InfoQuest (July 24, 2019) -- India boasts an enormous market. In 2018, 266 million people had purchasing power, accounting for 20 percent of the total population (1.332 billion), according to Ms. Supatra Sawaengsri, executive director of Thai Trade Center and consul (Commercial), Royal Thai Consulate General in Mumbai. Against the backdrop of insufficient grain production in the country, the growth rate of organic farming acreage in India stands at about 6 percent every year. Organic products categorized into general, medium and high quality are also growing fast. Currently, organic stores are only available in big cities in the country, so online trading presents a golden opportunity for Thai exporters and investors.
After Narendra Modi won re-election in May 2019, the Indian government would continue to push forward the policies to promote organic agriculture that were launched during Modi's last term as India's prime minister. India's organic food industry doubled between 2013 and 2018. From 2016 to 2017, the total market value of all types of organic food in India registered about 20 billion baht (40 billion rupees), up 25 percent. The organic market is expected to be promising too this year. The market value of the organic food industry is estimated to increase to 50-60 billion baht (100-120 billion rupees) by 2020.
At present, more than 200 organic foods and products are sold in India. The fastest growing categories include food and beverages, textiles and beauty products such as facials and body care products. Although organic products in India are more expensive than other products, the market potential is huge. Popular products include organic vegetables (tomatoes, broccoli, green peppers and bitter melons), fruit (bananas, mangoes, and pomegranates), fruit juice (coconut milk, pineapple juice, gooseberry juice, aloe vera juice, sugar cane juice, and grains (corn and corn starch), and other products such as eggs and coffee.
Ms. Supatra said the biggest factor in the growth of organic consumption in India is contributed to the advanced IT system. E-commerce is playing an increasingly important role. Now there are more than 25 online platforms offering organic products such as ISayOrganic, JoyByNature, ekgaon, OgarnicShop, Farm2Kitchen, Organic Shop and Naturally Yours. These platforms provide consumers with fast and convenient payment channels. Meanwhile, Indians are becoming more familiar with using electronic devices. In addition, the Indian government's campaigns about the risks of chemicals on human health have also made organic consumption more popular, and manufacturers compete to produce new products to provide more choices for consumers. Above all, the purchasing power of India's middle class is climbing.
"Thai exporters should take advantage of the Thai-India Free Trade Agreement, for India waives import duties and allows online sales of a variety of fresh fruit from Thailand, such as mangosteen, mango, durian, rambutan, guava and longan. If Thai producers can switch from producing common fruit to producing organic fruit, and consider India as the end market, additional revenue will be created", said Ms. Supatra.
In 2017-2018, India produced about 1.7 million tons of certified organic products, such as sugar canes, grains, cottons, legumes, herbs, tea, fruit, dried fruits, vegetables, coffee, as well as vegetable oil, cereal sugars, aromatic plants, spices and seasonings. The planting area was about 22.25 million rai (3.56 million hectares), mainly distributed in Madhya Pradesh, Maharashtra, Karnataka, Uttar Pradesh and Rajasthan. About 458 tons of organic products were exported, worth 16.648 billion baht (515.44 million U.S. dollars, based on the 2018 average exchange rate of 32.30 baht to the U.S. dollar). The main export markets were the United States, the European Union, Canada, Switzerland, Australia, Israel, South Korea, Vietnam, New Zealand and Japan, and the main export products included vegetable oils, cereals, grains, coffee, tea, dried fruits, and spices.
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