Pasta Import - India December 2008

Executive Summary Estimated worth USD XX mn in 2008 Unorganized sector has a monopoly over domestic production Largest exporter is A B and C are the most popular brands SAMPLE Market Drivers & Challenges Entry Route Rules and Regulations Drivers: Consumers developing tastes for international cuisines, strong growth in organized retail, and government policy towards boosting the industry Challenges: Lack of widespread consumer awareness, duty and tax structure, inconsistent supplies, and competition from unorganized sector Two possible approaches Importing though agents Setting up local operations Importing through agents is the preferred route for foreign brands Developing manufacturing unit locally is economically unjustified Pasta imports attract specific import duties and local taxes Food safety norms set by the government need to be followed The law requires specific information to be displayed on the packaged good

Estimated worth USD XX mn in 2008

Unorganized sector has a monopoly over domestic production

Largest exporter is A

B and C are the most popular brands

Drivers: Consumers developing tastes for international cuisines, strong growth in organized retail, and government policy towards boosting the industry

Challenges: Lack of widespread consumer awareness, duty and tax structure, inconsistent supplies, and competition from unorganized sector

Two possible approaches

Importing though agents

Setting up local operations

Importing through agents is the preferred route for foreign brands

Developing manufacturing unit locally is economically unjustified

Pasta imports attract specific import duties and local taxes

Food safety norms set by the government need to be followed

The law requires specific information to be displayed on the packaged good

Market Overview Drivers & Challenges Entry Route Rules and Regulations

Market Overview

Drivers & Challenges

Entry Route

Rules and Regulations

Italian is a popular cuisine in India and is driving growth in pasta imports Food imports are increasing by a% p.a. Italian food and especially pasta is one of the most popular foreign cuisines, predominantly in urban areas Domestic production exists with unorganized sector accounting for b% of the market However, there is a healthy demand for imported pasta, which has grown: u% p.a. by value v% p.a. by volume Uncooked pasta accounts for the bulk of imports although other types (except uncooked or stuffed) category is growing extremely fast X and Y are two popular imported brands SAMPLE Overview Source: Size and Growth Largest Exporting Countries (2003-2008) Country 1 w% Country 2 u% Others v% 2004 2005 2006 2007 2008 Volume Value a% USD mn ‘ 000 kg

Food imports are increasing by a% p.a.

Italian food and especially pasta is one of the most popular foreign cuisines, predominantly in urban areas

Domestic production exists with unorganized sector accounting for b% of the market

However, there is a healthy demand for imported pasta, which has grown:

u% p.a. by value

v% p.a. by volume

Uncooked pasta accounts for the bulk of imports although other types (except uncooked or stuffed) category is growing extremely fast

X and Y are two popular imported brands

Drivers & Challenges Government Initiatives Growth in organized retail industry Demand generated due to changing tastes and attitude Drivers Inconsistent supplies Government rules and regulations Competition from unorganized sector Creating Awareness Challenges

Import of pasta is subject to duties and taxes, food safety rules and mandatory packaging information Duties and taxes: Basic import duty, additional duty, education cess, Octroi, central sales tax, and VAT Various food safety rules also need to be adhered to such as Prevention Of Food Adulteration Act Packaging must display the following: Name of company and address of manufacturer Green or red sticker indicating vegetarian or non-vegetarian product Name and contact details of importer MRP, Month of import, Shelf life Ingredients used as per PFA SAMPLE Rules and regulations Duties, taxes and estimated margins Source: f% of total duty Education cess e% Custom cess d% Excise cess c% Spl. Additional Duty b% Additional Duty a% Basic Import Duty Import Duty z% (Mumbai) Octroi (variable; municipality/district level) y% Central Sales Tax (inter-state sales) x% VAT (state level) Domestic Taxes w% Retailer (% of retailer cost) v% Distributor (% of Distributor Cost Price) u% Importer (% of landed cost) Estimated Margins

Duties and taxes:

Basic import duty, additional duty, education cess, Octroi, central sales tax, and VAT

Various food safety rules also need to be adhered to such as Prevention Of Food Adulteration Act

Packaging must display the following:

Name of company and address of manufacturer

Green or red sticker indicating vegetarian or non-vegetarian product

Name and contact details of importer

MRP, Month of import, Shelf life

Ingredients used as per PFA

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