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Opportunities in the Food Markets of India

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Opportunities in the Food Markets of India OPPORTUNITIES IN THE FOOD MARKETS OF INDIA For further information about this report contact: Dennis Pervis, Senior Markets Analyst Marketing and Trade Team Agriculture and Agri-Food Canada British Columbia Regional Office #420 - 4321 Still Creek Drive Burnaby, B.C. V5C 6S7 Email: [email protected] Last Updated: February, 2012 Although every effort is made to ensure that the information is correct. Agriculture and Agri- Food Canada assumes no responsibility for its accuracy, reliability, or for any decisions arising from the information contained herein. OPPORTUNITIES IN THE FOOD MARKETS OF INDIA TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................... vii I. PURPOSE ................................................................1 II. BUSINESS PARADIGMS ...................................................1 A. The Competitive Environment ..............................................1 B. Pure Export ............................................................2 C. Export with Agreements ..................................................2 D. Multi-National Operations .................................................2 III. PROFILE OF INDIA ........................................................3 A. Geography .............................................................3 1. The Himalayan Mountains ..............................................3 2. The Gangetic Plain ....................................................3 3. Peninsular India ......................................................4 B. Demography ............................................................4 C. Culture ................................................................5 1. History .............................................................5 2. Food ...............................................................5 a) Traditional .......................................................5 b) Recent Trends ....................................................7 i) Shopping Habits ................................................7 ii) Health and Wellness ...........................................11 3. Religions and Philosophies ............................................12 D. Trade ................................................................13 1. Data Sources and Valuations ...........................................13 2. Currencies .........................................................14 3. Imports ............................................................14 4. Exports ............................................................15 E. International Transportation - Canada to India ................................16 1. Ocean .............................................................16 2. Air Freight .........................................................16 F. Economic .............................................................17 1. Historical Development ...............................................17 2. Recent Conditions ...................................................17 3. Determinants of Food Demand .........................................19 4. Consumer Expenditures on Food and Non-Alcoholic Beverages, by Political Division ..................................................................21 ii 5. Determinants of Food Imports ..........................................22 G. The Regions of India ....................................................24 1. East & Northeast India ................................................24 2. North India .........................................................25 3. South India .........................................................25 4. West India .........................................................25 IV. RISK FACTORS .......................................................25 A. Internal Political/Economic Conditions ......................................25 B. External Political/Economic Conditions .....................................26 C. Handling Risks of International Trade .......................................26 V. PRODUCT ANALYSIS ....................................................27 A. Selected Products Imported by India From Canada .............................27 B. Selected Products Imported by India But Currently Not From Canada ..............30 VI. GRID ANALYSIS ......................................................35 A. All Agricultural, Agri-food & Seafood Products ...............................35 B. Agricultural Agri-food & Seafood Imports of India From Canada vs From the Whole World ................................................................36 VII. PRICE WORK-UPS ....................................................39 A. The Research Price Work-up ..............................................40 B. Prices ................................................................40 VIII. IDENTIFICATION OF CONTESTABLE MARKETS .........................41 A. Dairy Products .........................................................42 B. Opportunities ..........................................................42 C. Product Groups with an Index of Indicators of 1.00 ............................48 D. Product Groups with an Index of Indicators from 0.75 to 0.99 ....................51 E. Product Groups with an Index of Indicators from 0.50 to 0.74 ....................51 F. Product Groups with an Index of Indicators from 0.25 to 0.49 ....................53 G. Product Groups with an Index of Indicators from 0.00 to 0.24 ....................54 IX. CONCLUSIONS .......................................................55 X. CONTACTS IN INDIA ..................................................56 XI. CONTACTS IN CANADA ...............................................58 APPENDIX 1 ................................................................59 APPENDIX 2 ................................................................85 iii Canada - New Zealand/US - Measures Affecting the Importation of Milk and the Exportation of Dairy Products .......................................................85 A. The WTO Rulings Regarding Dairy Exports ..................................85 B. The Mutually Agreed Solutions ............................................86 ENDNOTES ................................................................88 iv LIST OF TABLES Table 1. Selected Traditional Cuisines of India .....................................5 Table 2. Estimated Consumption of Packaged and Processed Food Products. India. 2006 and 2011. ...............................................................9 Table 3. Value of Sales of Health and Wellness Classifications. India ..................11 Table 4. Religions and Philosophies of India - Food Preferences. .....................12 Table 5. Average Tariff Rates Applied on Agricultural, Agri-food, Fish and Seafood Products, 2008. India .........................................................18 Table 6. Determinants of Changes in the Effective Demand for Food. 2005 to 2011. ......19 Table 7. Expenditure on Food and Non-alcoholic Beverages in Selected Political Divisions of India. .............................................................21 Table 8. Production and Annual Increases of Selected Crops, India ....................22 Table 9. Tariff Rates on Selected Imported Products. India. 2008. .....................23 Table 10. Ratios of Indian CIF Import Prices from Canada to Indian CIF Import Prices from the World. Selected Products. 2010. ........................................40 Table 11. Summary of Indicators of Contestability of Selected Markets. India. ............43 Table 12. Area, Population and NSDP of States and Union Territories of India. 2011. ......60 Table 13. Population and GDP. India. 1992 - 2012. .................................62 Table 14. GDP by Origin, 2011. India. ...........................................63 Table 15. Percent of Employment by Sector. India. .................................64 Table 16. Distribution of Households by Disposable Income. India .....................65 Table 17. Value and Volume of Retail Sales of Packaged Food. India. 2005 and 2010. .....65 Table 18. Compound Annual Rates of Change of Production and Consumption (Supply) of Selected Products. India. 1997 - 2007. ....................................68 Table 19. Indicative CIF Prices of Imports to India from Canada, the World and Major Competitors. 2010. ...................................................69 Table 20. Canada's WTO Dairy Export Subsidy Commitment Levels ...................86 v LIST OF FIGURES Figure 1. Population Pyramid. India. 2012. .........................................5 Figure 2. Distribution of Households by Disposable Income Classes. India. ...............7 Figure 3. Proportion of Packaged Food Sales by Distribution Format. India. ..............8 Figure 4. Value of the INR Expressed in CADs (CAD per INR). January 1993 to February 2012. ..............................................................23 Figure 5. Percentage Changes in Selected Indian Agricultural, Agri-food & Seafood Imports - From Canada vs From the World. 2005 - 2010. Part 1. .......................38 Figure 6. Percentage Changes in Selected Indian Agricultural, Agri-food & Seafood Imports - From Canada vs From the World. 2005 - 2010. Part 2. .......................39 Figure 7. Political Map of India. 2001. ...........................................59 vi EXECUTIVE SUMMARY INDIA: • is the second most populous country in the world after China; with 1.21 billion people increasing at an annual rate of 1.64%. - A positive influence on the demand for food; • experienced
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