Reaching the consumers

Marketing opportunities

Consumer behavior

Some Indian consumers are aware of quality differences and insist on world-class products, many customers can sacrifice quality concerns for price reductions. The quality of after-sales service by the seller plays an important role when making a purchasing decision.

Consumer profile and purchasing power

Indians are now far more brand conscious, and this is generating demand for some products that were previously unfamiliar.
Moreover, the dynamism in country’s economy has resulted into an increase in purchasing power and an expansion of the middle class having higher disposable income levels. But much of their money is spent on need-based consumption rather than on luxury goods.

Consumers associations

India Consumer Association

Main advertising agencies

JWT (Hindustan Thompson Associates)
Ogilvy & Mather
Saatchi & Saatchi Pvt Ltd
Mudra Communication

Distributing a product

Evolution of the sector

There has been a significant expansion in distribution channels in India. The total number of retail distribution outlets in the country is estimated at over 12 million.

Most Indian manufacturers use the traditional three-tier selling and distribution structure: redistribution stockists, wholesalers and retailers. However, with the advent of shopping malls in the retail sector, manufacturers are now ready to supply directly to large retail outlets at discounted prices.

India still does not allow foreign direct investment in retailing, so foreign companies need to partner with local companies to enter the market. For more information on FDI & Retail sector, visit the site: Ministry of Commerce.

Market shares

Indian retail market size is estimated at USD180 billion and organized retailing is likely to grow rapidly: 30-50% annually during the next five years. Currently, the volume of organized retailing is very small compared to the size of the market.

Organizations in the retail sector

Retailers Association of India

Market access procedures

International Conventions

Member of World Trade Organisation
Party to the Washington convention on International trade in endangered species of wild fauna and flora
Party to the Basel convention on the Control of Transboudary Movements of Hazardous Wastes and their disposal
Party to the Montreal protocol on Substances that deplete the Ozone Layer
Party of the International coffee agreement 2001

Main International economic cooperation

India does not belong to any Customs Union.

It is a member of the South Asian Association for Regional Cooperation (SAARC) and multilateral and bilateral trade agreements with many countries.

Non tariff barriers

- Import Licensing: Though India has eliminated its import licensing requirements for most consumer goods, certain products like motorcycles and vehicles still require import licenses.
- Anti-dumping and countervailing measures: Such measures are imposed from time-to-time to protect the domestic manufacturers from dumping.
- Export subsidies and domestic support: Several export subsidies and other domestic support is provided to several industries to make them competitive internationally.
- Procurement: The Indian government allows a price preference for local suppliers in government contracts and generally discriminates against foreign suppliers.
- Service barriers: There are still some restrictions for foreign companies to enter some service-oriented sectors like insurance, banking, securities, motion pictures, accounting, construction, architecture and engineering, retailing, legal services, express delivery services and telecommunication.
- Other barriers: Equity restrictions and other trade-related investment measures are in place to give an unfair advantage to domestic companies.

For the most current information on India’s Prohibited Import List, please see: www.exim.indiamart.com/freedlist/prohibited.html

Customs duties and taxes on imports

The average customs duty is around 15%.

Though this is relatively high, but as per the WTO commitments India is going to slowly reduce it.

The Central Board of Excise & Customs- CBEC is the apex body for customs matters.

Customs classification

India uses the harmonized system.

Import procedures

Incase of EDI (Electronic Data Interchange): No formal Bill of Entry is filed as it is generated in the computer system, but the importer is required to file a cargo declaration having prescribed particulars required for processing of the entry for customs clearance.
Incase of non-EDI more documents are also generally required.
Green Channel facility : Some major importers have been given the green channel clearance facility. They have to make a declaration in the declaration form at the time of filing of Bill of Entry. The appraisement is done as per normal procedure except that there would be no physical examination of the goods.
For details, visit the website: Central Board of Excise & Customs- CBEC.

Importing samples

Samples for non-commercial use are allowed incase the goods are supplied free of charge.

 

For duty free clearance the value of individual sample should not exceed Rs.5000/- and aggregate value should not exceed Rs.60 000/- per year or 15 units of samples in a year. However, the Prototypes of engineering goods can be imported even if the value is more than Rs.5000/-.

For further information

Central Board of Excise and Customs
Ministry of Commerce and Industry
Ministry of Finance
Directorate General of Foreign Trade

Organizing goods transport

Main useful means

About 95% of the country’s trade by volume and 70% by value are moved through maritime transport.
India's new international status as IT and manufacturing hub has led to the growth of international air traffic. India has one of the largest road networks in the world, the National Highways (NHs), with a total length of 66 590 km, serve as the arterial network of the country, connecting the State capitals, ports and big cities.

Ports

Ports in India: Kolkata, Paradip, Visakhapatnam, Chennai, Ennore, Cochin, New Mangalore, Mormugao, Mumbai, Kandla

Airports

Delhi airport
Kolkata airport
Mumbai airport
Chennai airport

Sea transport organizations

Department of Shipping
Shipping Corporation of India

Air transport organizations

Directorate General of Civil Aviation (DGCA)
Airports Authority of India (AAI)

Road transport organizations

Department of Road Transport and Highways
National Highways Authority of India (NHAI)
Border Roads Organization (BRO)

Identifying a supplier

Type of production

The main sectors are heavy and light engineering, steel, automotive, cement, biotechnology, drugs and pharmaceuticals, food processing, mines & minerals, textiles and fertilizers. Automotive is one of the largest industrial sectors in the country. Food processing sector is another high potential area.

Business directories

Indian Yellow Pages
Indiamart
Business Online India
India Nexus

Manufacturers associations of the main industries

Society of Indian Automobile Manufactures (SIAM)
Indian Drug Manufacturers Association (IDMA)
Manufacturers Association of Information Technology (MAIT)
The Clothing Manufacturers' Association Of India (CMAI)
Indian Machine Tool Manufacturers' Association (IMTMA)
All India Electric Motor Manufacturers Association (AIEMMA)
The Fertilizer Association of India (FAI)

Trade Agencies and their representations abroad

Federation of Indian Chambers of Commerce and Industry (FICCI)
Ministry of Commerce & Industry
The Associated Chamber of Commerce and Industry of India

Enterprises federation

Federation of Indian Micro and Small & Medium Enterprises
Confederation of Indian Industry (CII)
The Associated Chamber of Commerce and Industry of India
Indian Industries Association (IIA)