a few large players and a
number of regional players. The large players in the organised sector are restricted to large
metropolitan cities and in small towns and villages, there are thousands of small players who
produce ice-creams in their home backyard and cater to the local market. Major players such
as Amul, Hindustan Unilever (Kwality Walls) and Mother Dairy, have a significant presence in
the country. While Amul enjoys a 37 per cent share of the ice-cream market in India,
Hindustan Unilever has a market share of 9 per cent.
23
3.3.5 Confectionery
The confectionery market largely consists of chocolates, hard-boiled sugar confectionery,
toffees, gums, mints and lozenges, lollipops, fruit rolls, etc. In 200607, the Indian
confectionery market was estimated at US$0.6 billion, an increase of 12.8 per cent over the
previous year.
611
700
554
600
448
500
400
300
200
100
0
2004-05
2005-06
2006-07
Source: CMIE
Figure 3.5 Confectionery market, 200407 (US$ million).
The sales of hard boiled candies and toffees proved the most lucrative in the confectionery
market and in 2007; these sectors were valued at 40 100 tonnes, equivalent to a combined
market share of 35.9 per cent of the markets overall value. This was followed by the gums,
mint and lozenges sector, which was valued at 29 100 tonnes, equivalent to 13 per cent of
the confectionery market.
Hard Boiled
Candy
18%
Other
Categories
47%
Toffees
18%
Digestive
candies
2%
Lollipops
2%
Gum, Mint &

Lozenges
13%

Figure 3.6 Confectionery Market Segmentation: Share, by volume, 200607 (%).
Total Confectionery market: 223 500 tonnes
Though multinationals such as Cadbury, Perfetti Van Melle, and Nestle have a significant
presence in the country, the confectionery market in India is fragmented, with a number of
small players and a few large players and MNCs in the organised sector.
The confectionery sector in the country is a complex market, where factors such as
government policy, bulk sugar prices and mass-market distribution play a crucial role in
driving the volumes and sales. Unlike the global market, where confectionery sales rely
heavily on organised trade, in India, bulk of the sales come from small road side retail outlets
like paan shops and small stores. Small scale industries largely depend on the confectionery
24
sector supply intermediary inputs like printed wrapping materials, pet jars, corrugated boxes,
etc. Confectionery products are retailed to over 1 million outlets spread throughout the
country.
Chocolates
The organised chocolate market in India was estimated at US$0.3 billion in 200607 and in
terms of volume it was estimated at 35 700 tonnes for the same year. The per capita
consumption of chocolates in the country is 300 g as against 1.9 kg in developed countries.
With the urban population accounting for 70 per cent of the total chocolate consumption, this
market is growing at about 15 per cent per annum. Western India accounts for the major
market share for chocolates followed by North, South and East.
Table 3.15 Major types and brands of chocolates
Type
Brand
Moulded chocolates
Dairy Milk, Truffle, Amul Milk Chocolate, Nestle Premium, Nestle Milky Bar, Nestle
Classic, Chunky
Count lines
5 star, Perk, Kitkat, Picnic, Munch
Panned products
Gems (Panned products), Nutties, Marbles (Nestle)
The two major players who dominate the chocolate segment in India are Cadbury India and
Nestle. Cadbury leads the market with a share of 72 per cent, followed by Nestle at 25 per
cent and Amul with a share of 2 per cent. Other MNCs who have entered the market in
recent years and have gained significant market share are Perfetti India and Wrigley India. In
2007, a joint agreement was formed between Godrej Beverages and Foods Ltd and
Hersheys, Americas chocolate and confectionery giant, to manufacture and distribute
chocolates across India. Today, this new entity named Godrej Hershey Foods and
Beverages Ltd is slowly competing with Cadburys and Nestle.
3.3.6 Bakery products

The bakery products sector is one of the largest segments among the processed food
markets in India. In 200607, the annual turnover of bakery products, which includes bread,
biscuits, cakes, pastries, buns, rusk, etc. was estimated at US$0.9 billion. The bakery
industry is dominated by the small scale sector and has very few big players in the organised
sector. There are a total of about 2 million bakeries in India and some of the major players in
the organised sector include Britannia, Parle and ITC.
Breads and biscuits are the two main bakery products and together account for a total sales
volume of 69 per cent of the bakery market.
Others
28%
Cake
3%
Bread
23%
Biscuits
46%

Figure 3.7 Bakery Products: Market Share, 200506 (By Value).
25
Biscuits
Biscuits account for a major share of the bakery sectors output. In terms of volume, the
biscuit market was estimated at 1.7 million tonnes in 200708.
Table 3.16 Biscuits, production trends (organised sector), 200508 (million tonnes)
Year
200506
200607
200708
Biscuits
1.4
1.6
1.7
Source: Indian Biscuit Manufacturers Association (IBMA)
Biscuits are broadly categorised as glucose, milk based, marie, arrow root and other variants
such as cream, wafer cream, salt crackers, cookies, assorted, etc. The biscuit market which
was stagnant during the last four years has picked up momentum during 200708 and is
growing at the rate of 15 per cent pa. This growth is mainly on account of exemption from
Central Excise Duty on biscuits with MRP up to US$2.5 per kg.
In terms of per capita consumption of biscuits, India ranks relatively low. For instance, it is
only 1.8 kg as against 2.5 kg to 5.5 kg in South East Asian countries and European countries
and 7.5 kg in the US.
Across the regions, East India proves to be the biggest market for biscuits in India, followed
by North India.
East
28%
South
24%
North
25%
West
23%
Source: Indian Biscuit Manufacturers Association (IBMA)

Figure 3.8 Consumption of biscuits across regions (% share).
Over the last two years, imports of biscuits to India have not shown any significant growth
and have not affected production/sales of the Indian biscuit industry.
26
35000
30,400
26,856
30000
20,375
25000
20000
15000
10000
635
5000
940
1,399
0
2004-05
2005-06
Export
2006-07
Im port

Figure 3.9 Biscuit: Import and Export (tonnes).
In addition to the large number of local/regional players and a few big players, a large
quantity of biscuits are consumed at small roadside tea shops/stalls and are supplied by
small bakers. The high penetration of this sector into the rural market is primarily responsible
for this growth. There is almost a 5065 per cent penetration of biscuits in rural areas.
Lower-priced varieties are largely consumed in rural markets and it is here that branded
biscuits meet stiff competition from the unorganised sector.
However, in recent years, the biscuit industry has been getting more organised. Today out of
the total production, around 60 per cent is contributed by the organised sector and the rest
40 per cent by the local bakeries in the unorganised sector.
In the organised sector, Parle with a market share of about 38 per cent leads the biscuit
market, followed by Britannia, ITC and Surya Food and Agro Ltd (Priyagold). Some
international brands are now being imported into the market. However the volumes of these
brands are relatively small. The table below shows the major players and their respective
brands in the market.
Table 3.17 Major players and brands
Player
Brands
Britannia Industries Ltd
Tiger, Snax, 5050, Marie, Nice, Milk Bikis, Good Day, Pure Magic, Little
Heats, Bourbon, Treat, Time pass
Parle
Parle-G, Monaco, Krackjack, Supermilk, Hide and Seek, Chocolate Chips, Milk
Shakti
Surya Food
Priya Gold
Glaxo Smithkline Beecham
Horlicks, Boost
ITC
Sunfeast
HUL
FruitCream, Modern Energy

Global players
Player
Brands
Excelsior Foods
Kidz
United Biscuits
Mcvites, Hob-Nobs, Ginger Snaps
27
United Biscuits, UK is the second largest biscuit manufacturer in the world and has entered
the Indian market through their popular brand McVities Digestive brand. Biscuits from this
company are directly imported by the company and are available in nearly 12 000 retail
shops across the major cities of India. Other global players having a presence in India
include Nabisco, Arnotts and Sara Lee.
3.3.7 Packaged/convenience foods

The packaged/convenience foods sector had rapidly developed over the last decade mainly
due to increase in educated nuclear families with disposable incomes, change in lifestyles
and food habits and more working women preferring convenience foods. The
packaged/convenience food segment comprising of ready-to-eat and ready-to-cook food
products is highly fragmented with small players accounting for almost 75 per cent of the
output in terms of volume and 50 per cent in terms of value. While the ready-to-eat food
products comprise mainly of jams, pickles and chutneys, tomato based products (ketchup,
puree, soup) and snack foods (potato wafers), the ready-to-cook food products comprise of
cooking ingredients (pastes/masala powders), instant mixes (idli, dosa, jamun mix, etc.) and
instant cook and eat products (noodles, soup powder, etc.).
Jams and tomato based products (sauces/ketchups)

The fruit jam market was estimated at 26 700 tonnes by volume. The penetration of fruit jams
in India is very low at 3 per cent, with urban penetration in the country being 9 per cent and
rural penetration being 0.3 per cent. Kissan from Hindustan Unilever and Sil from Marico are
the most popular brands in the country. While Kissan (HUL) has a market share of 74 per
cent, SIL (Marico) accounts for a share of 11 per cent. Apart from these two brands, there
are a number of local brands in the market.
In 200506, the market for tomato sauce/ketchup was estimated at 30 500 tonnes. However,
the penetration of tomato ketchup in India is relatively low at 3 per cent, with urban
penetration being 9.2 per cent and rural penetration being 0.7 per cent. Hindustan Unilever
(HUL) with its brand Kissan and Nestle with its brand Maggi lead the tomato ketchup market
with a market share of 42 per cent each. Other brands such as Heinz account for the rest of
the ketchup market at 16 per cent.
Soups in India are primarily consumed by the upper income group of people and in 200607;
the organised soup market was estimated at US$11 million. Soups in the country are still
considered to be a small market and for its consumption to become a habit, companies need
to invest heavily in this sector. Knorr Annapurna, the brand marketed by HUL leads the soup
segment in the country. Nestle with its brand Maggi, entered this market in 1996 and
currently has a 20 per cent plus market share. Another big player to have entered the soup
market is MTR Food Ltd. Today this company offers flavours such as tomato soup, spicy
tomato soup, and spinach and carrot soup. HUL has also extended its Knorr Annapurna
range of soup powders with flavours such as Tomato Tease, Chicken Punch and Peppery
Chicken, Spicy Vegetable, and Sweet Corn Vegetable, etc.
3.3.8 Fruit juice/drinks

The organised fruit beverage market which includes nectars, drinks and juices is among the
fastest growing segments in the beverages category and was valued at US$0.3 billion in
200607, growing at annual rate of 25 per cent. While the fruit drink sector dominates the
market with a 77 per cent market share, the fruit juice and nectar sector accounts for 23 per
cent of the market.
28
The advent of liquid packaging cartons (Tetra Pak) has helped in increasing the sales of fruit
juices in India. The entry of large brands into the fruit juice market in Tetra Pak Packages has
had a good impact on the growth of this sector. Today, most of the leading brands have
introduced their products in tetra packages.
The fruit juice market in India is fragmented, with a number of small regional players and a
few large players in the organised sector. However, more than 90 per cent of the sales are
through the unorganised route such as juice centres, street corner shops, kiranas,
convenience stores, etc. Therefore juice manufactures generally tap the unorganised sector
more. In the fruit drinks, Parles Frooti leads the market, followed closely by Cokes Maaza,
Pepsis Slice and Godrejs Jumpin. Daburs Real and Pepsis Tropicana are the leaders in
the fruit juice segment, though Dabur enjoys an edge over Pepsis Tropicana in terms of
market share.
Table 3.18 Major players and their market share
Sector
Fruit Juices
Fruit Drinks
Brand
Market
share (%)
Real
60
Tropicana
33
Others
Frooti
38
Mazaa
35
Others
27

Table 3.19 Major players and flavours
Sector
Fruit drinks
Fruit Juice
Fruit Nectar
Company
Flavours
Parle Agro
Mango, Apple, Lime, Guava, Pineapple, Green Mango and Blended
Godrej Foods
Mango, Apple, Lime, Guava, Pineapple and Blended
Coco Cola India
Mango
PepsiCo Holdings
Mango
Dabur
Orange, Mango, Pineapple, Guava, Grape, Tomato, Litchi
PepsiCo Holdings
Apple, Orange, Grape, Pineapple, Guava, Mixed fruit
Parle Agro
Mango Strawberry, Banana, Peach, Chiku
Coca Cola
Orange
Dabur
Apple, Mango, Mixed Fruit, Cranberry, Orange
Godrej Foods
Litchi, Mango
3.3.9 Olive Oil

In India, the olive oil market was estimated at 2 300 tonnes in 200708 and is forecast to
reach 42 218 tonnes by 201213.
29
Table 3.20 Olive oil consumption and growth estimates, 20062012 (tonnes)
200607
200708
201011
201213
CAGR (%)
200712
Edible
750
1 410
24 000
40 000
95.2
Non-edible
750
890
1 540
2 218
20.0
1 500
2 300
25 540
42 218
79.0
Total
Source: Indian Olive Association
When compared to developed countries, the usage of olive oil in India is at a very small level.
However, this market is expected to grow in the near future as people are becoming more
health conscious these days. The growing middle class and more specifically the higher
middle class with spendable cash are driving the interest of olives and its products like olive
oil in the Indian market. India imports whole of the olive oil available in the domestic market
and prices of olive oil in the domestic market ranges from US$10 to US$25 per litre for
different grades. One of the major difficulties faced by importers, in the past, has been the
high import duty which is being levied as olive oil in India is considered a luxury product
compared to other edible oils. Spanish and Italian products are mainly visible in the olive oil
market in India.
3.4 Key drivers and trends

The processed food industry has evolved into a modern industry from a traditional,
small-scale production system. This industry today caters to the diverse needs and tastes of
Indian consumers. Over the last decade there has been a drastic increase in the demand for
processed food in India and some of the factors which have helped this increase include
rapid change in the lifestyle of Indians particularly urban dwellers, rise in disposable incomes,
increase in the number of working women, growth of nuclear and double income families,
increase in the number of jet setters, explosion of the information and communication sector,
etc. Other factors which have also helped in the growth of the food processing industry
include favourable demography and economic factors, stable democracy and raw materials
supply. Owing to factors such as increase in literacy rate, rapid growth in urbanisation, rising
per capita incomes, relatively cheap workforce, etc. there are significant opportunities for
developing vast underlying markets in the country. In addition to these factors, the
geographical location of India helps in giving it the competitive advantage of being able to
cater to major consumption centres.
Some of the key drivers of the processed food sector include:
expanding product variety;
improvements in the supply chain;

improvements in the food retail sector such as emergence of organised food retailing;
growing awareness of health and food safety;
upgrading and modernisation of food processing units;

enhanced packaging facilities;
increasing importance of food standards and labelling laws;

liberalised government policies such as 100 per cent foreign direct investment in the
key food segments, reduction in the excise duty, etc.;
emergence of niche market opportunities in exotic product categories;

increasing acceptance of India as a global sourcing partner;
30
increase in the demand for processed food has led to the rise in the share of processed
food in international trade. International trade also offers a large potential to increase
value-addition to a food product than unprocessed products.
Some of the emerging trends of the processed food sector are:
Greater demand for ready-to-eat and ready-to-cook food.
Increasing preference for western food.
Rise in the presence of multinational companies in the food processing sectors.
Increasing recognition of regional and foreign brands.
Increase in the number of mergers and acquisitions.
Emerging investment opportunities in infrastructure development, technology, testing

and inspection, marketing, packaging, etc.
Change in food consumption patterns. A shift is being witnessed towards the

consumption of higher value products across all income levels. A growing demand for
different food attributes which include health, safety, convenience and the manner in
which the food is grown is being witnessed in the country.
A large potential for imported products mainly among urban consumers. The factors
that have helped in increasing the awareness of imported products in India include
increase in overseas travel, rising income levels, international exposure, changes in
food habits, changes in spending patterns of consumers and the retail revolution.
3.5 Investment opportunities

The Indian processed food industry has seen rapid growth following the liberalisation of the
economy in 1991. Investment deals are now extending to the food processing sector which
has in turn helped it to get a higher share of foreign direct investment. The Indian food
processing sector attracted around US$7 billion of foreign direct investment (FDI) during April
2000 to March 2008, which was about 1.2 per cent of the total FDI inflow into India for the
same period.
Primary processors like grain-milling units over the years have dominated the food
processing sector. With the development and diversification of this sector, new investment
opportunities have been available in areas like canning, dairy and food processing.
Opportunities for building highly profitable businesses are largely seen in sectors such as
dairy, wheat and poultry. Some of the potential areas for investment opportunities include:
Mega Food Parks

Fruit and vegetable products
Meat products
Fisheries and seafood

Grains and cereals
Agriculture infrastructure, supply chain aggregation, logistics and cold chain

infrastructure
Packaged/convenience goods/ready to eat food
Wine and beer

Machinery/Packaging
31
4. Current status and trends in Indias imported food

sector
4.1 Current import scenario
Since the beginning of economic reforms, India has transformed itself on the global market.
Though still considered a developing economy, little remains the same in the Indian food
market. Globalisation and liberalisation have opened doors for the entry of imported food
products from across the globe. Gone are the days where one could purchase imported
products only when they travelled abroad. With the relaxation of the import policies, the
Indian market is flooded with products from across the world. From Washington apples and
Australian Kiwifruit to Swiss chocolates, French cheese and Italian pastas, almost all kinds of
imported products are available in the Indian market. Chocolates, cookies, juices, pasta,
olive oil, honey, sauces and salad dressings and certain fruits are the prime categories of
import. Growth of organised retailing, economic growth, rising income, urbanisation and
changing lifestyles have provided momentum to the imported food and beverage sector.
Over the years the quality of food consumed by Indians has also undergone tremendous
change. Indian consumers now have both the willingness and ability to try new products.
Urban residents are by and large the major consumers of imported food in India. The urban
populations have higher incomes when compared to their rural counterparts and spend over
40 per cent of their income on food alone. Apart from the urban elite consumers, hotels and
restaurants are the other major consumers of imported food products in India.
Imported food products are no longer restricted for sale in only select retail stores across the
country. Today almost all the stores ranging from small departmental stores to big retail
chains sell imported food products. The modern retail formats also have a big role in
boosting impulse purchase among customers. As a common practice, these imported
products find their way into the Indian market through importers who in turn supply to
distributors, local retailers, stores and other institutions. On a new product arrival, retailers
initially sell them on a trial basis and if the product is well accepted and sales pick up they
continue to stock more.
Imported products such as chocolates, juices and pastas have penetrated the Indian market
to such an extent that some of the foreign manufacturers are considering setting up
production units in India. For example: Kraft Foods International is considering manufacturing
Tang (orange beverage) in India. While the imported food products may not completely
replace the Indian brands, they will definitely serve as add-ons to the Indian brands.
4.2 Key drivers and trends
Urbanisation
Rapid growth in industrialisation and robust growth of the IT industry have paved way to
more employment opportunities and marked an increase in the concentration of people in
urban areas. In 2007 the urban population accounted for nearly 30 per cent of the total
population in India. With a large working population the need for convenience is on the rise
and as a result products that simplify urban lifestyles are high in demand. The consumption
pattern of these urban dwellers is also changing by the day with a clear shift of expenses
from basic to luxury products. It is this change in attitude and lifestyle that has boosted the
demand for imported food products.
32
Rising income levels
With higher disposable incomes the upper-middle income urban elites are an important
customer base for imported foods in India. Increasing incomes and personal freedom have
attracted young customers wanting to move away from traditional lifestyles. Rising affluence
of the middle income group has led to changes in eating and spending habits.
Exposure to global culture
With an increase in the number of jet setters, cable television and internet penetration
(60.7 per cent and 5.3 per cent respectively), more Indians are now on the lookout for
imported food products. International exposure is creating better brand awareness and
product knowledge resulting in easier penetration of imported products into the country.
People have also become more health conscious and hence prefer branded packaged food.
Retail revolution
Rising consumer spending, greater need for convenience and product variety and favourable
government policies have fuelled the growth of organised retailing in India, making it a land
of retail opportunities. Growing number of Indians now have the desire and ability to shop in
organised retail stores and buy quality products. This new retail environment has resulted in
the emergence of a large number of malls and modern supermarkets offering imported food
products greater visibility and shelf space.
Growth of specialty restaurants
The concept of eating out has caught on in India due to increasing number of nuclear
families, dual income families, increase in disposable income and willingness to experiment.
This has translated into the mushrooming of different types of cuisines from across the world.
Hotels and restaurants are therefore one of the major demand drivers of imported food
products.
Relaxing of import regulations
In a bid to boost the Indian food market, the Government of India relaxed its restrictions on
the import of food and beverages. Most of the products now fall under Open General Licence
(OGL) and Special Import Licence (SIL).
Free Trade Agreement between India and Australia
India and Australia have been negotiating a FTA that will mutually benefit both the countries.
The FTA will lower the trade barriers and create more trade opportunities for Western
Australian exporters.
4.3 Major segments of imported food products

Import of food products started off as a small time trade and has now become one of the
most highly traded segments. Growing at a CAGR of 23 per cent, Indias total import of food
products reached US$3.6 billion in 200708, up from US$1.3 billion in 200203. The import
of certain prime categories is given below in Table 4.1.
33
Table 4.1 Summary of import data, 200507

(Value: US$ million ; Quantity: tonnes)
S.
No.
200506
Category
Value
Fruits*
Vegetables
Fresh and processed meat
112.6
200607
Qty
Value
295 773
160.9
200708
Qty
364 192
Value
202.8
Qty
347 471
4.62
14 355
0.86
4 560
2.92
9 760
Fresh
0.45
90
0.33
39
0.74
115
Processed
0.86
324
0.81
379
1.8
672
22.38
12 127
24.08
10 526
33.99
13 575
Processed
0.95
229
0.55
180
1.22
293
Dairy products
7.97
3 133
23.61
12 565
14.58
3 804
Cheese
2.80
605
2.92
550
4.79
758
Whey
1.68
938
4.31
2 217
4.10
1 003
Milk and Cream
1.43
635
1.85
731
2.77
838
Butter
1.80
881
14.14
8 898
2.16
973
Yoghurt
0.08
60
0.18
116
0.28
123
Ice-cream
0.08
0.18
28
0.43
89
Butter Milk
0.01
0.03
24
0.06
20
Pasta
5.30
3 806
2.55
2 191
8.51
5 970
Confectionery
10.56
4 224
13.53
5 649
20.39
5 837
4.91
2 074
5.98
2 920
11.26
4 003
Juice
8.70
8 489
15.21
13 006
16.83
11 394
Jam
1.36
651
1.40
874
1.55
617
Sauce
4.38
3 235
5.55
3 862
11.40
8 065
Natural Honey
0.47
502
1.30
1 008
2.91
2 529
Olive oil
5.24
1 426
5.42
1 481
8.72
2 484
Fresh and processed fish

Fresh
Sugar confectionery
8
Processed fruits and

vegetables
Other food products
* Excluding nuts.
4.3.1 Fruits and vegetables

Although India is one of the largest producers of fruits and vegetables in the world, there is
still a considerable demand for imported fruits and vegetables in the Indian market. While
Indias import of fruits in 200708 was US$202.8 million, its import of vegetables was around
US$2.92 million during the same year. In the recent years imported fruits and vegetables are
being sold in a number of places ranging from carts to big retail chains. With the entry of
global retailers such as Metro and Wal Mart, India is likely to witness the entry of more
imported fruits and vegetables as most of the Indian varieties do not meet their global
34
standards. These firms procure from global distribution chains such as Hortifruti, thereby
minimising the cost of transportation and logistics without much increase in the operational
costs.
250
202.8
200
150
160.9
112.6
100
50
4.62
0.86
0
2005-06
2006-07
Fruits
2.92
2007-08
Vegetables
Figure 4.1 Import of fruits and vegetables (US$ million).
Fruits
Imported fruits have made successful inroads into the Indian markets and are well accepted
by the Indian consumers. From Chinese apples and Australian pears to Californian grapes
and South African oranges, almost all the varieties of imported fruits are available in the
Indian market. These fruits are now given equal shelf space as the domestic brands. Despite
being priced higher than the Indian varieties, the major selling points for imported fruits are
that they are well graded, attractively packed, have better taste and appearance and are
available almost throughout the year.
Apples top the list of fruits imported, accounting for around 26 per cent of the total fruits
imported. Nearly 37 per cent of the apples come from the USA, followed by China which
accounts for around 27 per cent of the total import of apples. Chile, New Zealand and
Australia are the other major sources for apple. It is worth noting that despite the long
distance and longer transit time, Chile has emerged as the third largest exporter of apples to
India.
Indias tariff on apples is not only the highest among the fruits it produces locally but is also
higher than the tariff on apples in other countries. Red Delicious (USA), Washington (USA),
Fuji (China) and ENZA (New Zealand) are some of the famous brands of imported apples
found in the Indian market. Rather than the brand names, these fruits are quite often known
by their countries of origin. Though apples have remained the core item of import, other fruits
such oranges, grapes, pears, plums are also imported. The market is also diversifying which
is evident with the arrival of other fruits such as strawberries, apricots, peaches, figs, kiwifruit
and so on. The demand is more in case of fruits that are not grown or easily available in
India.
35
Table 4.2 Major fruits imported, 200708 (US$ million)

S.
No.
Category
200708
Major source and share
52.96
USA (37.1%), China (27.6%), Chile (25.5%), New Zealand

(7.2%), Australia (1.8%), Others (France, Italy, South Africa)
Apples
Pears and Quinces
5.66
China (43.8%), USA (34.3%), South Africa (20.1%), Australia

(1.8%)
Grapes (fresh)
5.07
USA (67.5%), Australia (17.8%), Chile (7.7%), Others

(Mexico, South Africa, Peru, China)
Oranges (fresh or dried)
2.73
Australia (57.1%), South Africa (24.9%), USA (15.8%),

Others (Italy, China, Spain)
Plums and sloes
0.76
Italy (40.8%), USA (34.2%), Chile (13.2%), Australia (11.8%)
The peak season for imported fruits is during the off season for domestic crops. The peak
season for imported fruits is January to June. For instance, the peak season for imported
apples is February/MarchJuly and imported oranges sell more during JanuaryMarch. The
reason for lesser demand for imported products during the domestic harvest season is a
combination of really low domestic prices and relatively high import prices because of which
most of the importers avoid importing large quantities during such period. The demand for
imported fruits is high during festivals and especially social occasions such as marriages.
Often the imported fruits bear a paper seal carrying the brand name and the country from
which it is imported. These fruits are normally supplied in crates, with carrying capacity of
each crate depending on the size of the fruits. The price of these imported fruits normally
depends on the quality, brand and the country from which it is being imported. Being a niche
market, increase in prices normally does not affect the sales of imported fruits. These fruits
have an edge as they are stored in refrigerated conditions till they reach the wholesaler,
unlike the Indian fruits whose quality deteriorates quickly.
Table 4.3 Prices of select fruits and brands
Product
Apples
Pears
Grapes
Kiwifruit
Orange
36
Brand/variety
Country of origin
Retail price
(US$/Kg)
Red delicious
USA
2.4
Fuji
China
2.7
Washington
USA
2.9
Granny smith
Australia
3.7
ENZA
New Zealand
Shandong
China
1.7
CaliforniaRed
USA
6.2
AustraliaRed
Australia
Zespri
New Zealand
1.3
Naval orange
China
2.0
Valencia orange
China
1.3
2.02.2
6.26.7
Vegetables
Indias import of vegetables such as potatoes, tomatoes, cabbages and carrots is miniscule.
Most of the vegetables imported in 200708 were sourced mainly from the Asian countries.
Table 4.4 Major vegetables imported, 200708 (US$ million)
S. No.
Category
200708
Garlic
1.55
Pakistan (76.1%), China (23.2%), Lao

PDR (0.7%)
Brussels Sprouts
0.28
Nepal
Cabbage (Kohrbi, Kale and Brassicas)
0.12
Nepal
Potatoes
0.03
Bhutan
Root vegetables (carrot, turnip,

beetroot, etc.)
0.03
China
4.3.2 Meat and marine products (fresh and processed)

Meat
Indias import of meat is negligible. Meat products were imported to the tune of only US$2.54
million in 200708. The meagre import of meat can be attributed to two factors; government
restriction and the Indian mindset. Indian government has banned the import of certain meat
and meat products from countries with High Pathogen Avian influenza in 2007. Quality
certificate requirements are restrictive in the interest of safe guarding human health. High
cost of the imported meat products is also a hindrance to its growth. The other factor is that
most Indians still prefer fresh meat over frozen meat. In recent years the demand for canned
and ready-to-cook meat products is increasing, especially by foreigners and institutions.
Apart from few retail sales, the major demand for imported meat and meat products is from
the five star hotels, especially the ones with a large overseas clientele.
3
2.54
2.5
2
1.31
1.14
1.5
1
0.5
0
2005-06
2006-07
2007-08
Figure 4.2 Import of meat products (US$ million).
Among the meat products, the only significant import was swine meat which was valued at
US$0.29 million in 200708 and was sourced mostly from New Zealand.
Table 4.5 Major meat products imported, 200708 (US$ million)
Category
200708
Meat of swine
0.29
New Zealand
37
Marine products
As compared to meat, considerable amount of marine products are imported by India. In
200708 Indias import of marine products was valued at US$35.21 million. According to
MPEDA, Indias import of marine products is not meant for domestic consumption but is
mostly processed and re-exported.
35.21
40
23.33
24.63
2005-06
2006-07
30
20
10
0
2007-08
Figure 4.3 Import of marine products (US$ million).
Indias import of chilled fish, which accounted for around 64 per cent of the total marine
imports, was around US$21.76 million in 200708, with Bangladesh accounting for nearly
96 per cent of the total imports. Frozen shrimps, prawns, crabs, cuttle fish and tuna are some
of the other major marine products that are imported. While shrimps and prawns are mainly
imported from USA, China, Thailand, Germany and Australia; cuttle fish is mainly sourced
from Pakistan, Indonesia, Bahrain and Spain.
Table 4.6 Major meat and marine products imported, 200708 (US$ million)
S. No.
Category
200708
Major Source and share
21.76
Bangladesh (95.8%), Japan (2.1%), Thailand (0.6%),

Others (China, Netherlands)
Chilled fish excl fillets
Shrimps and prawns frozen
5.17
USA (17.2%), China (9.5%), Thailand (6.8%),

Germany (4.3%), Australia (1.7%), Others (Belgium,
Canada, Pakistan, Vietnam, New Zealand)
Cuttle fish
1.70
Pakistan (40.9%), Indonesia (15.3%), Bahrain

(10.6%), Spain (10%), Others ( Bangladesh,
Sri Lanka)
Crabs frozen
1.29
Japan (68.2%), Korea (31.8%)
Table 4.7 Prices of select brands of meat and fish products
Category
Meat products
Fish products
38
Brand
Country of
origin
Product
Pack size
Retail
price
(US$)
200 g
2.8
Zwan
Holland
Chicken cocktail
Keells
Sri Lanka
Chicken sausage
Al Kabeer
Dubai
Chicken sausage
500 g
3.2
TC Boy
Malaysia
Tuna in BBQ sauce
185 g
2.8
Farmland
USA
Tuna chunk in oil
185 g
2.2
John West
UK
Sardines in olive oil
120 g
2.2
1 kg
6.6

Dairy has been an attractive segment of import in India. But owing to the governments ban
on the import of dairy products from certain countries, the import of dairy products saw a
decline of nearly 40 per cent, from US$23.61 million in 200607 to US$14.58 million in
200708. However, the recent lift of the ban on Australian dairy products is likely to present
more opportunities to the Western Australian exporters and give the Indian consumers a
taste of whole new varieties of dairy products. The bound duty rate on skimmed milk powder
has also been bought down from 15 per cent to 5 per cent, thereby opening the Indian
market to dairy products from a number of countries including Australia.
23.61
25
20
15
10
5
0
14.58
7.89
2005-06
2006-07
2007-08
Figure 4.4 Import of dairy products (US$ million).
Cheese
Initially, imported brands of cheese were available only in metros such as Chennai, Kolkata,
Mumbai and Delhi and were bought mostly by expatriates. But now imported cheese is sold
in all the major cities and has gained wide acceptance among the Indian consumers. The
import of cheese reached US$4.79 million in 200708. Denmark, Netherlands, France and
Italy are the major sources of imported cheese and the well known brands include Kraft,
Happy cow, Laughing cow, Arla and President. With changing lifestyles, cheese has become
a part of most Indian food and is extensively being used with bread, fast foods, baked dishes
and so on. The Indian retail stores and customers are now moving beyond the regular
cheese spreads and slices and are trying new variants such as flavoured cheese, blue
cheese, etc. With growing health conscious consumers, the market is also witnessing an
increasing demand for low fat cheese. Though restricted mostly to the urban population, the
demand for cheese is unlikely to reduce, with children continuing to be the major consumers
of cheese products.
Whey, which is a by-product of cheese, is another major product of import which is sourced
primarily from USA, France and Denmark. Import of whey was valued at US$4.1 million in
200708.
Yoghurt
Indias import of yoghurt was around US$0.28 million in 200708, with Spain and France
being the major sources. Pascual continues to remain the most preferred yoghurt brand.
Flavoured yoghurt (mango, pineapple, strawberry, peach and passion fruit) and fat free
varieties have made a recent entry in India but are yet to establish themselves.
Butter
The Butter segment, whose import was valued at around US$2.16 million in 200708, is
mostly dominated by the Indian brands such as Amul and Britannia.
39
With a sharp fall in international prices, India is witnessing an increase in the import of butter
oil. Butter oil which is mostly imported from New Zealand, sells much cheaper than the ghee
sold in India.
Ice-cream
Consumption of ice-cream in India is growing at around 9 per cent per annum. With the
removal of the ban on import of ice-cream, Indian market is witnessing the entry of various
new brands such as London Dairy, Gelato Fresco and Baskin Robbins. Indias import of
ice-creams was valued at US$0.43 million in 200708, a huge jump from a meagre US$0.08
million in 200506. This segment is largely driven by the urban elite consumers who are
willing to pay a higher price for trying new varieties.
Table 4.8 Major dairy products imported, 200708 (US$ million)
S. No.
Category
200708
Cheese
4.79
Denmark (25.3%), Netherlands (22.8%), France (17.2%),

Italy (11.4%), Nepal (9.4%), Others (Singapore, Germany, Poland,
UK)
Whey
4.10
USA (47.6%), France (22.9%), Denmark (19.0%), Australia (5.8%),

Others (Malaysia, Switzerland, Singapore, Uruguay, Thailand)
Milk and cream
2.77
New Zealand (24.2%), Denmark (22.7%), Malaysia (15.5%), USA

(9.5%), Netherlands (8.3%), Others (UK, UAE, France, Bhutan,
China)
Butter
2.16
Nepal (88.4%), France (4.1%), Denmark (3.7%), Bhutan (3.2%),

Others (Malaysia, USA)
Yoghurt
0.28
Spain (46.4%), France (39.3%), Netherlands (7.1%), Germany

(3.6%)
Ice-cream
0.43
Switzerland (34.9%), UAE (32.6%), New Zealand (14.0%),

Australia (11.5%), France (7.0%)
Table 4.9 Prices of select brands and dairy products
Category
Yoghurt
Cheese
Butter
Ice-cream
40
Brand
Country of origin
Pack size
Retail price
(US$)
Pascuals
Spain
500 g
2.5
Happy Cow
Austria
140 g
1.4
Lehru Yere
Switzerland
198 g
11.5
Kraft
USA
200 g
12.9
Sporty Cow
Egypt
120 g
1.1
President
USA
113 g
6.5
Meadow Lee
Australia
500 g
3.2
President
USA
200 g
5.2
London Dairy
UK
500 mL
6.8
Ben n Jerrys
USA
475 mL
16.1
4.3.4 Pasta products

Pasta, a product which was unpopular in the Indian market till a few years back is currently
witnessing a growth of 2530 per cent annually. Driven by the rising popularity of Italian
cuisine and easiness of preparation, pasta has emerged as one of the most popular imported
food products. Import of pasta increased from US$2.55 million in 200607 to US$8.51 million
in 200708. The presence of only a few domestic manufacturers offers immense
opportunities for foreign pasta producers. Pasta is mostly bought by the urban elite and
upper middle income group. Apart from individual buyers, hotels and restaurants are the
major consumers of pasta in India. Of the various imported brands available in the Indian
market, Agnesi, San Remo and Barilla are the ones that are widely sold. Pasta is mainly
imported from Italy. Other exporters of pasta to India include Singapore, Argentina, UAE,
Thailand, Australia and Belgium.
10.00
8.51
8.00
5.30
6.00
2.55
4.00
2.00
0.00
2005-06
2006-07
2007-08
Figure 4.5 Import of pasta products (US$ million).
Table 4.10 Prices of select brands of pasta products
Brand
Country of origin
Pack size
Retail price
(US$)
San Remo
Australia
500 g
2.5
Barilla
Italy
500 g
3.9
De Cecco
Italy
500 g
4.0
4.3.5 Confectionery
Imported confectionery has been one of the early entrants in the Indian market and continues
to be one of the most sought after and widely available segments in the imported food
market. Import of confectionery has been constantly on the rise. While the import of
chocolate confectionery increased by 39 per cent from 200506 to 200708, the import of
sugar confectionery increased by 51 per cent during the same period. The market is flooded
with brands such as Toblerone, Mars, Lindt, Bounty, Snickers, Ferro Rocher, Foxs and so
on. These brands have gained popularity largely owing to their distinctive taste, attractive
packaging and extensive distribution network as a result of which they are found in small
departmental stores to big retail outlets. The sale of imported chocolates has become equal
or even outpaced the domestic brands in some of the retail stores.
41
25
20.39
20
13.53
15
10.56
10
11.26
5.98
4.91
5
0
2005-06
2006-07
2007-08
Sugar confestionery
Figure 4.6 Import of confectionery (US$ million).
Chocolate confectionery is primarily imported from China, Singapore, UAE, Malaysia, UK

and Switzerland. And China accounts for nearly 53 per cent of the import of sugar
confectionery followed by Malaysia, Thailand, UAE, USA and UK.
Table 4.11 Major confectionery products imported, 200708 (US$ million)
S. No.
Category
200708
20.39
China (16.6%), Singapore (14.7%), UAE (11.8%), Malaysia

(11.3%), UK (8.6%), Switzerland (8.4%), Netherlands
(8.2%), Others (Belgium, France, Australia, Indonesia,
Lebanon, Poland)
Sugar confectionery
11.26
China (53%), Malaysia (6%), Thailand (5.8%), UAE (5.8%),

USA (5.5%), UK (3.7%), Others (Korea, Indonesia,
Argentina, Australia, Turkey, Sri Lanka)
Table 4.12 Prices of select brands of confectionery products
Category
Chocolates
Brand
Country of origin
Pack size
Retail price
(US$)
Lindt
Switzerland
100 g
4.7
Vochelle Hazelnuts
Malaysia
205 g
5.6
Choco pie
South Korea
168 g
1.51.7
Ritter Sport
Germany
100 g
2.8
Snickers
USA
57 g
0.6
Toblerone
Switzerland
35 g
0.7
4.3.6 Processed fruits and vegetables

Changing food habits, increasing number of nuclear families and working women has
increased the demand for processed fruits and vegetables such as juices, ketchups/sauces
and dressings and jams. In 200708 the import of juices, sauces and jams was valued at
US$16.83 million, US$11.4 million and US$1.55 million respectively.
Juice
Health consciousness is the buzzword in the metros and other big cities in India, owing to
which the market is witnessing a gradual shift from carbonated to non-carbonated drinks.
This is driving the demand for fruit and vegetable juices in the country. In recent years, a
number of imported juices are found available in the Indian market and are preferred by
42
many. Diversity in flavours and attractive packaging is the key selling point for imported
juices. Tang, Tropicana, Ceres, Harvey Fresh and Ocean Spray are some of the popular
brands.
Sauce/ketchup
With rapid urbanisation and change in eating habits, ketchups/sauces have occupied a
substantial shelf space in the Indian retail outlets. While tomato sauce/ketchup is the most
popular, other sauces such as chilli, soya, pasta and garlic have also gained wide
acceptance. The growing demand for sauce/ketchup comes from both individual customers
as well as institutions such as hotels, restaurants and clubs. Heinz, Tabasco, Remia, Barilla,
Prego are some of the famous imported brands.
Jams
Indians have developed a liking for imported jams, largely owing to the wide range of flavours
that are usually not available in the domestic range. Urban upper income people and
hotels/restaurants are the major consumers of imported jam in the country. Dana, Hero,
St Dalfour are the popular brands in the jams category.
20.00
16.83
15.21
15.00
10.00
11.4
8.70
5.00
5.55
4.38
1.36
1.55
1.4
0.00
2005-06
Juices
2006-07
Sauces
2007-08
Jam s
Figure 4.7 Import of juice, sauce and jams (US$ million).
China, Brazil, USA, UAE and Malaysia are the major exporters of juices to India. China
accounts for around 31 per cent of the juice imports. Sauces are mostly imported from China,
USA, Netherlands and UK. No single country has a monopoly in the import of jams as they
come from various parts of the world such as Belgium, France, Australia, China, Turkey, and
UK.
Table 4.13 Major processed fruits and vegetables imported, 200708 (US$ million)
S. No.
Category
200708
Juice
16.83
China (30.8%), Brazil (12.1%), USA (8.8%), UAE (6.5%), Malaysia

(5.8%), Others (Israel, Spain, Thailand, UK, Bhutan, Bangladesh,
Germany)
Sauces
11.40
China (47.6%), USA (11.8%), Netherlands (6.1%), UK (5.2%), Malaysia

(4.4%), Argentina (4.5%), Others (UAE, Thailand, Singapore, Japan,
Israel)
Jams
1.55
Belgium (13.5%), France (12.3%), Australia (11.6%), Germany (8.4%),

China (8.4%), Others (Thailand, Turkey, UK, Italy)
43
Table 4.14 Prices of select brands of processed fruits and vegetable products
Category
Brand
Juices
Sauces/Ketchups
Country of origin
Jams
Retail price
(US$)
Tampico
USA
2L
3.0
Harvey Fresh
Western Australia
1L
2.3
Ocean Spray
USA
926 mL
5.0
Ceres
South Africa
1L
4.9
Tang (jar/pack)
USA
750 g
3.0
Remia
Amsterdam
260 mL
2.4
Barilla
Italy
190 mL
4.3
Tabasco
USA
60 mL
2.13.1
200 mL
3.0
Ongs
Dressing
Pack size
Remia
Amsterdam
250 mL
2.4
Dana
Denmark
340 g
3.0
St Dalfour
Australia
284 g
4.9
Mackays
Scotland
340 g
4.6
4.3.7 Others (honey and olive oil)

Honey
For over decades honey has been extensively used in India owing to its medicinal properties.
The honey market in India is dominated by the domestic brands. Dabur is the market leader
followed by other brands such as Sanjeevani, Nectar Fresh, Lion Kashmir Honey and so on.
Apart from the domestic market, the market for imported honey is growing rapidly in the
country. Indias import of natural honey was valued at US$2.91 million in 200708, up from
US$0.47 million in 200506.
3.5
3
2.5
2
1.5
1
0.5
0
2.91
1.3
0.47
2005-06
2006-07
2007-08
Honey
Figure 4.8 Import of natural honey (US$ million).
China is the largest supplier of natural honey to India and accounts for around 83.5 per cent
of Indias total import of natural honey. Nepal, Germany, USA, UK and Australia are the other
major exporters of natural honey to India.
44
Table 4.15 Import of honey, 200708 (US$ million)

Category
200708
Natural honey
2.91
China (83.5%), Nepal (4.8%), Germany (4.1%),

Others (USA, UK, Australia, France, UAE)
Apart from competition from the domestic brands, another deterrent to the import of honey is
the high duty rate. Some of the imported brands occasionally seen in the Indian retail stores
are Wescobee and Capilano from Australia and Airborne from New Zealand.
Table 4.16 Prices of select brands of honey
Brand
Country of origin
Pack size
Retail price
(US$)
Wescobee
Australia
500 g
3.3
Capilano
Australia
500 g
8.0
Dana
Denmark
454 g
6.7
Olive oil
Olive oil is another product that has gained immense popularity in the recent years, largely
owing to the new obsession towards nutritious food and growing popularity of Italian food. In
the past olive oil was used only for cosmetic purposes in India, but is now being promoted as
a healthy substitute for the cooking oil used in the country. Indias demand for olive oil is by
and large met by imports. Riding on high health benefits, the import of olive oil rose from
US$5.24 million in 200506 to US$8.72 million in 200708. Its consumers are restricted to
higher income urban Indians and big hotels as it is nearly four times expensive than the
cooking oil used otherwise. Figaro and Leonardo are the popular brands sold in India, with
the 250 mL and 500 mL pack sizes being the most preferred. Some of the other brands
available include Borges, Filippo Berio, Olitalia, Colavita and Evooroo.
8.72
10
8
6
5.24
5.42
4
2
0
2005-06
2006-07
2007-08
Olive oil
Figure 4.9 Import of olive oil (US$ million).
Nearly 90 per cent of olive oil comes from Spain and Italy. The Spanish government in
particular, takes special interest in increasing the sales of olive oil in India by educating the
consumers about the health benefits of olive oil. For instance, Figaro olive oil is promoted in
various exhibitions, road shows, distributing pamphlets with details of Figaro olive oil, direct
marketing and effectively using the word of mouth publicity. Turkey, Argentina, Greece, UK
and Australia are the other exporters of olive oil to India. The recent reduction of the
import duty rate on olive oil to zero per cent will be a big advantage to Western
Australian exporters.
45
Table 4.17 Import of olive oil, 200708 (US$ million)

Category
200708
Olive oil
8.72
Spain (47.1%), Italy (42.1%), Turkey (7.9%), Others

(Argentina, Greece, UK, Australia)
Table 4.18 Prices of select brands of olive oil
Brand
Country of origin
Pack size
Retail price
(US$)
Figaro
Spain
1 litre
13.0
Borges
Spain
1 litre
17.8
Filippo Berio
Italy
1 litre
18.0
Olitalia
Italy
500 mL
7.0
Colavita
Italy
500 mL
11.4
Evooroo
Australia
500 mL
10.6
4.4 Challenges faced

Despite gaining wide acceptance in the Indian market, the market for imported foods
continues to face certain hurdles. Some of the challenges faced are the following:
Despite a gradual increase in the demand for imported products, the market is still
relatively small as the demand for such products is mainly from the upper income
groups; however, this is anticipated to change as incomes increase in line with Indias
economic growth.
The prices are forced to remain high owing to the high import duties ranging from 20
per cent to over 60 per cent.
Lack of consistent supplies of brands is another major issue faced by retailers in India.
Very few importers deal with particular brands for a long period of time. Most of them
buy products that are fast moving and shift to other brands or products in a short span
leaving the Indian consumers to remain one time buyers of most imported products.
A number of imported food products do not adhere to the basic guidelines of the
Prevention of Food Adulteration (PFA) Act such as stating the vegetarian and
non-vegetarian symbols on the package, spelling out the manufacturing and expiry
dates, not giving directions for use and other information in English and so on.
The high cost of transportation is another major bottleneck.
Infrastructure challenges such as lack of sufficient cold storages, poor development of

ports and related infrastructure in India is a hindrance to the import of food products,
especially the ones with a shorter shelf life.
Adherence to the various food laws prevalent in India, especially the ones related to
labelling requirements, packaging, use of colours and additives, shelf life, sanitary and
phytosanitary requirements, is also a cause of concern among the importers.
46
5. Overview of the food retail sector in India

India is the fifth largest retail destination globally and is rated as the second most attractive
emerging market for retail investments in the 2008 Global Retail Development Index (GRDI).
Retail is one of the fastest growing sectors in the Indian economy and the country is
witnessing the launch of a large number of malls, supermarkets and departmental stores.
The retail industry accounts for about 35 per cent of Indias GDP and employs around 21
million people.
5.1 Growth of retail in India
$ Billion
At over 12 million, India has one of the largest number of retail outlets in the world. There is
one retail outlet for approximately 90 people in India. The available mall size of about
30 million sq feet is expected to increase to 100 million sq. feet by 2010. The total retail
market was valued at US$335 billion in 2008 of which organised retail accounted for only
US$25 billion. However, organised retail is forecast to increase to at least 12 per cent of all
retail sales by 2010.
45 0
40 0
35 0
30 0
25 0
20 0
15 0
10 0
50
0
211
2004
272
23 3
13
18
2006
2007
9
2005
301
O rganis ed reta il
3 35
25
2008
372
4 10
36
52
2009*
2010*
Retail ma rket
* Estimates.
Source: India Retail Forum
Figure 5.1 Retail market in India (US$ billion).
Food and grocery is one of the largest segments of the retail industry and also the least
organised. Food and grocery account for almost 60 per cent (US$180 billion) of the total
Indian annual retail business. Food retailing takes place largely through small neighbourhood
stores and organised food retail accounts for a small share at present. However organised
food retail is growing at about 2530 per cent per annum.
47
Others
26%
Jewellery
5%
Food &
Grocery
59%
Clothing &
textile
10%

Figure 5.2 Retail market by sector, 2008 (%).
Market size: US$335 billion
Others
47%
Food &
Grocery
12%
Jewellery
3%
Clothing &
textile
38%

Figure 5.3 Organised retail market by sector, 2008 (%).
Market size: US$25 billion
5.2 Evolution of food retail in India

Weekly village market
Convenience stores
Department stores
Supermarket/Hypermarket
Food retailing has come a long way in India-from a time when food items were sold in small
roadside grocer push-carts, to a stage where food products are retailed in supermarket
shelves. From simple trading activity, food retailing is now graduating to a status of an
industry. The demand for imported fruits and vegetables has significantly increased in India.
Importers bring in off-season fruits and vegetables, as well as exotic horticultural products
like asparagus, artichoke, certain varieties of mushroom, etc. Washington and Red Delicious
apples from the United States, pears from China and grapes from Australia are some of the
horticultural products that are imported into India. These fruits are not only sold through retail
food chains like Food World, Nilgiris, etc. but also through small grocery stores, convenience
48
stores and even through street side vendors. Also, there is significant demand for imported
food products like pasta, sauces, preserves, chocolates, beverages, etc.
5.3 Retail models in India: Current and emerging

The Indian food retail market is characterised by several co-existing types and formats. The
traditional formats of small stores co-exist with modern retailing formats with the latter
expanding much faster. These include:
Table 5.1 Small convenience stores (Kirana stores) and hawkers
Type of store
Description
Street-side vendors and pushcart vendors
These vendors usually roam from place to place and sell fresh
fruits and vegetables.
Paan shops
Street-side shops that mainly stock tobacco products like

cigarettes and chewing tobacco, betel leaves, beverages and
select items of biscuits, confectionery, and snack foods.
Public Distribution System shops
Controlled by the respective State Governments, these shops

sell only unbranded grocery items.
Kirana stores (Indian equivalent of the

Mom n Pop stores or the 7 Eleven stores)
These are usually small to medium food retail outlets selling

milk, grocery, beverages as well as a host of personal-care and
household products.
Unorganised and semi-organised retailers like kirana (convenience stores) and grocers are
characterised by buying from the mandis or the farmers and selling from fixed structures.
Economies of scale are not yet realised in this format, but the front end is already visibly
changing with the times. The advantage of this format of stores is that the vendor often
knows his customers personally and door-delivers the products.
5.3.1 Organised retailers

Table 5.2 Types of organised retailers
Type of store
Example
Hypermarket
Big Bazaar, Trent
Supermarket
Food World, Spencers Daily, Reliance Fresh, More
Department store
Lifestyle
Speciality chain
Spar
Discount chain
Subhiksha
Cash N Carry
Metro
Petro conversions
In and Out, Shell
To be successful in food retailing in India essentially means to draw away shoppers from the
roadside hawkers and convenience stores to supermarkets. This transition can be achieved
to some extent through pricing, so the success of a food retailer depends on how best he
understands and gets the maximum out of his supply chain. The other major factor is that of
convenience of shopping and ambience, an area where the supermarket has an edge over
traditional convenience stores. On an average, a supermarket stocks up to 5000 to 7000
units against few hundreds stocked at an average kirana (convenience) store. With the entry
49
of large corporate houses like Reliance, Bharti, etc. and with the large scale expansion plans
of Spencer, Food World, etc. this modern format of food retail is expected to have a wide
reach.
5.4 Growth in imported food

An average urban Indian spends a significant portion of his income on food, and with food
consumption increasing by about 10 per cent each year, food retailing is gaining popularity in
India. One of the key factors driving this sector is changing food consumption patterns,
others being better infrastructure, increasing disposable incomes, increasing exposure to the
outside world, etc.
Changing lifestyles and the boom in organised retailing have resulted in a growing demand
for imported food and beverages in India. The market for such specialty foods is growing
briskly.
With the relaxation of import regulations, many business houses such as Godrej, Reliance
and Pantaloon have moved into the market by opening specialty food stores and sell
imported foods such as cheese, pasta, cookies, olive oil, chocolates, dried fruits, sauces and
cereals. Other factors behind the growing popularity of imported foods are rising incomes
and increased foreign travel. Speciality hotels and multi-cuisine restaurants have also fuelled
the demand for exotic imported food ingredients.
Some examples to illustrate the growth of imported food:
25
$ million
20
Chocolate
Confectionery
15
10
Olive oil
Pasta
5
Cheese
0
2005-06
Cheese
Pasta
2006-07
Chocolate Confectionery
2007-08
Olive oil
Figure 5.4 Growth in imported food, 200508 (US$ million).
Almost all food retail stores in India devote significant amounts of shelf-space for imported
products. This varies from 10 per cent to as high as 40 per cent in stores such as Nuts and
Spices.
50
5.5 Profile of food retail stores in India

Table 5.3 Profile of select retail stores
Supermarkets
Foodworld
No.
stores
Imported
food as a %
of total
food sales
Type of products
South India
Bangalore,
Hyderabad and
Chennai
10%
< 2%
Grocery, food, beverages

and other household
products.
Across 13 states and

57 cities
10%
< 2%

and other household
products.
1015%
10%
Grocery, food, beverages,

personal care and other
household products.
66 cities all over India
10%
5%
Multi-format stores.
Spencers Hyper
Grocery, food, beverages,
personal care, electrical
and electronics and other
household products.
Spencers Daily
Convenience store
format.
Bangalore
34%
Food, beverages and

other household products.
13
Chennai and
Hyderabad
65%
Food, beverages and

other household products.
Food bazaar
Across India
5%
2%
Crossroads
North India
25%
35%
Reliance Fresh
Nilgiris
Spencers Retail
Fabmall
Nuts and Spices
67
Location
% of shelf
space for
imported
food
590
87
400
15 cities in South
IndiaTamil nadu,
Kerala, Andhra
Pradesh nad
Karnataka

and other household
products.
51
6. Distribution structure, logistics and infrastructure

development
6.1 Introduction
Distribution systems are reasonably well developed in India. The country has an extensive
rail and road network as well as good connectivity by air.
Table 6.1 Transport infrastructure in India
Mode of transport
Description
Road
3.34 million km of road length, with 66 754 km of national highways
Rail
7 100 railway stations, total route length of over 63 465 km and 795 million tonnes of
freight traffic
Port
12 major and 200 minor and intermediate ports
Airports
Over 20 international airports and several domestic airports
Good infrastructure and cold storage facilities are available in the large metros as well as
most of the tier II cities. India has over 12 million retail outlets, comprising both small kirana
type stores (convenience stores, the Indian equivalent of Mom and Pop store or the
7 Eleven) and medium-sized and large super market chains. While sales through large
organised formats constitute the bulk of the food consumption across the world, its share in
India is still small. However, the share of organised retailing in terms of total retail sales is
increasing briskly.
6.2 Distribution structure

The importers usually appoint city specific or regional distributors to deliver the products to
the retail stores. A few intermediaries may be needed before the products reach the retail
chains. The channels of distribution vary based on the type of products concerned.
6.2.1 Horticultural products

The demand for imported fruits and vegetables has significantly increased in recent years in
India. Importers bring in off-season fruits and vegetables, as well as exotic horticultural
products like asparagus, artichoke, certain varieties of mushroom, etc. Granny Smith and
Red delicious apples from United States, pears from China, grapes from Australia are some
of the horticultural products that are imported into India. The distribution structure for these
products largely follows the following pattern:
Distributor/
Wholesaler
Importer
Cold
storage
Figure 6.1 Distribution structure for horticultural products.
52
Retailer/Institutional
buyers like hotels
After port clearance from the port or airport, the importer stores the cartons of fruits and
vegetables in a cold storage facility. Usually the cold storage is rented, although some
importers have their own warehouses equipped with cold storage. Distributors or wholesalers
buy a certain quantity of cartons on a daily basis from the importer and sell them to retail
stores. Distributors usually do not own or rent cold storages and warehouses. They obtain
the required quantity of fruits and vegetables on a daily basis from the importer and supply to
the retail chains. However, certain established retail chains may procure the imported
horticultural products directly from the importer, provided they buy a certain minimum number
of cartons. Five-star hotels and agents for premium caterers usually buy directly from the
importer.
Horticultural products are usually imported in 40 containers, containing 13001500 cartons
with each weighing 1520 kg. If fruits or vegetables perish before the stipulated time, the
importer sends photographs to the exporter and they usually replace the fruits. The imported
fruits season is usually from January to June and the Indian fruit season spans the rest of the
year.
A particular importer from Delhi has the following SKU maintained:
Table 6.2 SKU maintained by an importer
Fruit
Source
SKU per month
Grapes
Australia
50100 boxes
Apples
China
50200 boxes
Kiwifruit
Italy
1501000 boxes
Guava
Thailand
500 boxes
Pear
China/USA
50200 boxes for 3 months
An example: Apples
Red delicious apples are imported from United States and arrive at an Indian port, usually
the Chennai or Mumbai port. Each carton weighs about 20 kg and a typical importer imports
about 2001000 cartons. After completing the required formalities at the port, the importer
transports the cartons to a cold storage facility. Many distributors or wholesalers purchase a
minimum of 20 cartons each day from the importer. They transport the cartons of fruit from
the cold storage to retail chains and stores using vans and trucks. Distributors in nearby
cities such as Madurai, Coimbatore, and Bangalore transport the cartons by road in ordinary
vans or trucks. Generally, if the distance is greater than 400 km, refrigerated vans are used.
Some big retail outlets buy directly from importers.
6.2.2 Frozen meat/fish and cheese/butter

Seafood such as shrimps, prawn and frozen meat and several varieties of cheese are
imported into India. These products require a cold chain throughoutfrom the time of landing
in the port until they reach the end-user. The distribution structure is as follows:
Distributor/
Wholesaler
Importer
Cold
storage
Retailer
Cold chain
Figure 6.2 Distribution structure for frozen meat/fish/cheese and butter.
53
After clearance from the port authorities, the importers transport the products in refrigerated
vans to their cold storage units (owned or rented). The distributors then procure the required
quantities of meat or other products and supply them to retail outlets. Transportation of these
products is very critical. At every stage, refrigerated vans or trucks with freezer boxes are
used. Retail stores have freezers and display counters maintained at low temperatures. The
special vehicles are mostly leased out to the importers and distributors by the independent
service providers. Speciality ingredients like cheese, frozen meat products and sea food are
also directly purchased from the importer by hotels and big food retail chains.
An example: Cheese
Several varieties of cheeseedam, gouda, blue, brie, ricotta, etc. are exported to India from
all over the world. Some of the major importers of cheese in India are:
L-Comps (Delhi based)
Epicure Foods (USA based)

Fortune Foods (Mumbai based)
These importers currently import about 3040 tonnes of cheese every month. About 75 per
cent of the imported cheese is consumed by the five-star hotels. Once the consignment
lands at Nhava Sheva port near Mumbai, cheese boxes are transferred to cool containers
where the temperature is maintained between 2C and 8C. Import duty is 31.209 per cent
and retailer margin is around 3040 per cent. Apart from this, after factoring in logistics and
other overhead costs and value added tax the final price of cheese at retail outlets works out
to about US$10 for a 200 g cube of any famous brand.
6.2.3 Processed food products (chocolates/pasta/jams/preserves)

A wide range of processed food, chocolates, etc. are imported into India. The distribution
structure of these products is as follows:
Within the port cities (Chennai, Mumbai, Ahmedabad, etc.) the distribution structure is as per
Figure 6.3:
Retail chain
Importer
Figure 6.3 Distribution structure for processed food products within port cities.
Outside the port cities the distribution structure is as per Figure 6.4:
Importer
Distributor
Retail chain
Figure 6.4 Distribution structure for processed food products outside the port cities.
In the port cities of Chennai, Mumbai, etc. after the products arrive, the importer usually
supplies them directly to retail chains and stores. He may use his warehouse or cold storage
facility if needed. Several regional distributors are appointed to reach the products to nearby
cities. The distributor in turn sells the products to retail stores in his region. In this case, both
the distributor and importer have either own or rented warehouses. Normally, cold storage or
special refrigerated vans might not be required for these products.
54
6.3 Hotels and restaurants

Hotels and restaurant chains usually buy more of imported food products based on the
demand and during the festival season (October to March). For instance, imported meat in
Leela Palace is used only for parties and special occasions. Hotels and restaurant chains
usually buy directly from the importer or distributor. They usually maintain an inventory period
of about a month. Some hotels however prefer to source directly from the manufacturers.
Some hotels imports meat products directly from Australia, Singapore and Germany.
Products such as confectionery are sometimes bought from retail stores. Some hotel chains
have a centralised purchasing system in place. Ista Hotels, Delhi handles the purchase of all
imported products and then dispatches them to its branches in Bangalore and Hyderabad.
6.4 Logistics
Managing the transportation and logistics costs has become increasingly strategic and
complex for the importers and distributors. Niche solutions designed to meet specific
challenges and issues of the food sector by logistics service providers (LSPs) are not only
critical for the sustained growth of the sector but also form the core service infrastructure of
modern food retail.
Container handling facilities are available at most major ports in several cities, but
refrigerated warehousing and transportation facilities are limited and expensive. All these
pose significant challenges to importers of food products in India.
6.5 Physical distribution structure

After obtaining clearance from the ports, the importers generally transport the goods to
warehouses located near their central operations. Supplies are then transported to
distributors in their respective locations. The distributors in turn transport the products to the
supermarkets/retailers. The distributor usually delivers the goods twice a week. Most
supermarkets have an inventory of about one week to 15 days. Once an order is placed, the
distributor delivers the products the next day. However, some supermarkets prefer to source
certain products directly. For instance, Food World imports the confectionery Ferrero Rocher
directly from the manufacturer. Metro Cash N Carry has a base of 743 registered suppliers
from all over the world and also imports directly.
Clearance of a consignment at a port in India takes about 710 days. If the importer is not
based in the same city as the port of landing, further delays occur due to domestic
transportation. Cross transportation from one state to another ranges from one week to two
weeks.
The importer/distributor generally has the necessary infrastructure including the cold storage
and dry storage facilities and a distribution network in place. The importer/distributor may
outsource the cold storage and other aspects of logistics to Logistics service providers (LSP).
Major importers who operate in many parts of India usually have warehousing facilities in a
few cities. Distributors in different regions are fed from these warehouses using a hub and
spoke distribution system for outer regions. There are many large and small logistics
companies that transport dry goods. However, vans and trucks equipped with refrigerated
containers are costly and not very prevalent. Snowman and Radhakrishna Foodland are the
biggest and most sophisticated operators in India of cold chain services.
55
Brand promotions
Often, the importers are responsible for brand promotion and advertisements. Sometimes,
the producer may assist the importer in brand promotions. Normally incentives such as cash
discounts are given to the distributors to popularise the brand. Sampling of the product,
in-store promotions and displays in retail stores are some measures to promote the product
among the end-users.
6.6 Cold storage

A significant share of Indias cold storage facility is used for storing fruits and vegetables.
Cold storage and deep freezers are also required for processed meat, marine products, milk
products, etc. Importers usually outsource cold storage and cold chain services to service
providers.
Some cold storage units are completely used to store horticultural products while some are
completely used for frozen fish and meat. A few combination cold storage units are also
available.
Some of the cold chain service providers in India include:
Snowman (Bangalore, operates in ten metros)
Radhakrishna Foodland Ltd (Kalamboli, Mumbai)
Salva Food and Cold Storage Pvt Ltd (Mumbai)
Delhi Cold Storage (Delhi)
A comprehensive list of cold storages in India can be found at

http://india.gov.in/outerwin.php?id=http://agmarknet.nic.in/coldstorage.htm,
The average cold storage tariffs of select products are provided in Appendix II.
A typical example: Radhakrishna Foodland
Radhakrishna Foodland has established one of the largest cold storage facilities near
Mumbai. The unit has a storage capacity of 5 million cases (4 million wet and one million
dry). The unit has five different temperature zones for different products. In addition, the
company owns refrigerated vehicles with variable temperature settings. The company has
established and operates a complete cold chain system for Mc Donalds.
McDonald's local supply networks through a cold chain service provider, Radhakrishna
Foodland. This company operates distribution centres for McDonald's restaurants in Mumbai
and Delhi. Ranging from liquid products coming from Punjab to lettuce from Pune, the
distribution centres receive items from different parts of the country. These items are stored
in rooms with different temperature zones and are finally dispatched to the McDonald's
restaurants on the basis of their requirements.
Current scenario of cold storage facilities in India:
The Directorate of Marketing and Inspection (DMI) of the Department of Agriculture and
Cooperation provides consultancy and technical services to prospective entrepreneurs in
construction, maintenance and operation of cold storages. It also trains managers and cold
storage operators for efficient operation and management of cold storages at farm level. It
provides technical support in preparation of master plan for cold storage requirements at
micro/macro level.
56
Table 6.3 Sector-wise distribution of cold storage units, 2008 (nos)

Sector
India
Private Sector
4820
Cooperative Sector
363
Public Sector
133
Total
5316
Source: www.india.gov.in
Table 6.4 Commodity-wise distribution of cold storage units, 2008 (nos)
Commodity
India
Potatoes
2992
Multipurpose
1386
Fruits and vegetables
149
Meat and fish
513
Milk and milk products
191
Others
Total
85
5316
Source: www.india.gov.in
Maharashtra, Punjab, Uttar Pradesh and West Bengal are the front-runners in the cold
storage capacity in India.
With large companies expanding their food retail network, adequate cold storage
infrastructure is likely to develop at a fast pace. As the demand for speciality foods and
international brands remains strong, it is only a matter of time before world class cold chains
and cold storage facilities are set up in India.
57
7. Pricing structure and tariffs

In order to ensure that a product is competitive in the Indian market, exporters need to
understand the system and take into account the following factors: duties, margins in a
distribution chain consisting of importers, distributors and retail outlets and Central and State
taxes of the country.
There are many challenges faced while importing products in India. Costing is one of the
most significant issues, as there is a high import duty. Foreign companies need to have a
decent understanding of the Indian market and the consumer behaviour. Pricing is one of the
most important factors to be considered for imported products.
7.1 Tariffs and duties of imported foods

India, traditionally has maintained high tariffs and import restrictions on food items. The basic
duties are levied while importing products into India and these include:
Basic dutyThe Government of India considers the basic import duty as the main levy.
This duty can either be a percentage rate applied to the value of the goods (valued at
Cost, Insurance and Freight (CIF)) or a specific rate based on unit of measurement.
Different rates of duty apply for different products, as this duty is commodity specific.
The Central Government may also, through notification, exempt goods specified in the
notification partly or wholly from basic customs duty. The basic customs duty can be as
high as 100 per cent for agriculture and food products
Additional duty of customsAlso known as countervailing duty, it is calculated on the

assessable value of imports plus the basic customs duty. This is equivalent to the rate
of excise duty that would have been charged had the imported item been manufactured
in India. Depending on the product, these excise duties can be as high as 24 per cent.
Moreover, this duty is applied to the total value of the goods, calculated as the value at
CIF plus the basic customs duty.
Education cessThis is charged as a percentage of all duties and taxes levied by the
central government except the additional duty of customs. The education cess paid on
imported inputs cannot be set off against any duty/cess payable on manufactured items
Special additional dutyThe special additional duty is a rate that differs by product.
This duty is levied on the total value of goods, computed as the value at CIF, along with
the basic customs duty and the additional duty of customs.
Apart from the four duties, additional levies such as antidumping duties and safeguard duties
may also be applied. Anti-dumping duties are levied on specific goods imported from
specified countries in order to protect the indigenous industry.
58
Table 7.1 Import duties on select food products

S. No.
Category
Basic
duty
(%)
CVD
CESS
(%)
Additional
duty (%)
Total
Customs
duty (%)
Fruits
Apples
50
52.015
Oranges, grapes, pineapples,

guavas, mangoes
40
41.612
Pears and quinces
35
36.411
Other fruits
30
31.209
Potatoes
30
36.497
Other vegetables
30
31.209
30
36.497
100
Fresh
30
31.209
Processed
30
36.497
Skimmed milk, milk food for babies
60
68.954
Yogurt, buttermilk, cheese and curd
30
31.209
Butter, Diary spreads, Ghee, Butter

oil, Whey, Ice-cream
30
36.497
Pasta (cooked or uncooked)
30
36.497
Confectionery (chocolate and sugar)
30
10.504
48.086
30
36.497
60
68.955
Virgin
Edible grade
Vegetables
2

3
Fresh, chilled and frozen meat of

bovine, swine, sheep, goats
Sausages and similar products
111.15

4
Dairy products
5
6
7
Preparations of cereals, flour, starch

or milk and pastry products

8
Juices, Jams, Jellies, Marmalade,

Sauce, Soups
Other food products
Natural Honey
Olive oil
** Import duty is calculated on assessable value, i.e. CIF + 1% (landing charges); the cess and additional duty
have a compounding effect on the basic duty.
Note:
Import duties and taxes are subject to change without notice. It is strongly suggested that they be re-checked
prior to the conclusion of any commercial agreement.
59
A typical example for calculating the total custom duty for imported apples is given below:
Table 7.2 Custom duty for imported apples
Rs
CIF Value*
Basic Custom duty @ 50% of assessable value = 101
CIF + Customs duty
100
50.5
150.5
Total CESS (3% on basic duty)

Landed cost
Of which Total Customs duty
1.515
152.015
52.015
Note: CIF value of apples is assumed to be Rs. 100.
7.1.1 State taxes

Sales Tax/Value Added Tax
Central Sales Tax (CST) is levied on interstate sale of goods, i.e. where the sale occasions
movement of the goods from one state to another. This is levied by the state from which the
movement of goods commences. Local sales tax/Local VAT are levied on sale of goods
within the state, i.e. where the movement of goods as a result of the sale commences and
terminates within the state itself.
In India except for the State of Uttar Pradesh, the other 27 states have adopted Value Added
Sales Tax (VAT). VAT paid on goods purchased from within a state can be off set against
VAT and CST payable to that state on resale of those goods. Similarly, the VAT can also be
set off against VAT/CST payable to that state against sale of goods manufactured within the
state using the bought goods as inputs. Where the bought goods or goods manufactured
within the state using them as inputs are stock transferred to another state, then the input
credit for VAT shall only be allowed for VAT paid in excess of 4 per cent on those inputs.
Entry tax is levied by the State Governments on goods brought into the state from outside for
use or consumption within the state. The laws and the rates differ from place to place. In
many states, the entry tax paid is allowed as a set off against the VAT payable on goods.
A comprehensive list of some of the duty rates of imported food products in India is given in
Appendix III.
7.2 Pricing structure of imported foods

With regard to the imported food sector, due consideration should be given to adapt to the
Indian context, with respect to price and technology level. Therefore factors such as tariff
rates, imported prices and volume of import are some of the most important factors to be
considered while importing products. Given below is a typical structure used for pricing
products such as apples and olive oil:
60
Table 7.3 Pricing structure for apples and olive oil

Particulars
Apples
(US$ per kg)
CIF (Cost Insurance and Freight) value at Indian Port
1.00
+ Total customs duty on CIF
*
*
*
52.015%
+ Freight/clearing charges (2% on CIF)
0.02
Landed cost
1.54
Distribution Costs* (margins, taxes, etc.)
0.80
MRP
2.34
Distribution margins = 1015% for apples and 1520% for olive oil.
Retailer Margins = 2030%
Local sales tax (VAT) = 4%
Some of the direct costs that an importer incurs when transferring products through to retail
outlets include:
local transportation costs from the port to the warehouse;
storage cost;
distribution costs (transport from the go-down to other cities).
7.2.1 Margins at different levels

All players in the value chain are aware of the MRP price of imported products. However, the
costing of the landed price is complex and uncertain to distributors and supermarkets. Many
of the importers negotiate the markdown profit with supermarkets and distributors.
Rs. 70
Price to distributor
(Markdown profit)
10%
Rs. 80
Price to store
25%
Rs. 100
MRP
Within the supply chain, while the markdown profit to the distributor ranges between
710 per cent depending on the product and negotiation between the importer and
distributor, supermarkets in India operate on a 20 per cent profit margin. Major stores
operate on around a 1517 per cent profit.
7.2.2 Modes of payment

An importer pays to the exporter in many ways. While food products are generally imported
by opening a Letter of Credit (LC), fresh fruits are usually sold on a Documents against
Acceptance (DA) basis. Importers very often demand supplies on a consignment basis,
wherein the payment is made to the exporter after selling the fruits in the market. However,
this method is generally not recommended to exporters. Therefore, the four basic modes of
payments, which are generally adapted in India include: Payment in Advance, Open credit,
Documentary credits/letter of credit and document against acceptance.
Payment in advance
Under this method, the importer makes full payment to the supplier before the shipment of
goods and the entire risk is laid on the importer. This method of payment generally takes
place under the following circumstances:
61
If the importer has not been long established.
If the credit status of the importer is doubtful and unsatisfactory
If the political and economic risks of the country are very high.
If the product is in high demand and the seller does not have to accommodate the
importer's financing request in order to sell the product.
This method proves to be inexpensive as it does not involve any commercial bank. However,
a high degree of payment risk is faced by the buyer, if the seller sends poor quality goods or
incorrect or incomplete documentation.
Letter of credit
The letter of credit method is the most popular mode of payment in India. Here, the buyers
bank undertakes to pay the seller, when the terms and conditions have been met. According
to the creditworthiness, the bank issues documentary credits to a customer. The credit period
availed by an importer is usually 3040 days in India.
Documents against acceptance

This type of payment provides an important bank payment mechanism as it serves the need
of both the exporter as well as the importer. Through an exchange of documents, the sale
transaction is settled by the bank, thus enabling the payment and transfer of title
simultaneously. For instance, in this system, the exporter transports the fruits and sends the
documents through a bank and importer checks the documents. The importers bank on
acceptance remits payment to the exporters account.
Open credit
Without issuing any negotiable instrument, the importer makes payments to the exporter at
some specific date in the future, by only evidencing his legal commitment to pay at the
committed time. This method usually takes place, either when the importer has a strong
credit history or is well-known to the seller.
No protection is provided to the exporter in case of non-payment. However, the exporter can
decrease the repayment period and can retain the title to the goods until the payment is
made. In spite of the risks, the open account payment is more prevalent in the international
trade and exporters offering such terms are increasingly obtaining credit insurance to
mitigate the potential open account credit risks.
Usually, the credit to and by importers to distributors are generally not interlinked. Until a
good relationship and understanding is established with the importer, exporters do not
usually extend any credit. If a good relationship is established, then it is customary to extend
a 3040 day line of credit. While importers allow 30 days credit to their distributors, the
industry norm for receiving payment from food chains/stores is generally 3040 days and is
slowly increasing to 6090 days credit.
62
From farm to plate

A Case Study on Imported Apples
India is the sixth largest consumer of apples in the world. With the lowering of trade
barriers, India has emerged as an attractive destination for overseas apple growers.
Apples top the list of fruits imported, accounting for around 26 per cent of the total import
of fruits. Steady consumer demand for imported apples is reflected in the increase in
import from US$10.5 million in 200203 to US$52.96 million in 200708. Despite being
priced higher than the Indian varieties, the major selling points for imported apples are that
they are well graded, attractively packed and have better appearance. The peak season
for imported apples is normally January-July, which is the off season for domestic produce.
Trends in the import of apples, 200207 (US$ million)
60
50
52.96
40
32.51
30
20
13.70
10.50
20.46
10
11.68
0
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
From USA to Australia, apples from all parts of the world are available in the Indian
market.
Apples from USA accounted for 37.1 per cent of the total import of apple, followed by
China and Chile which account for 27.6 per cent and 25.5 per cent respectively. New
Zealand and Australia are the other major exporters of apples to India. Red Delicious
(USA), Washington (USA), Fuji (China), ENZA (New Zealand) and Granny Smith
(Australia) are some of the famous brands of imported apples found in the Indian market.
Red Delicious and Fuji are imported the most, with their imports accounting for around
US$16 million and US$11 million respectively.
63
Major sources of imported apples, 200708
Chile
25.5%
New Zealand
7.2%
Australia
1.8%
Others
0.8%
USA
37.1%
China
27.6%
Imported apples arrive mostly at the ports of Mumbai, Chennai, Tuticorin and Vizag.
Around 54 per cent of the imported apples arrive at the JNPT in Mumbai, followed by the
Chennai port at 43 per cent. These apples are normally packed in cartons weighing 20 kg.
Major port of destination
Tuticorin
2%
Chennai
43%
Vizag
1%
JNPT, Mumbai
54%
After completing the required formalities at the port, the importer transports the cartons to
a cold storage facility. Usually the cold storage space is rented, although some importers
have their own warehouses equipped with cold storage. Distributors or wholesalers then
transport the cartons of fruit from the cold storage to retail or wholesale markets using
vans and trucks. Generally, if the distance is greater than 400 km, refrigerated vans are
used. In certain cases, some of the big retail outlets buy directly from the importer.
64
Distribution structure for imported apples
Cold
Storage
Importer
Distributor/
Wholesaler
Retailer/
Institutions
India, traditionally has maintained higher tariffs on apples. The current rate for apples is
52.015 per cent. Indias tariff on apples is not only the highest among the fruits it produces
locally but is also higher than the tariff on apples in other countries. Apples that arrive at CIF
price of US$1 are finally sold to the customers at around US$2.34 in the retail outlets. One
can buy imported apples from a number of places ranging from carts and wholesale markets
to supermarkets and big retail chains.
Pricing structure for apples
Particulars
CIF (Cost Insurance and Freight) Value at Indian Port
+ Total customs duty on CIF
Apples
(US$ per kg)
1.00
52.015%
+ Freight/clearing charges (2% on CIF)
0.02
Landed cost
1.54
Distribution Costs* (Margins, taxes, etc.)
0.80
MRP
2.34
* Distribution margins = 1015%

*
*
Retailer Margins = 2030%

Local sales tax (VAT) = 4%
65
8. Regulatory framework and import procedure

8.1 Regulatory framework
In terms of production, consumption, export and growth prospects, the food processing
industry in India is one of the largest. With a number of fiscal reliefs and incentives, the
government has accorded it a high priority, to encourage commercialisation and value
addition to agricultural produce, for minimizing pre/post harvest wastage, generating
employment and export growth.
Various laws in India govern the food processing sector. While the existing laws and
standards adopted by the government focus on ensuring the quality and safety of food, these
laws also facilitate trade at both international and domestic level. The regulatory framework
along with food safety and standards also emphasises self regulation and capacity building
and decentralisation of licensing.
The government has recognised the need to promote investments in the food processing
sector to ensure an increase in India's share in the global trade of agricultural products, to
generate employment for large a number of people, to increase the income of farmers and to
contribute to the overall economy of the country. Reforms have been initiated to remove
legislative barriers and introduce facilitative measures to catalyse private sector activity in the
food and agri-business sector. Some of the key measures recently undertaken by the
government include:
amending the Essential Commodities Act to enable free trade and storage of
commodities;
amending the Agriculture Produce Marketing Commission Act;
rationalising food laws;
implementing the National Horticulture Mission to increase horticulture production

through increased investments along the supply chain;
removing restrictions on milk procurement;
reducing taxation of food products;
permitting 100 per cent foreign direct investment;
formulating the Food Safety and Standards Act 2006.
The government, in order to boost the industry growth has also started providing tax
concessions and several other benefits. A number of government organisations have come
into existence, to give an impetus to the development of the food processing sector. Some of
these organisations include Ministry of Food Processing Industries (MOFPI), Agricultural and
Processed Food Products Export Development Authority (APEDA) and the Marine Products
Export Development Authority (MPEDA).
8.1.1 Major laws governing food products

The Food Safety and Standards Act, 2006
The food sector in India is governed by several laws that are administered by different
Ministries of the Government of India. However, consolidating all these laws, the Parliament
enacted The Food Safety and Standards Act in 2006. The objective of this law was to
integrate the food safety laws, so as to systematically and scientifically develop the food
processing industry and shift from a regulatory regime to self-compliance.
66
Science-based standards are laid down by the Act for articles of food and the act regulates
their manufacture, storage, distribution, sales and import and deals will all packaged and
processed food. It aims to establish a single reference point for all matters relating to food
safety and standards from the present multi-level, multi-departmental control. The salient
provisions of the Prevention of Food Adulteration Act 1954 are incorporated in the Act. The
Act is based on the international legislations, instrumentalities and the Codex Alimentarius
Commission.
The key provisions of the Act are as follows:
The Food Safety and Standards Authority (FSSA) would be established for regulating
the food sector.
Standards for food safety would be laid down by FSSA with the aid of scientific panels
and a central advisory committee. These standards will deal with contaminants,
pesticide residues, biological hazards and labels and will cover specifications for
ingredients.
Food additives, contaminants, processing aids, insecticides, pesticides, antibiotic

residues, or solid residues in the food should be in accordance with specified
regulations. Similarly, other foods which must adhere to specific regulations include
irradiated food, organic food, genetically modified food, health supplements and
proprietary food.
Centrally, the nodal ministry for implementing the Act is the Ministry of Health and
Family Welfare, Enforcement is to be the responsibility of State Commissioners of
Food Safety and Food Safety Officers.
Every entity in the food sector should get a licence or a registration, issued by local
authorities.
Packaged food products have to be labelled as per regulations in the Act and should
not mislead consumers about quality, quantity or usefulness.
Entities in the sector are required to initiate recall procedures if it is found that the food
sold has violated specified standards. If a food item is not in compliance with the
specific standards, a food operator owning or carrying out a business can withdraw the
food and inform the competent authorities.
The act places certain responsibilities on the distributors and retailers. For instance, the
retailers are responsible for the expiry dates found in the food products in their
premise.
Prevention of Food Adulteration Act, 1954

The PFA standards and regulations applying equally to both domestic and imported products
cover various aspects of food processing and distribution. This act is proposed to prevent
and protect consumers against food adulteration. Issues such as food colouring and
preservatives, pesticide residues, packaging, labelling and sales are dealt with, under this
act. The Central Committee for Food Standards, under the Directorate General of Health
Services, Ministry of Health and Family Welfare, administers the operation of this Act. The
Central Committee for Food Standards (CCFS) is responsible for advising the Central
Government and State Government and matters arising out of the administration of the Act.
Besides, a Central Food Laboratory has been set up by the Central government to perform
functions entrusted to it for the administration of this act.
67
Establishment of regulatory standards for primary food product is the main focus the PFA.
The PFA does not always keep pace with advances in the food processing sector. Besides,
PFA rules go beyond the mere establishment of minimum product quality specifications, by
laying down recipes for how food products are to be manufactured. Though concerned
parties may appeal to have the PFA Rules amended, the appeal processes are cumbersome
and time-consuming. As specified in the regulation, including the labelling and marking
requirements, all imported products must also adhere to the rules.
The Fruit Products Order 1955 (FPO), issued under the Essential Commodities Act,
1955
The production and distribution of fruits and vegetable products, vinegar, sweetened aerated
waters and synthetic syrups are regulated by the Fruit Products Order, 1955 (FPO), which is
administered by the Department of Food Processing Industries. Specifications and quality
control requirements regarding the production and marketing of processed fruits and
vegetables are given in this order and a license is required for manufacturing of fruit and
vegetable products under this order. Minimum sanitary and hygiene requirements of the
premisessurroundings and personnelwater to be used for processing, processing
equipment, etc. and marketing of processed fruits and vegetables are laid down under this
order. This order which is implemented by the Ministry of Food Processing Industries also
specifies the maximum limits of preservatives, additives and contaminants for various
products. Imports of processed fruit and vegetable products must also meet the FPO
standards.
Meat Food Products Order, 1973 issued under the Essential Commodities Act, 1955
One of the main objectives of the Meat Food Products Order is to maintain hygienic
manufacturing conditions of meat products for domestic consumption and to ensure better
quality through proper quality control. Sanitary and other requirements, limits of heavy
metals, preservatives, insecticides, residue, packing, marking and labelling of meat products,
etc. are provided in this order. Manufacturers are accredited based on the sourcing of meat
supplies. The Directorate of Marketing and Inspection, Ministry of Agriculture (Department of
Agriculture and Cooperation), is the regulatory authority. In order to set up a factory for
producing/processing meat products, a license is required and under this order export of beef
is prohibited.
The meat processing industry is also subject to the following State regulations:
A No Objection Certificate (NOC) has to be obtained from the District administration for
the slaughter of cattle, buffaloes, etc.
Permission from the civic bodies/State Government (Department of Animal Husbandry)

is required before setting up a meat processing unit integrated with a slaughter house.
Slaughter of cows is banned in most of the States.
This order is equally applicable to importers of meat products. However, the implementation
of the order is weak, due to unorganised production in the domestic market and few subject
imports. The Government has also established procedures for the importation of livestock
and related products to India under the Livestock Importation Act, 1898. This act is
implemented by the Department of Animal Husbandry and Dairying, Ministry of Agriculture.
These procedures are available at: http://dahd.nic.in/order/livestockimport.doc.
68
The Milk and Milk Products Order, 1992, issued under the Essential Commodities Act,
1955
By regulating the processing and distribution, the Milk and Milk Products Order seeks to
ensure the supply of liquid milk. Administered by the Department of Animals Husbandry and
Dairying under the Ministry of Agriculture, this order establishes sanitary requirements for
dairies, machinery, and premises and sets quality control standards for milk and milk
products. While units handling up to 75 000 litres of milk per day are registered by the State
Governments, units with more than 75 000 litres per day capacity are registered by the
Central Registering Authority. Milkshed area, i.e. a geographical area, is demarcated by the
Registering Authority for the collection of milk by the registered unit. Units handling less than
10 000 litres of liquid milk per day or milk solids up to 500 TPA are not required to register.
Standards specified in the order also apply to imported products.
Plant Quarantine (Regulation of Import into India) Order, 2003
Under the Destructive Insects and Pests Act, 1914, the GOI formulated the Plant Quarantine
(Regulation of Import into India) Order, 2003. It was published on 18 November 2003, with
the purpose of prohibiting and regulating the imports into India of agricultural articles. The
implementing agency is the Directorate of Plant Protection, Quarantine, and Storage, under
the Department of Agriculture and Cooperation, Ministry of Agriculture, which is similar to the
Animal Plant Health Inspection Service (APHIS) of the USDA.
The Standards of Weights and Measures Act, 1976, and the Standards of Weights and
Measures (Packaged Commodities) Rule, 1977
Fair trade practices with respect to packaged commodities are prescribed by these
measures. The purpose of these rules is to make certain that the basic rights of consumers
regarding vital information about the nature of the commodity, the name and address of the
manufacturer, the net quantity, date of manufacture and maximum sale price are provided on
the label. Additional labelling requirements for food items covered under the PFA may be
also be required. The act also specifies that the label of every pre-packaged product should
carry a help line number for the customers. The regulatory authority of this law is the
Department of Consumer Affairs, located within the Ministry of Consumer Affairs, Food, and
Public Distribution. Importers of packaged food products must adhere to these acts, including
labelling the product. Details to be provided on the imported products include, the name and
address of the importer, the net quantity, date of manufacture, best-before date and
maximum sales price.
8.1.1.1 Other major regulations relating to business operations in India
Foreign trade (Export/Import)
The foreign trade is governed by the Foreign Trade (Development and Regulation) Act, 1992
and the Foreign Trade (Regulation) Rules, 1993 and is administered by the Director General
of Foreign Trade (DGFT), in the Ministry of Commerce.
The Government has prepared the Foreign Trade Policy in 2004, which is applicable for five
years and is amended from time to time. With certain export promotion schemes, the policy
also lays down the import/export policy of the Government.
Foreign Exchange Regulations
The foreign exchange regulations are governed by the Foreign Exchange Management Act,
1999. This Act is implemented by the Reserve Bank of India (RBI). With its head office in
Mumbai, the RBI has regional offices in all the import cities in India. The Foreign Exchange
Department of RBI is the unit within RBI that is responsible for implementing FEMA.
69
Several notifications, circulars and regulations are issued by the RBI for the purposes of
implementing the Act. These lay down the conditions, limitations and the procedures
governing foreign exchange transactions.
The foreign exchange regulations have now become liberal with the liberalisation and growth
of the Indian economy. Currently, the Indian rupee is freely convertible for current account
transactionsi.e. for the purposes of remittances for imports, payment of interest, dividend,
royalties, feeds for technical services and other services, as long as these transactions have
been entered into within the regulatory framework governing them. However, in certain
cases, capital account transactions (i.e. investments, commercial borrowings, divestments,
etc.), need special approval from the RBI.
Contact details of some of the regulatory agencies in India are provided in Appendix IV.
8.2 Import procedure and documentation

8.2.1 Procedure
It is the main responsibility of the importer to ensure that a product is permissible for
importation and for clearing the consignment through the Customs. The services of a
Clearing and Forwarding Agent is generally utilised by the importers and exporters need to
fully cooperate with importers during this process. The procedure through Indian Customs is
usually as under:1
The primary step is to obtain an import permit. No consignment shall be imported into
India without a valid import permit issued by the Ministry of Agriculture.
The importer or his agent shall file an application in PQ Form-15 in respect of each
cargo immediately upon arrival or in advance in case of perishable consignments to the
officer-in-charge of plant quarantine station at the notified point of entry along with the
prescribed documents.
On receipt of the application the PQ officer shall scrutinise the application and if found
complete in all respects shall register the application and assess the inspection fees.
On payment of inspection fees by the importer as per the prescribed rates in the form
of demand draft/pay order drawn in favour of the 'Pay and Accounts Officer,
Department of Agriculture and Cooperation' of concerned area of jurisdiction, the plant
quarantine officer shall issue a quarantine order specifying name of inspecting staff,
date, place and time of inspection of the consignment.
On arrival of the consignment, the documentation and certificates are checked by the
custom authorities to ensure that the product is permissible for imports.
In order to ensure that the packaging and labelling requirements conform with
importation requirements, the container is opened and checked.
A Port Health Officer withdraws samples for testing with the Food and Drug
Administration (FDA) or any government recognised testing lab. The product should
comply with PFA requirements (it is advisable for exporters to send some samples
beforehand to the importer for testing to avoid the unexpected outcome). The port
health officer, in case of doubt of the pests or adulteration, will send samples of fresh
fruits and vegetables to plant quarantine and processed food (vegetarian) to CFTRI for
70
There may be variations in the import procedure from product to product and hence exporters must
check specific procedures for products they plan to export to India.
inspection. In the case of frozen/processed meat and marine products the customs
officials are required to send samples for testing to animal quarantine and MPEDA
respectively.
Custom officials determine the import duties i.e. basic import duty, countervailing duty and
special additional duty on receipt of a No Objection Certificate (NOC).
Inspection by the port authorities
The clearance of imported food products at the port of entry requires a certification from the
port health authority that the product conforms to the standards and regulations of the PFA.
Detailed guidelines are laid down for examination and testing of food items prior to customs
clearance.
General inspection
General inspection is conducted in addition to testing of samples. Customs officials are
required to check the condition of the hold in which the products are transported, the physical
appearance of the productswhether the package is swollen or bulged and also check for
the presence of insect infestations, dirt, etc. Customs officials have to ensure that the
products comply with the labelling requirements under the Prevention of Food Adulteration
rules and Packaged Commodity rules. (Detailed labelling requirements are mentioned in the
chapter titled Rules and Regulations). Also, the officer will check if the imported food item,
at the time of import has a valid shelf life of not less than 60 per cent of original shelf life.
Detailed checks
Apart from the general checks referred to above, all consignments of edible/food products
imported through ports are required to be referred to the Port Health Officer (PHO) for
testing. The Ministry of Commerce and Industry has published a list of high risk food items.
This list includes edible oils and fats, pulses and pulse products, cereal and cereal products,
milk powder, condensed milk, food colours, and food additives, among other items. In order
to alleviate the difficulties of importers consignments are allowed to be stored in warehouses
pending the receipt of test reports. Clearance for home use will be allowed only after receipt
of the test report. If the product fails the test, the customs authorities will ensure that the
goods are re-exported out of the country by following the usual adjudication procedure or
destroyed as required under the relevant rules. As regards ports where Port Health Officers
(PHOs) are not available, the Customs is required to draw the samples and get them tested
from the nearest Central Food Laboratory or a Laboratory authorised to conduct such testing
by the Directorate General of Health Services.
In addition to testing of food items under the PFA Act, these items shall also be subject to
examination/testing to ensure compliance of the requirements of other Acts, Regulations and
Orders such as Meat Food Products Order, the Livestock Importation Act, etc. if applicable,
before these are allowed clearance into the country.
Horticultural products
Fresh agro products that are imported require an import license which can be obtained from
Plant Quarantine office from the Ministry of Agriculture. For all the agricultural products, the
following steps are to be followed for clearance:
The importer or his agent shall arrange for inspection/sampling of the consignment on
the scheduled date and time at the prescribed place by the nominated plant quarantine
officer as per the quarantine order issued. The importer or his agent shall associate
with inspecting officer while undertaking inspection. The PQ officer deputed for
inspection shall draw appropriate size of sample for detailed laboratory testing.
71
In the event of live insect infestation is noticed, the importer or his agent shall arrange
for fumigation of consignments by an approved pest control operators at his own cost
under the supervision of PQ officer. The importer or his agent submits an undertaking
for supervision of fumigation operations along with remittance of supervision charges
as per the prescribed rates
A release order is issued if a consignment on inspection is found to be free from exotic

pests. However in case of consignments found infested with live pests the same shall
be permitted for clearance only after fumigation and re-inspection. A detention order is
issued in respect of consignments that are found infested/infected with quarantine
pests or imported in contravention with PQ regulations for arranging deportation failing
which the same shall be destroyed at the cost of importer.
Without the clearance from plant quarantine the goods will not be released. Even the
customs duty is paid only after PQ clearance.
*Special conditions of import from Australia for select fruits are given in Appendix IV.
Livestock
The livestock productsmeat and meat products of all kinds including fresh, chilled and
frozen meat are allowed to be imported only against a sanitary import permit issued by the
Department of Animal Husbandry and Dairying. For this purpose, a detailed import risk
analysis is carried out and a sanitary import permit is issued only after the concerned
authorities are satisfied that the import of the consignment will not adversely affect the health
of the animal and human population of this country. The Import Permit lays down the specific
conditions that will have to be fulfilled in respect of the consignment, including pre-shipment
certifications and quarantine checks. The Permit also specifies the post-import requirements
with regard to quarantine inspection, sampling and testing. The Import Permit is generally
issued for a period of six months and can be extended by the concerned authorities for a
further period of six months after charging a revalidation fee. The livestock products are
allowed to be imported into India only through the sea ports or airports located at Delhi,
Mumbai, Kolkata and Chennai, where the Animal Quarantine and Certification Services
Stations are located. On arrival at the port/seaport, the livestock product is required to be
inspected by the officer in-charge of the Animal Quarantine and Certification Services Station
or any other veterinary officer duly authorised by the Department of Animal Husbandry and
Dairying. After inspection and testing, wherever required, quarantine clearance is accorded
by the concerned quarantine or veterinary authority for the entry of the livestock product into
India. If required in public interest, the quarantine or veterinary authority may also order the
destruction of the livestock product or its return to the country of origin.
Wherever any disinfection or any other treatment is considered necessary in respect of any
livestock product, it is the importer who on his own or at his cost has to arrange for
disinfection or other treatment of the consignment under the supervision of a duly authorised
quarantine or veterinary officer.
However, certification is based mostly on visual inspection and records of past imports.
Consequently, importers of new products can sometimes face undue delays in clearing their
products. The custom clearance period may last between one day and one month,
depending on the product and experience of the importer. In case of a dispute or rejection of
the consignment, the importer can file an appeal at the Customs office at the port of entry.
72
Processed food
A crucial step for an exporter from any country to India is to get an approval for their
processed food products from Central Food Technological Institute (CFTRI), Mysore.
Samples of all imported processed food items (vegetarian) will have to be sent to (CFTRI) for
testing. CFTRI has the required state-of-the-art facilities to test cereals, pulses, plantation
products, dairy products, oils and fat, processed fruits and vegetables, confectioneries, and
other processed food. The products are tested for nutrition labelling, amino acid profile,
vitamins, fatty acid composition, contaminants such as pesticide residues, food additives and
adulterants. Samples received from the ports are analysed as per the specifications. Only
after getting an approval from CFTRI, the goods will be handed over to the importers for
distribution. The test report from CFTRI takes a minimum of two weeks.
Minimum time taken for clearing imported products:
Table 8.1 Time taken for clearance of imported food at the port
Category of food
Processed food
Time taken for clearance

1015 days
Plant quarantine clearance
7 days
Animal quarantine clearance
7 days
Customs clearance
2 days
From 2003, the government of India has started de-licensing some categories of food
products, bringing them under open general license. In 2007, about 450 food products were
brought under the open general license. This is expected to result in an increase in import of
food items.
8.2.2 Documentation
The important documentation procedures to be followed by importers in the country include:
In the prescribed bill of entry format, importers must furnish an import declaration,
disclosing the value of imported foods. This must be accompanied by the following
documents:
Import permit original

A permit authorised by the Plant Quarantine Officer for the import of fresh
fruits/vegetables, and processed food is mandatory. The importer has to clearly
state the specified quantity intended to be imported. The Import Permit issued
shall be valid for six months from the date of issue and valid for multiple port
access and multiple part shipments provided the exporter, importer and country
of origin are the same for the entire consignment. For frozen/processed meat
products and frozen/processed marine products a permit is required from Animal
Quarantine and MPEDA respectively.
Phytosanitary certificate (original) issued at the country of origin or PSC

Re-export format, in case of re-exported consignment along with attested copies
of PSC issued from the country of origin.
Customs bill of entry (duly endorsed).
Shipping/airway bill.
Invoice and Packing list.
73
Fumigation certificate (if required).
Certificate of Origin.
Bill of lading.
A certification from the port health authority is needed for the clearance of imported
food products at the port of entry. This certificate conforms to the standard and
regulations of the PFA (Prevention of Food Adulteration Act). As most ports have very
limited testing facilities, this certification is based mostly on visual inspection and
records of past imports. Therefore, many importers face unnecessary delays in clearing
their products. Depending on the product and experience of the importer, the custom
clearance period may last between one day and one month. An appeal can be filed by
the importer at the Customs office at the port of entry in case of a dispute or rejection of
the consignment.
Table 8.2 Approximate charges levied by clearing and forwarding agents

Category of food
Charges for a 20 container
Processed food
US$375
Frozen food
US$500
Natural food
US$375
8.2.3 Packaging requirements

There are many requirements that an import must conform with, while importing products.
Given below are some of them:
74
Per Notification No. 44 (RE-2000)/19972002, issued by the Department of Commerce

on 24 November 2000, all packaged commodities imported into India should carry the
following declarations:
Name and address of the importer.
Generic or common name of the commodity packed.
The name of the manufacturing company and contact details of the manufacturer.
Net quantity using standard units of weights and measures. All weights or
measures to be reported in metric units. Certain commodities can only be packed
in specified quantities (weight, measure, or number). These include baby food,
weaning food, biscuits, bread, butter, coffee, tea, vegetable oils, milk powder, and
wheat and rice flour. If the net quantity of the imported package is given in any
other unit, its equivalent terms of standard units shall be declared by the importer.
Month and year of packaging in which the commodity was manufactured, packed,
or imported.
The MRP at which the commodity in packaged form may be sold to the ultimate
consumer. This price shall include all taxes, local or otherwise, freight, transport
charges, commission payable to dealers, and all charges towards advertising,
delivery, packing, forwarding, and the like.
Labels must be printed in English or Hindi (Devnagari Script).
Every package of vegetarian food must bear a symbol in green colour on the
principal display panel just close to the name or brand name of the food.
Similarly, every package of non-vegetarian food must bear a symbol in red
colour.
Details of ingredients as per PFA.
Imports of certain products, including some food products (milk powder,

condensed milk, infant milk foods, milk-cereal based weaning foods) and food
additives, must comply with mandatory Indian quality standards. All
manufacturers and exporters whose products are sold in India are required to
register with the Bureau of Indian Standards.
Shelf Life: Notification No. 22 (RE-2001) 19972002, dated 30 July 2001, issued by the
Department of Commerce, states: Imports of all such edible/food products, domestic
sale and manufacture of which are governed by the PFA shall also be subject to the
condition that, at the time of importation [emphasis added], these products are having a
valid shelf life of not less than 60 per cent of its original shelf life. Shelf life of the
product is to be calculated, based on the declaration given on the label of the product,
regarding the date of manufacture and the due date of expiry.
Per notification GSR 388 (E), issued by the Department of Health, on 25 June 2004,
states that, every package of food which contains permitted artificial sweetener shall
carry the label CONTAINS ARTIFICIAL SWEETENER AND FOR CALORIE
CONSCIOUS, along with the name or trade name of the product.
Per notification GSR 339 (E), dated 27 May 2005, issued by the Department of Health,
states that: No containers or label relating to infant milk substitute or infant food shall
have a picture of infant or women or both. It shall not have picture or other graphic
materials of phrases designed to increase the saleability of the infant milk substitute or
infant food. The terms Humanised or Maternalised or any other similar words shall
not be used. The package and/or any other label of infant milk substitute or infant food
shall not exhibit words, Full Protein Food, Energy Food, Complete Food, or Health
Food, or any other similar expressions.
The PFA Rules, 1955, includes a positive list for the presence of pesticide residues in
various commodities and food (manufactured/imported) products, and their respective
tolerance levels. Of the 189 pesticides registered for regular use in India, only 121 have
Maximum Residue Limits (MRLs) notified. There are 27 pesticides that do not require
MRLs. For the remaining pesticides, MRLs have not yet been established. CODEX
Alimentarius MRLs may be accepted for imported foodstuffs only for those pesticides
not included in Indias own positive list of pesticides.
All imported foods are randomly sampled at the port of entry for their conformity to PFA
standards. On 16 June 2004, with immediate effect, the Ministry of Commerce and
Industry published a list of high risk food items, imports of which are subject to 100 per
cent sampling. This list includes edible oils and fats, pulses and pulse products, cereal
and cereal products, milk powder, condensed milk, food colours, and food additives,
among other items. The import of product samples via express mail or parcel post is
allowed, contingent on obtaining prior permission from the Directorate General of
Foreign Trade. Mail order imports are not allowed. Once the products enter the
domestic market, they are to be monitored randomly at the retail and wholesale level
by the respective regulatory authorities.
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Appendix I. Major players in the food processing sector and

products
Company
Products
Agro Tech Foods
Edible Oil, Wheat flour, Dried green peas, Packaged food, Microwave
popcorn, Snacks (potato and corn chips)
Britannia Industries Ltd
Biscuits and Bakery products, UHT Milk, Milk Products (cheese, butter,
flavoured milk)
Cadbury India Ltd
Chocolates, Confectionery, Malted drinks, Cocoa powder, Hard boiled

toffees
Dabur Foods Ltd
Fruit juices, Cooking pastes, Candies, Coconut milk, Tomato puree, Lemon
drink, Chilli powder
Gilts Food Products Pvt Ltd
Sweet mix, Snack mixes, Meal mix, Pure ghee, Dairy whitener, Milk powder
Glaxo Smithkline Beecham
Malted milk food, Biscuits
Godrej Foods Ltd
Fruit juice, Tomato puree, Cooking medium, Bakery fats
Gujarat Cooperative Milk

Marketing Federation Ltd
Ice-creams, Butter, Ghee, Cheese, Milk Powder, Infant Milk Powder,

Traditional Indian Sweets, Chocolates, Curd
Haldirams Marketing Pvt. Ltd
Snack foods, Traditional Indian Sweets, Syrups, Vermicelli
Heinz India, Ltd
Malted milk food, Tomato ketchup
Hindustan Unilever Ltd
Ice-creams, Atta, Salt, Tea/Coffee, Bread, Jam and Fruit juice, Biscuits,
Soups
ITC Ltd
Ready-to-eat foods, Snack foods, Confectionery, Biscuits
Kelloggs India Ltd
Breakfast cereal
Mother Dairy Fruit and

Vegetable Ltd
Ice-creams, Butter, Cheese, Milk powder, Traditional Indian Sweets,

Chocolates, Ghee, Processed fruits and vegetables
Marico Industries Ltd
Cooking medium, Fruit jams
MTR Foods Ltd
Convenience foods, Ice-creams, Snack foods, Pickles, Readymade mixes,

Spice and masala powders, Frozen foods, Pickles
Nestle India Ltd
Chocolates, Sugar confectionery, Malted drinks, Milk powder, Instant

coffee, Tea, Noodles and Sauces, UHT and Condensed Milk, Yoghurt
Parle Products Ltd
Biscuits, Toffees
Parle Agro
Fruit pulp, Mineral water, Fruit drinks
Pepsi Foods India Ltd
Soft drinks, Snack foods, Fruit juice
Venkateshwara Hatcheries Ltd
Poultry products, Olive oil pastes, Premium cookies
76
Appendix II. Cold storage tariffs

S. No.
Commodity
Weight
Price (Rs.)
Price
(US$)
Duration
Apple, berry, maida
12 kg
0.12
Per month
Apple, berry, maida
Up to 25 kg
0.22
Per month
Apple, berry, maida
30 kg
11
0.27
Per month
Plums, Kiwifruit
Up to 5 kg
0.12
Per month
Plums, Kiwifruit
10 kg
0.22
Per month
Grapes, Litchi, Tamarind
10 kg
0.22
Per month
Potato
Per quintal
23
0.57
Per month
Ginger/dry ginger
Per quintal
50
1.24
Per month
Curd
Up to 20 kg
20
0.50
Per month
10
Egg
Up to 10 kg
0.21
Per month
11
Egg
Up to 20 kg
12
0.30
Per month
12
Chillis
Per quintal
42
1.04
Per month
13
Coriander
Per quintal
37
0.92
Per month
14
Tamarind
Per quintal
43
1.07
Per month
15
Pulses
Per quintal
12
0.30
Per month
16
Dry fruits
Per quintal
45
1.12
Per month
17
Dates
Up to 10 kg
0.07
Per month
18
Dates
20 kg
0.10
Per month
19
Dates
30 kg
0.12
Per month
20
Dates
Per quintal
16
0.40
Per month
21
Carrots
Up to 5 kg
25
0.62
For 15 days
22
Mango
Up to 20 kg
0.07
Per week
23
Mango
Up to 20 kg
0.12
For 2 weeks
24
Mango
Up to 20 kg
10
0.25
For 1 month
25
Butter and Cheese
15 kg
10
0.25
Per month
26
Milk Products
30 kg
30
0.75
Per month
27
Vanaspathy oil
Up to 20 kg
15
0.37
Per month
28
Pre-reserved rack for food

products
Per rack
2 200
54.67
Per month
8.5
Note: The above rates are indicative and need to be validated prior to commencing business operations.
77
Appendix III. Customs duty on select imported food products

S. No.
7
8
10
Category
Fruits
Bananas
Dates, figs, pineapples, avocados, guavas, mangoes
Oranges
Grapes
Melons
Apples
Pears and quinces
Apricots, cherries, peaches, plums
Strawberry, raspberry, blackberry, Kiwifruit, mulberry
Pomegranate, Tamarind, Litchi, Chico
Vegetables
Potatoes
Tomatoes
Onions, shallots, garlic, leeks
Cabbages, cauliflowers, kohlrata
Lettuce and chicory
Carrots, turnips, salad beetroot, radish, celeriac
Cucumbers and gherkins
Peas, beans, other leguminous vegetables
Asparagus, Aubergines, Mushrooms, Olives, Green chilly, Pumpkin, Spinach,
Green pepper
Fresh, chilled and frozen meat of bovine, swine, sheep, goats
Sausages and similar products
Fresh, chilled and frozen
Processed marine products (crab, shrimps, prawns, lobster, squid, octopus,
cuttlefish, oysters, tuna, salmon, herrings)
Dairy products
Skimmed milk, milk food for babies
Yogurt, buttermilk
Butter, Diary spreads, Ghee, Butter oil
Whey
Cheese and curd
Ice-cream
Preparations of cereals, flour, starch or milk and pastry products
Pasta (cooked or uncooked)
Corn flakes
Sweet biscuits
Pastries and cakes
Fruit juices
Confectionery
Sugar confectionery
Jams, jellies, marmalade
Sauce (soya, tomato, mustard, chilli, mayonnaise)
Other food products
Natural Honey
Olive oil
Virgin
Edible grade
Customs
duty (%)
31.209
41.612
41.612
41.612
31.209
52.015
36.4105
31.209
31.209
31.209
36.497
31.209
31.209
31.209
31.209
31.209
31.209
31.209
31.209
36.497
111.15
31.209
36.497
68.954
31.209
36.497
36.497
31.209
36.497
36.497
48.086
59.190
13.004
41.906
48.086
48.086
36.497
36.497
68.955
Note: Import duties and taxes are subject to change without notice. It is strongly suggested that they be
re-checked prior to the conclusion of any commercial agreement.
78
0
0
Appendix IV. Conditions of import of select fruits from Australia

Particulars
Citrus fruits (lemon, lime,

orange, grapefruit,
mandarins, etc.)
Conditions of import
o
MB fumigation @ 32 g/cubic metre for 2 hrs at 21 C or above at NAP or
equivalent thereof against Mediterranean fruit fly and Queensland fruit fly.
Or
Pre-shipment cold treatment at 0oC or below for 10 days; 0.55oC or below for
11 days; 1.1oC or below for 12 days plus in-transit refrigeration against
o
o
Mediterranean fruit fly and 0 C or below for 13 days; 0.55 C or below for
Queensland fruit fly.
Pre-shipment cold treatment at 0oC or below for 10 days; 0.55oC or below for
Mediterranean fruit fly and 0oC or below for 13 days; 0.55oC or below for
o
MB fumigation @ 32 g/cubic metre for 2 hrs at 21 C or above at NAP or
equivalent thereof against Cherry fruit flies and Mediterranean fruit fly.
Or
Pre-shipment cold treatment at 0 C or below for 10 days; 0.55 C or below for

11 days; 1.1oC or below for 12 days plus in-transit refrigeration against cherry
fruit flies and Mediterranean fruit fly.
MB fumigation @ 40 g/cubic metre for 2 hrs at 21oC or above at NAP or

equivalent thereof against Mediterranean fruit fly and Queensland fruit fly.
Or
Pre shipment cold treatment at 0oC or below for 10 days; 0.55oC or below for
Mediterranean fruit fly and 0oC or below for 13 days; 0.55oC or below for
Pome fruits (apple, pear,

quince)
Stone fruits (plum, peach,

cherry, apricot, nectarine)
Grapes
Source: http://www.plantquarantineindia.org/
Note: This is applicable for most of the countries including Australia. This adds to the clearance time and acts as
a non-tariff barrier.
79
Appendix V. Inspection and fumigation fees for fresh fruits and

vegetables
Particulars
Inspection fees
(i)
(ii)
(iii)
(iv)
Numbers/weight/volume
Fee
Up to 2 kg.
Above 2 kg up to 100 kg.
Above 100 kg up to 1000 kg.
Above 1000 kg
Rs. 50/Rs. 50/- plus Rs. 5/- per additional kg

Rs. 550/- plus Rs. 2/- per additional kg
Rs. 2500/- plus Rs. 75/- per additional tonne
except in case of pulses
Rs. 2500/- plus Rs. 50/- per additional tonne in
case of pulses
(A) On volume basis

(i) Up to 5 cu.m
(ii) Above 5 cu.m
Fumigation fees
(B) On container basis

(i) 20 container (33 cu.m)
(ii) 40 Container (66 cu.m)
Rs. 2400
Rs. 4500
(C) Supervision charges
Rs. 500 per day per consignment
Source: http://www.plantquarantineindia.org/
80
Rs. 600/Rs. 600/- plus Rs. 300/- per additional 5 cu.m

or part thereof
Appendix VI. Regulatory agency contacts

1)
Ministry of Commerce
Director General of Foreign Trade
Ministry of Commerce
Udyog Bhavan
New Delhi 110 011
Phone: (9111) 2301 6262
Fax: (9111) 2301 6225
Email: dgft@ub.nic.in
Website: http://dgft.delhi.nic.in/
2)
Ministry of Food Processing Industry

Joint Secretary
Ministry of Food Processing Industries
Panch Sheel Bhawan
August Kranti Marg
New Delhi 110 049
Phone: (9111) 2649 2475
Fax: (9111) 2649 3228
Email: anpsinha@mofpi.delhi.nic.in
Website: http://mofpi.nic.in/
3)
Registry of Trademarks
Office of the Controller General
Patents, Designs and Trade Marks
Old CGO Building
101 M. Karve Road
Mumbai 400 020
Phone: (9122) 2203 5007
Fax: (9122) 2208 9995
Email: cgpdtm@vsnl.net
Website: www.ipindia.nic.in
4)
Central Board of Excise and Customs

Chairman
Central Board of Excise and Customs
Ministry of Finance
North Block
New Delhi 110 001
Phone: (9111) 2309 2849
Fax: (9111) 2309 3215
Email: cbecoff@finance.delhi.nic.in
Website: http://www.cbec.gov.in/
81
5)
Prevention of Food Adulteration Act

Joint Secretary (PFA)
Department of Health
Ministry of Health and Family Welfare
Nirman Bhawan
Maulana Azad Road
New Delhi, 110 001
Phone: (9111) 2306 1195
Fax: (9111) 2306 1842
Email: dghs@nb.nic.in
Website: www.mohfw.nic.in/pfa.htm
6)
The Standards Weights and Measures Act

Additional Secretary (Weights and Measures)
Department of Consumer Affairs
Krishi Bhavan
New Delhi 110 001
Phone: (9111) 2338 3027
Fax: (9111) 2338 6575
Email: as-ca@fca.nic.in
Website: http://fcamin.nic.in/wm_ind.htm
7)
Phytosanitary issues
Plant Protection Advisor
Directorate of Plant Protection, Quarantine and Storage
Ministry of Agriculture
N.H. IV
Faridabad 121 001
Haryana
Phone: (91129) 241 3985
(9111) 2338 5026 (Delhi Office)
Fax: (91129) 241 2125
Email: ppa@nic.in
Website: www.plantquarantineindia.org
8)
Livestock and Products Imports

Joint Secretary (Administration)
Department of Animal Husbandry and Dairying
Ministry of Agriculture
Krishi Bhavan
New Delhi 110 001
Phone: (9111) 2338 7804
Fax: (9111) 2338 6115
Email: jsadd@nic.in
Website: http://dahd.nic.in/
82
Appendix VII. Select list of importers/distributors in India

S. No.
Company name
Address
Three Rings Imports and Exports Pvt

Ltd
#9 (Old # 5), Kuppuswamy St, Lotus Apartments,

T Nagar, Chennai 600017
Lotte India Corp Ltd
No 4/111, Mount Poonamalle Road, Manapakkam

Chennai 89
Polestar ventures Pvt Ltd
No. G-2 VS Manor, No. 2, Mannar Street, T-nagar,

Chennai 600017
Shahi Foods
No. 5H, Century Plaza, Teynampet, Chennai 600018
Universal Corp Ltd
4C, P M Twr, No. 37 Greams Road, Chennai 600006
AVT Garia Foods Pvt Ltd
No. 64, Rukmani Lakshmipathy Salai, Egmore Chennai
Oracle Trading Co. Pvt Ltd
Old No. 7, II cross Street, Dr Radhakrishna Nagar,

Thiruvanmiyur, Chennai 41
Overseas Trading
34/2 New No. 86, II Floor Mookathal Street,

Purasawalkam,Chennai 7
Tan Business Ventures Pvt Ltd
11/1, Mahalinga Chetty Street, Mahalingapuram, Chennai

600 034
10
Ajanthaa KTK Products (Distributor)
#12, Govindappa Naicken St (near Sevenwells Market),

Chennai 1
11
Eden's International (Distributor)
43/A, Second Floor, New Street, Nungambakkam,

Chennai 600 034
12
E Duraisamy and Bros
TB 110, Anna Fruit Market, Koyambedu, Chennai

600 092
13
Narang
#5, Muktha Gardens, Spur Tank Road, Chetpet, Chennai

600 031
14
Bon Appetit
2/16 Ambour Salai Puducherry 605 001
15
Kritimma International
1st Floor, Plot #1088, Near White Temple, Bhalaswa

Village Outer Ring Road, New Delhi 110 033
16
RPC Foods
M-412, Lado Sarai, New Delhi 110030
17
Max Foods
B 226 Ashok Vihar Phase-1, New Delhi 110052
18
Rai and Sons Pvt Ltd
9-A Connaught Place, New Delhi 110001
19
L-Comps and Impex
809-A, International Trade Tower, Nehru Place, New

Delhi 110019
20
Suresh Kumar and Co
A-17, Sonu Towers 2nd Floor, Dr Mukherjee Nagar Coml.

Complex, Delhi 110 009
21
S Naresh Kumar and Sons
D-397, New Subzi Mandi, Azadpur, Delhi 110033
22
KLG Import and Exports
B-160, New fruit market, Azadpur, New Delhi 110033
23
Agro World
C-601, New Subzi Mandi, Azadpur, Delhi 110033
24
Padma Fruits
JP-8, Opp MP Market, Near City Park Hotel, Pitampura,

Delhi 110034
25
Everest Exim Enterprises
Santa Mangesh, Savarkar Rd, Dombivli (E), Dutt-Thane
26
Chenab Impex Pvt Ltd
J-1A, Anja Ind Est, Saki-Vihar Rd, Andheri (E), Mumbai

72
27
Sankalp Retail Value Stores Pvt Ltd
RG Thadani Marg, Worli Sea Mace, Mumbai 18
28
Fortune Gourmet Specialities Pvt Ltd
107, Adyaru Ind. Est. Sun Mill Compd, Lower Parel,

Mumbai 13
83
S. No.
84
Company name
Address
29
RR Oomerbhoy
5, Sona Mahal, 143, Marine Drive, Nariman Road

Mumbai 400020
30
Euro Fruits Pvt Ltd
301, Vikas Commercial Center, Dr C G Rd, Chembur,

Next to Basant Cinema, Mumbai 400 074
31
Radhakrishna Foodland Pvt Ltd
Radhakrisha House, Majiwade, Thane (W) 400601
32
Universal Corporation Ltd
180/A, Malakpet Hyderabad 56
33
Kayempee Foods Pvt Ltd
40/P, CIE Gandhi Nagar, Kukatpally, Hyderabad
34
Globe Trade Associates
28/2/1, Old Ballygunge, 2nd Lane, Kolkata
35
M Agencies
4/4/40B, Banerjee Paru Road, Tollygunde Kolkata 41
36
Dutta Agency
4/1M, Abinash Chowdary Lane, Kolkata 46
37
Universal Corporation
20 Coal Dock Road, Khidderpore Kolkata
38
Exotica
14/A, Burdwan Road, Kolkata 700027
39
Jayam Viniyog and Mercantiles Pvt Ltd
9, 3rd Flr, Brabourne Rd, Brabourne Road, Kolkata

700001
40
Sai Foods
Shed No. 45, 60 ft. Road, JC Nagar Main Road,

Kurubarahalli, Mahalakshmipuram Post Bangalore
560086
41
Steward and Pantry
22, Cunningham Apts, 5, Maj. Gen, Loganathan Road,

Bangalore 560052
42
ST Marketing (Distributor)
#22, BDA Complex, Austin Town, Bangalore 47
43
Aditya Enterprises
#7, 6th Cross, Vasanth Nagar, Bangalore 560052
44
MRC Trading (Distributor)
APMCYard 560100
45
A Abdul Rahim Shariff and Sons
E'-Block, No. 34, Spl. APMC Sub Market Yard, Singena

Agrahara Hosur Road Cross, Huskur Post, Bangalore
560 100
46
G Sagar and Co (Distributor)
# 8, Muslim Hall Building Sethu Rao Street Cross,

Bangalore 560002
47
MRC Mandi (Distributor)
No. A5, APMC Yard, Huskur gate Bangalore 560100
48
IG International (Distributor)
F-85/86, APMC Fruit Market, Bangalore560100
49
Cosmo Fine Foods (P) Ltd
27/3891, Chakkalakkal Road, Perumanoor, PO Kochi

6282015
50
Daily Life Retail and Trading Limited
72 Marshalls Road, Chennai 600008
51
Arul Exports and Imports
56, Anna fruit Market, Koyambedu. Chennai
52
IFC International
B 153 New Subzi Mandi, Azadpur, Delhi 110033
53
T Venkataramiah and Co
B/3 Fruit Market Complex, Gaddiannram. Hyderabad

660060
FOOD AND TRADE

DEVELOPMENT DIRECTORATE
Department of Agriculture and
Food Western Australia
3 Baron-Hay Court South Perth
Western Australia 6151
Telephone: +61 8 9368 3382
Facsimile: + 61 8 9367 7389
www.agric.wa.gov.au
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Department of Agriculture and Food

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Indias market opportunities

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Indias market opportunities for imported fresh and

Executive Summary ...........................................................................................................

Overview of the Indian Agriculture and Food Processing sectors ...............................

Current status and trends in Indias imported food sector ...........................................

Overview of the food retail sector in India ......................................................................

Distribution structure, logistics and infrastructure development ................................

Pricing structure and tariffs .............................................................................................. 58

Regulatory framework and import procedure ................................................................. 66

Madras Consultancy Group

1.3 Scope of work

An overview of the Indian horticulture and food processing sector

Import of food products and countries of origin

Overview of the food retail sector in India

Distribution structure, logistics and infrastructure development

Pricing structure and tariffs

Regulatory and policy framework in India.

1.4 Research Methodology

Associations and Others

Madras Consultancy Group

1.5 Products covered

Fresh and processed meat and fish

Processed fruits and vegetables

1.6 Glossary of terms

Additional Custom duty

Agricultural and Processed Food Products Export Development Authority

Animal Plant Health Inspection Service (APHIS)

Compound annual growth rate

Central Committee For Food Standards

Central Food Technological Research Institute

Cost, Insurance and Freight

Central Sales Tax

Documents against acceptance

Department of Animal Husbandry and Dairying

Director General of Foreign Trade (DGFT)

Foreign Direct Investment

Foreign Exchange Management Act

Fruit Products Order

Food Safety and Standards Authority

Madras Consultancy Group

Table 1.2 Continued

Free Trade Agreement

Gross Domestic Product

Global Retail Development Index

Hazard Analysis Critical Control Points

Hindustan Unilever Limited

Indian Biscuit Manufacturers Association

Open General Licence

Office International Des Epizooties

Ministry of Food Processing Industries

The Marine Products Export Development Authority

Maximum Residue Limits

Maximum Retail Price

Prevention of Food Adulteration Act

Reserve Bank of India

Special Import Licence

Value Added Tax

Madras Consultancy Group