FINAL-MRP

INTERNATIONAL INSTITUTE OF FOREIGN TRADE & RESEARCH, INDORE

“Export potential of processed foods from India to UAE”

Research project submitted in partial fulfillment of course code 606 of Bachelor of

Business Administration (Foreign Trade) Years as per the curriculum requirement of

BBA (FT) for DAVV, Indore (MP).

Under the supervision of Submitted by:

Prof. Gopal Singh Jadhav Himanshu Jain(Faculty Guide)

INDEX

S.N. CONTENTS PAGE NO.

I Certificate by the student

II Certificate by the supervisor

III Preface

IV Acknowledgement

V Rational

VI Review of literature

1 Introduction 1

2 Objective & methodology 2

3 Country profile of India Food processing industry in India־

3

4 Country profile of UAE 11

5 Product profile 15

6 Export figures 16

7 Government support APEDA ־ NHB־ Agri Export Zone־

36

8 WTO related issuesGlobal challenges־ Measures־

44

9 SWOT analysis 49

10 Conclusion 51

11 Recommendation 52

12 Bibliography 53

Certificate by the Student

I, Himanshu Jain hereby certify that the project titled “Export potential of

processed foods form India to UAE” has been undertaken under the supervision of

Prof. Gopal Singh Jadhav faculty of IIFTR, towards partial fulfillment of Degree

of Bachelor of Business Administration (Specialization).

It is further certified that the project report compiled by me is my own work and to the

best of my knowledge, it does not contain any part of any work, which has been

submitted for the award of degree in this University, or any other University/ Deemed

University without proper citation.

Place: Indore

Date: (Himanshu Jain)

Certificate by the Supervisor

This is to certify that the project titled “Export potential of processed foods from India

to UAE” is a piece of research work has been done by Himanshu Jain under my guidance

and supervision towards partial fulfillment of Degree of Bachelor of Business

Administration (Specialization). I recommend that the project to be submitted to Devi

Ahilya University, Indore.

It is further certified that the project report compiled by his own work and I recommend

that the project to be submitted to D.A. University.

(Project Guide) (Director/ Principal)

Prof. Gopal Singh Jadhav

Date:

PREFACE

Working on things which are of your interest always gives pleasure.

I am very much pleased with the things going on my research project as it suited to the field which I like most. Processed food sector and UAE both attracted my way of approaching in completing the project. When I choose the topic-Export Potential of processed foods to UAE, as my research project, the first thing that came in my mind was that I am working on that topic in which INDIA almost rules the world.

As being student of Foreign Trade, I felt that this is the topic where in-depth study could be possible. The Processed food industry is at transition stage, where we can say it is reaching towards mature stage from growing stage. Our exports are getting increased and many emerging markets are coming up. UAE along with other countries is becoming our major market. This fact attracted me to relate my research on processed food industry with UAE.

At the completion stage of my project, I feel that ocean is vast entity on earth and for human beings; it’s not possible to have a complete picture within a short span of time.

Place-INDORE Himanshu JainDated- B.B.A (F.T) 3y.r.s SEM-Vl th IIFTR, INDORE (M.P.)

ACKNOWLEDGEMENT

Knowledge is an expression of experience gained in life. It is the choosiest possession,

which should not be shelved but showed, be shared with others. In this respect, I am

extremely fortunate in having Prof. Gopal Singh Jadhav project guide on this

research work. I have a debt of gratitude to him for his valuable guidance, supervision

and encouragement.

I would like to thanks Mr. library in-charge for providing me books according to my

needs and Mr. DEVENDRA SINGH THAKUR for allowing and giving appropriate help

during computer operations. Besides this, I would be happy to extend my deepest regards

to my family and friends for their strong support during the preparation of this project.

Further more, I would also like to extend my thanks to director of I.I.F.T.R. for helping

me to give my desirable subject for research project.

Thanking you

Himanshu Jain

RATIONAL

During the graduate program of BBA (FT) from IIFTR INDORE, area of my interest is

Logistics & International Marketing – thanks to the programmed because it has

contributed a lot to my thrust of international marketing. As I am in the sixth semester of

the programmed I would like to utilize the knowledge gained so far in my research

project of export potential of processed foods from India to UAE.

REVIEW OF LITERATURE

Books are a resource of knowledge. Knowledge is a vital substance for success. To keep ourselves updated with the changes in the world modern age books are right resource and a proper means to acquire knowledge. Following books are used by me for the preparation of this project.

1. Export Statistics - Agro and Food Products Title: Export statistics for agro and food products: India 2006-10Pub. Details: Agricultural and Processed Food Products Export Development Authority (APEDA), New Delhi, 2010Notes: This handbook provides an overview of India's agro exports with graphical depiction of major product groups and major destinations along with other useful information on online facilities available at APEDA website; gives details of exports of major product groups, country wise; and presents specific country profile showing major products exported to particular country

Keywords: Export statistics, Agricultural and processed food products, Agriculture and food products

2. TRADE AND INVESTMENT Title: Trade, investment, industry: an Indian perspectiveAuthor: Kamal NathPub. Details: Confederation of Indian Industry, New Delhi, 2010Summary: Since his appointment as India's Minister of Commerce & Industry, Kamal Nath has delivered scores of speeches on a variety of economic issues, particularly trade and investment. He has spoken at gathering of nations, inter-governmental conclaves, international business meets and to groups of parliamentarians, students and journalists.This collection of statements is a virtual record of the process of change that India has witnessed in recent years. It is a fascinating account of the evolution of modern Indian economic power.

Keywords : Indian Industry, Indian economy, Economic growth, WTO and Multilateral trade concerns, Bilateral and regional trade, Investment Promotion, Globalisation, Emerging markets, Sector specific concerns

3. International Competitiveness & Knowledge-based Industries in India This book analyses the international competitiveness of India’s exports through an empirical analysis covering a sample of more than 4000 enterprises. The focus is on corporate strategies such as scale of operations, technological dynamism, multinational affiliation, and outward investments. The volume advocates a strategic approach to enhance export competitiveness of enterprises in India and outlines policy lessons for the government, industry bodies, and enterprises.

Published in 2009by:

OXFORD UNIVERSITY PRESS INDIAC3 & C38, Sector 59,Gautam Buddha NagarNoida 201301Phones: 0091 120 2587738/42/43/45Fax: 2587741 www:oup.co.in

4. WORLD TRADE AND DEVELOPMENT REPORT 2009 Building a Development-Friendly World Trading System

The World Trade and Development Report is an invaluable resource for policymakers, development economists, civil society organizations, and all others concerned about making globalization and trade work for development.

Published by:

RISResearch and Information Systemfor Developing Countries Core IV-B, Fourth Floor, India Habitat Centre,Lodhi Road, New Delhi-110 003, India.Ph. 91-11-24682177-80 Fax: 91-11-24682173-74Email: [email protected]

mailto:[email protected]

INTRODUCTION

India has very diverse agro-climatic conditions which are conductive for growing a large

variety of horticultural crops such as fruits, vegetables, ornamental crops, medicinal and

aromatic plants, spices and plantation crops. India has maintained leadership in the

production of many commodities like mango, banana, coconut, areca nut, cashew, ginger,

turmeric and black pepper and India is presently the second largest producer of fruits and

vegetables in the world.

In this project I have put in concerted efforts to study the food processing industry in

India and tried to find the export potential of processed food items from India to U.A.E.

by analyzing the export trends of items such as mango pulp, processed guava, processed

pineapple from India. The data is collected from secondary sources like APEDA

magazines etc.

The major forms in which processed fruits and vegetables items are exported from India

to U.A.E. are in the form of pulp, juices and dehydrated. Mainly vegetable products are

exported in the dehydrated form. Dehydrated vegetables are prepared using the method of

dehydration. Dehydration is a method of food preservation in which moisture (primarily

water) is removed from the food item. It inhibits the growth of microorganisms and often

reduces the bulk of food. With present technologies, moisture levels have been reduced to

2% or 3%.

The processed food industry faces many problems and challenges in India. Like plethora

of laws (lack of integrated food laws), lack of modern techniques of farming/processing

and lack of good cold chain & storage systems. Due to these problems fruits, pulses,

vegetables and grains worth Rs.58000 crore get wasted of every year. Also the worst part

is that only 2% of fruits & vegetables are processed in India, against 80% in Malaysia,

78% in the Philippines, 70% in Brazil and 30%in Thailand.

But there is no dearth of opportunities in this sector. With global supermarket majors

such as Wal-Mart, Tesco and Carrefour among others increasing sourcing of processed

foods from the country it makes monetary sense for local companies to enter/expand in

this arena.

OBJECTIVE AND METHODOLOGY

The objective is to study the export potential of processed food items from India to

U.A.E. It is a promising sector with high potential of growth. Given a wide variety of

soils and agro-climate regions, India has a tremendous potential in agriculture and

horticultural based products.

My objective is to study the export trends of these various items as also the position of

production of processed foods from India to U.A.E. so as to analyze the export potential

of processed foods items from India.

Methodology adopted in this study is to collect data from secondary sources.

COUNTRY PROFILE OF INDIA

India is one of the world’s major food producers but accounts for less than 1.5 per

cent of international food trade. This indicates vast scope for both investors and

exporters. Food exports in 1998 stood at US $5.8 billion whereas the world total

was US $438 billion.

The Indian food industry’s sales turnover was Rs 140,000 crore in the year 2008.

The industry requires about Rs 29,000 crore in investment over the next five years

to 2010 to create necessary infrastructure, expand production facilities and state-

of-the-art-technology to match the international quality and standards.

The office of the Agricultural Affairs of the USDA / Foreign Agricultural

Services in New Delhi says that one of India’s proudest accomplishments has

been achieving a tenuous self-sufficiency in food production and that the country

produces a wide variety of agricultural products at prices that are at or below

world values in most cases.

The Indian palate is accustomed to traditional foods, mostly wheat and rice-based,

rather than potato and corn-based western palate. In marketing perspective, this is

considered an important factor for foreign marketers.

The USDA report says initially consumer-ready food products may have to be

tailored to include Indian spices and traditional ingredients. In addition to

traditional tastes, there are other social factors which affect consumption in India.

Hindus account for approximately 80 per cent of India’s population, and while

only 25 or 30 per cent are strict vegetarians, beef slaughter is prohibited in all but

two states (Kerala and West Bengal) and consumption of other meats is limited.

Incidentally, India is the only country where the US-based McDonalds sells its

burgers without any beef content and even offers purely vegetarian burgers.

India’s middle class segment will hold the key to success or failure of the

processed food market in India. Of the country’s total population of one billion,

the middle class segments account for about 350-370 million. Though a majority

of families in this segment have non-working housewives or can afford hired

domestic help and thus prepare foods of their taste in their own kitchens, the

profile of the middle class is changing steadily and hired domestic help is

becoming costlier. This is conducive to an expansion in demand for ready-to-eat

Indian-style foods.

India’s food processing sector covers fruit and vegetables; meat and poultry; milk

and milk products, alcoholic beverages, fisheries, plantation, grain processing and

other consumer product groups like confectionery, chocolates and cocoa products,

Soya-based products, mineral water, high protein foods etc.

According to latest official statistics, India exported processed fruits and

vegetables worth Rs 5240 million in 1997-98. The horticulture production is

around 102 million tones. Foreign investment since 1991, when economic

liberalization started, stood at Rs 8,800 crore. Products that have growing

demand, especially in the Middle East countries include pickles, chutneys, fruit

pulps, canned fruits, and vegetables, concentrated pulps and juices, dehydrated

vegetables and frozen fruits and vegetables.

Another potential processed food product is meat and poultry products. India

ranks first in world cattle population, 50 per cent of buffalo population and one-

sixth of total goat population of the world. Buffalo meat is surplus in India. There

is vast scope to set up modern slaughter facilities and cold store chains in meat

and poultry processing sector. India’s current level of meat and meat-based

exports is around Rs 8,000 million. In last six years foreign investment in this

segment stood at Rs 5,000 million which is more than 50 per cent of the total

investment made in this sector.

Compared with meat, poultry industry has registered significant growth. India

ranks fifth in the world with annual egg production of 1.61 million tones. Both

poultry and egg processing units have come in a very big way in the country.

India is exporting egg powder, frozen egg yolk and albumin powder to Europe,

Japan and other countries. Poultry exports are mostly to Maldives and Oman.

Indian poultry meat products have good markets in Japan, Malaysia, Indonesia

and Singapore. While meat products registered a growth of 10 per cent, eggs and

broilers registered 16-20 per cent growth.

There are about 15 pure line and grand parent franchise projects in India. There

are 115 layer and 280 broiler hatcheries producing 1.3 million layer parents and

280 million broiler parents. They in turn supply 95 million hybrid layer and 275

million broilers, day-old chick. Presently there are only five egg powder plants in

India which is considered insufficient in view of growing export demand for

different kind of powder - whole egg, yolk and albumen. The scope of foreign

investment and state-of-the-art technology in this field is therefore tremendous.

Milk and milk products is rated as one of the most promising sectors which

deserves foreign investment in a big way. When the world milk production

registered a negative growth of 2 per cent, India performed much better with 4 per

cent growth. The total milk production is around 72 million tonnes and the

demand for milk is estimated at around 80 million tonnes.

By 2007, the value of Indian dairy produce is Rs 1,000,000 million. In last six

years foreign investment in this sector stood at Rs 3600 million which is about

one-forth of total investment made in this sector. Manufacture of casein and

lactose, largely being imported presently, has good scope. Exports of milk

products have been decanalised.

Grains could emerge as a major export earner for India in coming years. India’s

food grains production is now at around 225-230 million tones. These include

rice, jawar, bajra, maize, wheat, gram and pulses. Indian basmati rice enjoys

command in the international market. Besides growing Middle East market for

basmati rice, many other countries are showing interest for this food grain. In

2008-09, export of basmati and non-basmati rice stood at Rs62000 million. There

is a total rice milling capacity of 186 million tones in the country.

Among plantation, tea emerged as major foreign exchange earner. India is the

largest producer and exporter of black tea. However, the most worrying factor for

Indian tea industry is that from early next year with the implementation of tea

imports into the country, India tea may face a stiff competition within the country

as well; specially threat of Sri Lanka’s presence in the Indian market is looming

large.

The current year’s tea export prospect is not that very good in terms of forex

earnings because international prices have fallen significantly this year. India

exports between 150-170 million kilogram’s of tea per annum. Of course, the

scope of foreign investment in this sector is good and the multinational tea

companies would either be trying for marketing joint ventures with the Indian

producers or acquire stakes in Indian tea companies. There is a strong possibility

of third country exports through such joint venture as quality wise still Indian teas

are ruling the international market.

Alcoholic beverages are another where India witnessed substantial foreign

investment. Foreign investment in this sector stood at Rs 7000 million which

about 70 percent of the total investment made so far. The IMFL (Indian Made

Foreign Liquor) primarily comprises wine, vodka, gin, whisky, rum and brandy.

Draught beer is a comparatively recent introduction in the Indian market. The

Indian beer market is estimated at Rs7000 million a year. One of the major

advantages for any investor eyeing the Indian liquor market is that India offers

enough raw materials like molasses, barely, maize, potatoes, grapes, yeast and

hops for the industry.

Yet another catchy investment sector is fisheries. There is growing canned and

processed fishes from India. The marine fish include prawns, shrimps, tuna,

cuttlefish, squids, octopus, red snappers, ribbon fish, mackerel, lobsters, cat fish

etc. In last six years there was substantial investment in fisheries to the tune of Rs

30,000 million of which foreign investments were of the order of Rs 7000 million.

The potential could be gauged by the fact that against fish production potential in

the Exclusive Economic Zone of 3.9 million tones, actual catch is to the tune of

2.87 million tones. Harvesting from inland sources is around 2.7 million tones.

The biggest bottleneck in expanding the food processing sector, in terms of both

investment and exports, is lack of adequate infrastructure.

Without a strong and dependable cold chain vital sector like food processing

industry which is based mostly on perishable products cannot survive and grow.

Even at current level of production, farm produce valued at Rs 70,000 million is

being wasted every year only because there is no adequate storage, transportation,

cold chain facilities and other infrastructure supports. Cold chain facilities are

miserably inadequate to meet the increasing production of various perishable

products like milk, fruits, vegetables, poultry, fisheries etc.

Prevention of Food Adulteration laws is not only stringent one but time

consuming also. It is considered as an archaic and no industry friendly food law.

It substantial varies from Codex standard. Harmonization of multiple food laws is

an urgent necessity.

FOOD PROCESSING INDUSTRY IN INDIA

FOOD PROCESSING

Food processing involves any type of value addition to agricultural or horticultural

produce and also includes processes such as grading, sorting and packaging which

enhance shelf life of food products.

FOOD PROCESSING INDUSTRY IN INDIA

The food processing industry provides vital linkages and synergies between industry and

agriculture. The food processing industry sector in India is one of the largest in terms of

production, consumption, export and growth prospects. The food processing industry is

both nascent and highly fragmented. It employs over 1.6 million people, or nearly a fifth

of the country’s industrial workforce. The output from the sector is estimated at $65-70

billion or about Rs.300000 crore. The sector has been growing at about 8% of the year.

With rising incomes and demographic pressure, growth may soon register 10%. India’s

processed food industry accounts for 14% of total industrial output and 6.5% of gross

domestic product.

SECTORAL OVERVIEW

India has arable land of 184 million hectares and produces annually 90 million tones of

milk (highest in the world), 150 million tones of fruits and vegetables (second largest),

485 million livestock (largest), 204 million tones food grain (third largest), 6.3 million

tones fish (third largest), 489 million poultry and 45200 million eggs. India’s agricultural

production base is huge. However, processing level is very low i.e. around 2% in fruits

and vegetables, 26% for marine, 6% for poultry and 20% for buffalo meat. The share of

India’s export of processed food in global trade is only 1.5%. Hence, there is immense

potential for investment in this sector.

PRODUCT RANGE

India’s food processing sector covers a wide range of products like fruit pulps

particularly of mangoes & tomatoes, ready to serve juices, canned fruits, jam, fruit juice

concentrate, pickles, frozen fruits, dehydrated & freeze dried vegetables, canned

mushrooms, squashes, meat and poultry, milk and milk products, alcoholic beverages,

fisheries, plantation, grain processing and other consumer product groups like

confectionery, chocolates and cocoa products, Soya-based products, mineral water, high

protein foods, etc.

EXPORT DESTINATIONS

The major export destinations of processed food items are U.A.E., UK, Sri Lanka,

Malaysia, Singapore, USA, Russia, Netherlands and France.

EXPORT OF PROCESSED FOOD PRODUCTS

In the year 2009-10 the total export of processed food products were in the order of

1905519 MT valued at Rs.7539.43 crore. The detail product list is shown in the table

below.

Items Quantity in MT Value in Rs.

Crore

Processed fruits and vegetables

Dried and preserved vegetables 124496 364.11

Mango Pulp 134613 364.24

Pickle and Chutney 135382 260.98

Other Processed fruits and vegetables 107335 370.21

Total for processed fruits and vegetables 501826 1359.54

Animal Products

Buffalo Meat 459938 2629.57

Sheep/Goat meat 7177.51 80.37

Poultry Products 145889 167.58

Dairy products 76515 668.50

Animal casings 1125.82 17.51

Processed meat 256.04 2.43

Total for animal products 690901 3566.96

Other Processed foods

Groundnuts 190053 513.69

Guar gum 186718 1049.23

Jiggery and confectionary 107197 227.57

Cocoa products 2147.09 21.83

Cereal preparations 76880.6 393.96

Alcoholic and non alcoholic beverages 49587.9 117.20

Miscellaneous preparations 49606.7 225.77

Milled products 50901.5 64.68

Total for other processed food 713092 2613.93

Grand total 1905519 7539.43

COUNTRY PROFILE OF U.A.E. (UNITED ARAB EMIRATES)

HISTORY-

Prior to independence, the U.A.E. was Trucial Oman, also known as the Trucial States,

and the component sheikhdoms of the territory were under British protection.

Although, from 1892, the United Kingdom assumed responsibility for the Sheikhdoms

defense and external relations, they were otherwise autonomous and followed the

traditional form of Arab monarchy, with each ruler having virtually absolute power over

his subjects. In 1952 a local body, the Trucial council, comprising the rulers of the seven

Sheikhdoms, was established. The object of the council was to encourage the adoption of

common policies in administrative matters, possibly leading to a federation of the states.

Petroleum, the basis of the area’s modern prosperity, was first discovered in 1958, when

deposits were located beneath the coastal waters of Abu Dhabi, the largest of the

sheikhdoms.

Onshore petroleum was found in Abu Dhabi in 1960. Commercial exploitation of

petroleum began there in 1962, providing the state with greatly increased revenue.

However, Sheikh Shakhbut bin sultan annahyan, the ruler of Abu Dhabi since 1928,

failed to use the income from petroleum royalties to develop his domain. In Jan.1968 the

United Kingdom announced its intention of withdrawing British military forces from the

area by 1971. In March 1968 the Trucial States joined nearby Bahrain and Quatar (which

were also under British protection) in what was named the Federation of Arab Emirates.

It was intended that the federation should become fully independent, but the interests of

Bahrain and Quatar proved to be incompatible with those of the smaller sheikhdoms, and

both seceded from the federation in August 1971 to become separate independent states.

In July six of the Trucial States (Abu Dhabi, Dubai, Sharjah, Umm al Qaiwain, Ajman

and Fujairah) had agreed on a Federal Constitution for achieving independence as the

UAE’s. the U.K. accordingly terminated its special treaty relationship with the states, and

the U.A.E. became independent on 2 December 1971. The remaining sheikhdom, Ras al-

khaimah, joined the U.A.Es in February 1972. At independence Sheikh Zayed of Abu

Dhabi took office as the first president of the U.A.Es Sheikh Rashid bin said al-maktoum,

the Ruler of Dubai since 1958, became vice-president, whiles his eldest son, Sheikh

maktoum bin Rashid al-maktoum (crown prince of Dubai), became prime minister in the

federal council of ministers.

In October 1990, upon the death of his father, Sheikh Maktoum acceded to the positions

of ruler of Dubai and vice-president and prime minister of the U.A.Es.

The U.A.E. was a founder member of the GCC of the Gulf (generally known as the Gulf

Cooperation Council) in May 1981. The GCC aims to achieve greater political and

economic integration between Gulf countries, and from 1983 onwards, the U.A.Es took

part in joint military exercises with the other member states.

Since the Arab-Israeli war of October 1973, in which it strongly supported the Arab

cause, the UAE has contributed large sums of aid to Arab countries. Despite giving aid to

Iraq in the Iran-Iraq war (1980-88), diplomatic relations with Iran were maintained, and

the UAEs offered to mediate between the two countries.

In common with the other Arab states, the UAE’s condemned the 1979 Camp David

agreements between Egypt and Israel, and diplomatic relations with Egypt was severed.

Full diplomatic relations were restored in November 1987. Commercial links have since

been fastered by the two countries.

COUNTRY OVERVIEW-

President: - Sheikh Zayed bin Saltan Al Nahayan.

Prime Minister; - Sheikh Maktoum bin Rashid al-Maktoum.

Population: - 4.7 million

Location/Size: - Persian Gulf between Oman and Saudi Arabia/30,000 square miles.

Major Cities: - Abu-Dhabi (capital), Dubai, Sharjah, Al-Ain.

Languages: - Arab (official), Persian, English, Hindi, Urdu.

Ethnic Groups: - Arab (UAE citizens) (19%), other Arab and Iranian (23%), South Asian

(50%), other expatriate (Western & East Asian) (8%).

Religion: - Muslim 96% (shi’a 16%), Christians, Hindu, other 4%.

Government Structure-

The UAE is a federation of seven emirates – Abu Dhabi, Dubai, Sharjah, Ajman,

Fujairah, Ras al-Khaimah, and Umm al-Qaiwain. Political power is concentrated in Abu

Dhabi, which controls the vast majority of the UAE’s economic and resource wealth. The

two largest emirates – Abu Dhabi and Dubai – provide over 80% of the UAE’s income.

In June 1996, the UAE’s Federal National Council approved a permanent constitution for

the country. This replaced a provisional document which had been renewed every five

years since the country’s creation in 1971. The establishment of Abu Dhabi as the UAE’s

permanent capital was one of the new framework’s main provisions.

Economic Overview-

Currency: - Dirham (AED)

Gross Domestic Product: - $85.8 billion

GDP Growth Rate: - 4.2%

Major Trading Partners: - Japan, UK, USA, Singapore, Germany, South Korea, Iran,

India.

Merchandise Exports: - $50.2 billion

Merchandise Imports: - $39.7 billion

Major Export Products; - Crude oil, Natural gas, Re-exports, aluminum, dried fish, Dates.

Major Import Products: - Manufactured goods, Machinery, and Transportation

equipment, Food products.

UAE Economic Review-

The UAE has one of the highest per capita income in the Arab world, due in part to the

fact that it claims the world’s third largest proven oil deposits. In the past several

decades, however, the UAE has introduced new industries, and by 2005 oil-based

industry accounted for only one-third of the UAE’s GDP. This diversification has helped

to cushion the impact of oil price volatility over the past several years and continued

stable investment policies generated real GDP growth through 2005 despite a drop in oil

revenues.

To encourage continued economic growth, the UAE is in the midst of a 20 years

economic diversification plan, and the govt. has allotted roughly $13 billion towards the

development of the non oil economy. Since 1992, the UAE has tightened intellectual

property laws as part of an effort to improve standards, although the current regulations

are not WTO compliant. Work is underway to rectify this of further note; the UAE

revised its commercial code to clearly layout bankruptcy rules.

The emirates are pursuing economic liberalization in various sectors including

hydrocarbons, petrochemicals, tourism, aviation and airports, power generation and

telecommunications. Free Trade Zones have been quite significant in contributing to

economic growth, with Dubai becoming a central hub for regional trade and finance,

accounting for about 70% of the emirates non-oil trade while Abu Dhabi has lead the

privatization drive.

PRODUCT PROFILE

COMMODITY NAME ITC (HS) CODE

1. MANGO PULP 08129002

2. MANGO PICKLES 20019003

3. MANGO CHUTNEYS 20019004

4. MANGO JUICE 20098001

5. MANGO SQUASH 20089901

6. MANGO SLICES IN BRINE 08129010

7. MANGOES SLICED DRIED 08045003

8. FLOUR OF MANGO 11063001

9. APPLES DRIED 08133000

10. ORANGE JUIC FROZN 20091100

11. ORANGE SQUASH 20089903

12. PINEAPPLE 20079903

13. PINE APPLES PREPARED OR PRESERVED 20082000

14. CHERRIES PROVSNLY PRSVD 08121000

15. GUAVA 20079902

16. LEMON SQUASH 20089912

17. STRAWBERRIES PREPARED OR PRESERVED 20088000

18. OTHER FRUIT SQUASH 20089919

EXPORT FIGURES

1. MANGO PULP

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacs 2,772.78

2. Total export of

commodity

29,701.07

3. %Share of country 9.34

4. Total export to country 1,610,342.88 2,355,285.25 3,301,512.00 3,803,884.75 5,444,497.50

5. %Growth 46.26 40.17 15.22 43.13

6. %Share of commodity 0.17

Mango pulp is the commodity which was exported in the 2002-03. In this year the

percentage share of the commodity was 0.17%. The value was 2,772.78 Rs. Lacs and the

total export of the mango pulp of India was 29,701.07 Rs. Lacs.

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

value in Rs.Lack (2007-

09)

Total exportof

commodity

% share ofcountry

% share ofcommodity

value in Rs. Lack

2. MANGO PICKLES

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacks 182.79

2. %Growth

3. Total export of

commodity

1,071.91

4. %Growth



7. %Growth 46.26 40.17 15.22 43.13


Mango pickles were exported in 2007-09. The above graph showing that the total export

of mango pickles from India was 1,071.97 Rs. Lacs in 2007-09 and the export value to

0

200

400

600

800

1000

1200

value inRs.Lacs

(2007-09)

Total exportof

commodity

%share ofcountry

%share ofcommodity

value in Rs.Lacs

UAE was 182.79 Rs. Lacs. 0.01% share of India including the mango pickles export to

UAE.

3. MANGO CHUTNEYS

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacks 7.91

2. %Growth

3. Total export of

commodity

2,398.68

4. %Growth



7. %Growth 46.26 40.17 15.22 43.13


Mango chutneys were exported to UAE in 2007-09 the above graph showing that the

total export of mango chutneys from India was 2,398.68 Rs. Lacs in 2007-09 and the

0

500

1000

1500

2000

2500

3000

value inRs.Lacs

(2007-09)

Total exportof

commodity

%share ofcountry

%share ofcommodity

value in Rs.Lacs

export value to UAE was 7.91 Rs. Lacs. 0.33% share of India including the mango

chutneys export to UAE.

4. MANGO JUICE

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacs 101.53

2. %Growth

3. Total export of

commodity

1,635.19

4. %Growth



7. %Growth 46.26 40.17 15.22 43.13


Mango juice was exported to UAE in 2007-09 the above graph showing that the total

export of mango juice from India was 1,635.19 Rs. Lacs in 2007-09 and the export value

to UAE was 101.53 Rs. Lacs. 0.01% share of India including the mango juice export to

UAE.

5. MANGO SQUASH

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010


2. %Growth

3. Total export of

commodity

105.20

4. %Growth



7. %Growth 46.26 40.17 15.22 43.13


0

200

400

600

800

1000

1200

1400

1600

1800

value inRs.Lacs(2007-09)

Total exportof

commodity

%share ofcountry

%share ofcommodity

value in Rs.Lacs

Mango squash was exported to UAE in 2007-09 the above graph showing that the total

export of mango squash from India was 105.2 Rs. Lacs in 2009-10 and the export value

to UAE was 11.03 Rs. Lacs.

6. MANGO SLICES IN BRINE

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacs 105.64 93.46 94.18 78.10

2. %Growth -11.53 0.77 -17.07

3. Total export of

commodity

2,370.79 2,410.73 1,113.56 2,064.46

4. %Growth 1.68 -53.81 85.39

5. %Share of country 4.46 3.88 8.46 3.78

0

20

40

60

80

100

120


Total exportof commodity

%share ofcountry

%share ofcommodity

value in Rs.Lacs


7. %Growth 46.26 40.17 15.22 43.13

8. %Share of commodity 0.00 0.00 0.00 0.00

Mango slices is the commodity which are continuously exported to the UAE because of

the higher demand. In 2006 the value of export was 105.64 Rs. Lacs. In 2007 the value of

export decreased and was 93.46 Rs. Lacs. In 2008 the value of export was 94.18 Rs. Lacs

and in 2009 the value of export was 78.10 Rs. Lacs.

7. MANGOES SLICED DRIED

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010


2. %Growth

3. Total export of

commodity

113.11

4. %Growth

-500

0

500

1000

1500

2000

2500

3000

2005-

2006-

2007-

2008-

2009-

Values in Rs. Lacs

%Growth

Total export of commodity

%share of country



7. %Growth 46.26 40.17 15.22 43.13


Mangos sliced dried was exported to UAE in 2007-09 the above graph showing that the

total export of mangos sliced dried from India was 113.11 Rs. Lacs in 2007-09 and the

export value to UAE was 10.07 Rs. Lacs.

8. FLOUR OF MANGO

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010


2. %Growth

3. Total export of

commodity

32.61

4. %Growth

0

20

40

60

80

100

120



%share ofcountry

%share ofcommodity

value in Rs.Lacs



7. %Growth 46.26 40.17 15.22 43.13


Flour of mango was exported to UAE in 2007-09 the above graph showing that the total

export of flour of mango from India was 32.61 Rs. Lacs in 2002-03 and the export value

to UAE was 2.08 Rs. Lacs.

9. APPLES DRIED

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010


2. %Growth

0

5

10

15

20

25

30

35



%share ofcountry

%share ofcommodity

value in Rs.Lacs

3. Total export of

commodity

0.83 2.44 9.51 79.89 12.77

4. %Growth 194.37 290.14 739.87 -84.01



7. %Growth 46.26 40.17 15.22 43.13


Dried apples was exported to UAE in 2005-06 the above graph showing that the total

export of dried apples from India was 0.83 Rs. Lacs in 2009-10 and the export value to

UAE was 0.23 Rs. Lacs. 0.0% share of India including the dried apples export to UAE.

The total export of dried apples from India in 2009-10 was 79.89 Rs. Lacs and in 2007-09

it was 12.77 Rs. Lacs.

10. ORANGE JUIC FROZN

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010


2009-2010

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Values in Rs. Lacs Total export ofcommodity

2009-2010

2. %Growth

3. Total export of

commodity

44.73 80.97 120.94 7.39 16.21

4. %Growth 81.02 49.38 -93.89 119.42



7. %Growth 46.26 40.17 15.22 43.13


2

Orange juice frozen was exported to UAE in 2004-05. The above graph showing that the

total export of orange juice frozen from India was 120.94 Rs. Lacs in 2009 and the export

value to UAE was 4.75 Rs. Lacs. The total export of orange juice frozen from India in

2007 was 7.39 Rs. Lacs and in 2009 it was 16.21 Rs. Lacs.

11. ORANGE SQUASH

-150

-100

-50

0

50

100

150

2004

2005

2006-

2007-2008 2009

Values in Rs. Lacs


%Growth

%share of country

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacs 20.35 1.16 2.61

2. %Growth -94.32 125.93 -100.00

3. Total export of

commodity

346.35 14.41 83.65 5.03

4. %Growth -95.84 480.48 -93.99

5. %Share of country 5.87 8.02 3.12


7. %Growth 46.26 40.17 15.22 43.13

8. %Share of commodity 0.00 0.00 0.00

Orange squash was exported to UAE in 2009-10. The above graph showing that the total

export of orange squash from India was 346.35 Rs. Lacs in 2009-07 and the export value

to UAE was 20.35 Rs. Lacs. The total export of orange squash from India in 2009 was

83.65 Rs. Lacs and exported value in UAE was 2.61 Rs. Lacs and in 2009-10 the total

export from India was 5.03 Rs. Lacs.

12. PINEAPPLE

-200

-100

0

100

200

300

400

2009-10 2009-2007 2007-2006 2006-2005

%share of country


%Growth

Values in Rs. Lacs

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010


2. %Growth

3. Total export of

commodity

52.35

4. %Growth



7. %Growth 46.26 40.17 15.22 43.13


Pineapple was exported to UAE in 2009-10 the above graph showing that the total export

of pineapple from India was 52.53 Rs. Lacs in 2009-10 and the export value to UAE was

7.51 Rs. Lacs.

13. PINEAPPLES PREPARED OR PRESERVED

0

10

20

30

40

50

60

value in Rs.Lacs(2009-10)

Total export ofcommodity

%share of country

value in Rs.Lacs

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacs 23.37 1.73 8.00

2. %Growth -92.60 362.84

3. Total export of

commodity

1.18 0.22 31.26 1.93 20.99

4. %Growth -81.26 14,085.35 -93.83 988.21

5. %Share of country 74.76 89.66 38.14


7. %Growth 46.26 40.17 15.22 43.13

8. %Share of commodity 0.00 0.00 0.00

Pineapple prepared or preserved was exported to UAE in 2009-10. The above graph

showing that the total export of pineapple prepared or preserved from India was 31.26 Rs.

Lacs in 2004-05 and the export value to UAE was 23.37 Rs. Lacs. The total export of

pineapple prepared or preserved from India in 2007-09 was 1.93 Rs. Lacs and exported

value in UAE was 1.73 Rs. Lacs. in 2006-07 the total export from India was 20.99 Rs.

Lacs.and the export value in UAE was 8.00 Rs. Lacs.

0

5

10

15

20

25

30

35

2004-

2005-

2006-

2007-

2009

2009-

2010

Values in Rs. Lacs


14. CHERRIES PROVSNLY PRSVD

S.No. \Year 2004-2005 2005-2006 2006-2007 2007-2009 2009-2010

1. Values in Rs. Lacs 3.77 30.56

2. %Growth -100.00

3. Total export of

commodity

15.07 51.19 30.56 1.43

4. %Growth 239.70 -95.33

5. %Share of country 25.02 100.00


7. %Growth 46.26 40.17 15.22 43.13

8. %Share of commodity 0.00 0.00

0 20 40 60

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007


Values in Rs. Lacs

Cherries preserved were exported to UAE in 2005-06. The above graph showing that the

total export of cherries preserved from India was 15.07 Rs. Lacs in 2002-03 and the

export value to UAE was 3.77 Rs. Lacs. In 2005-06 the total export of cherries preserved

was 30.56 Rs. Lacs and the export value to UAE was 30.56 Rs. Lacs.

15. GUAVA

S.No. \Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007


2. %Growth

3. Total export of

commodity

273.59

4. %Growth



7. %Growth 46.26 40.17 15.22 43.13


2002-2003

0

50

100

150

200

250

300

Values in Rs. Lacs Total export of commodity

2002-2003

Guava was exported to UAE in 2002-03 .the above graph showing that the total export of

guava from India was 273.59 Rs. Lacs in 2002-03 and the export value to UAE was 9.41

Rs. Lacs.

16. LEMON SQUASH

S.No. \Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

1. Values in Rs. Lacs 5.81 6.61 0.55 5.48

2. %Growth 13.85 -91.62 888.80

3. Total export of

commodity

65.50 40.09 7.04 59.57

4. %Growth -38.79 -82.45 746.78

5. %Share of country 8.87 16.50 7.88 9.20


7. %Growth 46.26 40.17 15.22 43.13

8. %Share of commodity 0.00 0.00 0.00 0.0

-500 0 500 1000

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007


%Grow th

Values in Rs. Lacs

Lemon squash was exported to UAE in 2006-07. The above graph showing that the total

export of lemon squash from India was 65.50 Rs. Lacs in 2003-04 and the export value to

UAE was 5.81 Rs. Lacs. The total export of lemon squash from India in 2004-05 was

40.09 Rs. Lacs and exported value in UAE was 6.61 Rs. Lacs. In 2005-06 the total export

from India was 7.04 Rs. Lacs.and the export value in UAE was 0.55 Rs. Lacs. In 2006-07

the India’s total export of lemon squash was 59.57 Rs. Lacs and the export value to UAE

was 5.48 Rs. Lacs.

17. STRAWBERRIES PREPARED OR PRESERVED

S.No. \Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007


2. %Growth

3. Total export of

commodity

0.12 0.80 2.46 13.26 37.41

4. %Growth 538.95 209.44 438.46 182.08



7. %Growth 46.26 40.17 15.22 43.13


0

100

200

300

400

500

600

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

Values in Rs. Lacs


%Grow th

%share of country

Strawberries prepared or preserved was exported to UAE in 2006-07 .the above graph

showing that the total export of strawberries prepared or preserved from India was 37.41

Rs. Lacs in 2006-07 and the export value to UAE was 6.68 Rs. Lacs. 0.0% share of India

including the strawberries prepared or preserved export to UAE.

18. OTHER FRUIT SQUASH

S.No. \Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

1. Values in Rs. Lacs 262.36 258.79 147.79 6.65 95.73

2. %Growth -1.36 -42.89 -95.50 1,339.70

3. Total export of

commodity

783.09 831.58 1,138.46 597.56 637.71

4. %Growth 6.19 36.90 -47.51 6.72

5. %Share of country 33.50 31.12 12.98 1.11 15.01


7. %Growth 46.26 40.17 15.22 43.13

8. %Share of commodity 0.02 0.01 0.00 0.00 0.00

-500 0 500 1000 1500

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007 %Share of country (1of 3)


%Grow th

Values in Rs. Lacs

Other fruit squash are the commodities which are continuously exported to the UAE

because of the higher demand. In 2002-03 the value of export was 783.09 Rs. Lacs and

the export value to UAE was 262.36 Rs. Lacs. In 2003-04 the value of export to UAE

decreased and was 258.79 Rs. Lacs. In 2004-05 the value of export to UAE was 147.79

Rs. Lacs and in 2005-06 the value of export to UAE was 6.65 Rs. Lacs. In 2006-07 the

total export of India was 637.71 Rs. Lacs and export value to UAE was 95.73 Rs. Lacs.

OVERALL EXPORT PERFORMANCE OF INDIA TO UAE IN THE

CASE OF PROCESSED FOOD ITEMS

Values in Rs. Lacs

S.No. Country 2008-2009 %Share 2007-2008 %Share %Growth

1. U ARAB EMTS 3,803,884.75 8.3342 5,444,497.50 9.5220 43.13

India's Total Export 45,641,788.00 57,177,928.00 25.28

0.00

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

70,000,000.00

U ARAB EMTS

India's Total Export

2005-2006

3,803,884.75, 8%

45,641,788, 92%

U ARAB EMTS


2006-2007

5,444,497.50, 9%

57,177,928.00, 91%

U ARAB EMTS


The above graph and pie chart showing that the total export of processed food items from

India in 2005-06 was 45,641,788.00 Rs. Lacs and the export value to the UAE was

3,803,884.75 Rs. Lacs.the percentage share of India’s export to UAE was 8.3342%.in

2006-07 the total export was 57,177,928.00 Rs. Lacs and the export value to the UAE

was 5,444,497.50 Rs. Lacs. The percentage share of India’s export to UAE was 9.5220.

GOVERNMENT SUPPORT

1. APEDA

APEDA stand for the Agriculture and Processed food products Export Development

Authority. APEDA is an autonomous organization attached to the Ministry of Commerce

of the government of India. The main function of APEDA is to build links between

Indian producers and the global markets. APEDA undertakes the briefing of potential

sources on government policy and procedures along with providing referred services and

suggesting suitable partners for joint ventures besides arranging buyer seller meets.

THE SIX ELEMENTS OF SUCCES

The universe is composed of five elements wind, water, earth, fire, and sky, since

APEDA draws. Its strength from these five elements, it has involved in to the sixth

element. If you use the sixth elements APEDA judiciously you magically find the

harmony you need for success.

DEVELOPMENT PROGRAMME OF APEDA

APEDA undertakes the following development programmes –

1. Development of data eases on products, markets and services.

2. Publicity and information dissemination.

3. Inviting official and business delegations from abroad.

4. Organizing the product promotions abroad and visits of official and trade delegation

abroad.

5. Participation in international trade fairs in India and abroad.

6. Organization of buyer seller meets and other business interactions.

7. Information dissemination through APEDA’S news letter, feedback series and library.

8. Distribution of annual APEDA awards.

9. Provides recommendatory, advisory and other support service to the trade and

industry.

10. Problem solving in government agencies and organizations, RBI, customs,

import/export procedures, problems with importers through Indian missions abroad.

APEDA offers financial assistance under various schemes, which seek to promote and

develop agro exports financial government agencies. Some of the activities which are

eligible for financial assistance are:-

- Strengthening of market intelligence and data base through studies and surveys.

- Quality up gradation.

- Research and development.

- Development of packing quality.

- Up gradation of meat processing facilities.

Objective to promote integrated development of horticulture in the country by:-

-coordinating.

-stimulating.

-sustaining.

: - production and processing of fruits and vegetables.

: - establishment of sound infrastructure and

: - focus on post-harvest management to reduce losses.

List of publication of APEDA

1. Indian export directory Agriculture and processed food products – 1997.

2. Export statistics of agro and processed food products for 1997-98.

3. Guidelines for the export of fresh fruits to EU market.

4. Quality assurance manual for export of grapes.

5. Quality assurance manual for export of management.

6. Quality assurance manual for export of leeches.

7. Quality assurance manual for export of kin now.

8. Quality assurance manual for export of mangoes (Tamil).

2. NATIONAL HORTI CULTURE BOARD (NHB)

National horticulture board (NHB) was set up by the government of India in 1984 as an

autonomous society under the Societies Registration Act 1860. The various scheme of

NHB are:-

1. Development of commercial horticulture through production and post-harvest

management.

(A) Name of the Scheme/Project-

a. Production related.

b. PHM/ processing related.

(B) Components-

- High quality commercial horticulture crops.

- Indigenous crops/produce, herbs.

- Aromatic and medicinal plants.

- Seeds and nursery.

- Biotechnology, tissue culture.

- Biopesticides.

- Organic foods.

- Primary processing of products.

- Est. Of horti. Health clinics/laboratory(for Agri/Horti unemployed graduates)

- Consultancy services.

- Bee – keeping.

- Grading/washing/sorting/drying packaging centers.

- Pre-cooling unit/cool stores.

- Refer van/containers special transport vehicle

- Ripening curing chamber.

- Hort ancillary industry e.g. tools, equipment, plastics, packaging etc.

(C) Pattern of Assistance-

Back – ended capital subsidy not exceeding 20% of the project cost with a

maximum limit of Rs.25 lakh per project for the North-Eastern/Tribal/Hilly

Areas, maximum limit of subsidy would be Rs. 30 lakh per project.

The subsidy to be released to the leading participating leading financial institution

on the completion of project as in the case of cold storage project approved by the

government.

For projects in the cooperative sector founded by the NCDC, the subsidy would

by through NCDC.

2. Benefits-

- Impetus to the farmers to grow more.

- Shelf life to the producers will increase.

- Losses shall be reduced.

- Consumer shall be able to relish the producer in a Farm-Fresh state.

3. Market Information Service for Horticulture crops -

- Generate information on whole sale prices, arrivals and trends in various markets

for horticulture producer.

- Dissemination of information through media and publications.

Pattern of Assistance-

To assist farmer, exporter, dealers, research organization.

4. Horticulture Promotion Service -

- Techno- economic feasibility studies to review the present status for horticulture

development in particular area/state.

- Identify constraints and suggest remedial measures.

- Develop short term and long term strategies.

- Provide consultancy service and export service.

Pattern of Assistance-

- Studies through professional consultants.

- 100% financial assistance.

3. AGRI-EXPORT ZONES

In a momentous move to push India’s exports aggressively, the government announced

several measures aimed at augmenting exports of farm goods.

Removal of Quantitative Restrictions (QRs) on exports save a few sensitive items, a

major thrust to agricultural exports, permission for setting up Overseas Banking Units

(OBUs) in Special Economic Zones (SEZ), retention of duty-neutralization instruments

including Duty Entitlement Pass Book (DEPB) and other export promotion schemes, an

incentive package for hardware sector and broadened market access initiative (MAI)

scheme constitute the kernel of the new five year Exim policy (2004-09).

The concept of agri export zones developed by APEDA aims to improve the levels of

food processing to reduce waste, increases marketability and help farmers to enjoy higher

value of realization. It takes a comprehensive look at a particular produce/product located

in a contiguous area for the purpose of developing and sourcing the raw materials, their

processing/packaging, leading to final exports.

Thus, the entire effort is centered on the cluster approach of identifying the potential

products, the geographical region in which these products are grown and adopting an

end-to-end approach of integrating the entire process right from the stage of production

till it reaches the market. It will also identify/enlist difficulties/problems encountered at

each stage. These difficulties could be procedural in nature or may relate to a particular

quality standard. A package needs to be developed to suggest solutions to these problems.

Measures envisaged promoting exports from such zone –

1. Financial Assistance :-

Both central as well as state government and their agencies are providing a variety

of financial assistance to various agri export related activities. These extend from

providing financial assistance for training and extension, R&D, Quality up

gradation, infrastructure and marketing etc. thus, whereas central government

agencies like APEDA, NHB, and Diptt. Of Food Processing Industries, Ministry

of Agriculture provide assistance, a number of state governments have also

extended to promote agri exports from the proposed zones in a coordinated

manner, some additional features like providing grants from market access

initiative fund could also be considered by the state government.

2. Fiscal Incentives :-

The benefits under Export Promotion Capital Scheme, which were hitherto

available only to direct exporters, have now been extended to service exporters in

the agri export zones. Thus, even service to ultimate exports will be eligible for

import of capital goods at a concessional duty for setting up of common facilities.

They shell fulfill their export obligation through receipt of foreign exchange from

ultimate exporters who shall make the payments from there EEFC account.

Exporters of value added agri products will be eligible for sourcing duty free fuel

for generation of power, provided the cost component of power in the ultimate

product is 10% or more and the input-output norms are fixed by the advance

licensing committee of the Directed General of Foreign Trade (DGFT). In the

view of the power intensive nature of most of the value addition almost all the

exporters of value added agriculture produce will become eligible for such

facility; similarly, input-output norms can also be fixed for sourcing other inputs,

like fertilizers, pesticides etc. duty free for cultivation purpose.

ANTICIPATED BENEFITS-

- Strengthening of backward linkages with a market oriented approach.

- Product acceptability and its competitiveness abroad as well as in the domestic

market.

- Value addition to basic agricultural produce.

- Bring down cost of production through economy of scale.

- Better price for agricultural produce.

- Improvement in product quality and packaging.

- Promote trade related research and development.

- Increase employment opportunities.

Guidelines for State Governments-

The proposal of the state govt. for developing an agri export zone would need to take into

account all activities necessary to set up projects in such a zone some basic guidelines for

developing such projects are detailed below-

- Identification of an agriculture produce (cash crops) which would be developed

for export through a cluster approach. This would, obviously, be based on

concentration of a given product or a set of products in a particular area which

would be promoted as an agri export zones.

- The zone could be a block/group of blocks or a district/group of districts.

- An agricultural university would need to be identified which will assist in the

R&D work related to development of the project. Such university should

preferably be in the vicinity of the zone.

- In case of horticulture based projects, an exporter should be identified who would

source produce from 100-200 orchards in a contiguous area. In case there are

move exporters/farmers interested in exporters, then a single pack house operator

or a processing unit to serve the exporters/farmers may be identified.

- Efforts should be made to ensure enough production crops to enable the unit to

run round the year

.

- The proposal should indicate the entire range of activities involved in the process,

list out interventions being provided by the state governments at different levels

and also suggest the facilitation that can be provided by the central government.

Interventions from the centre could be, inter-alias in area of feasibility studies,

setting up backward linkages, training and extension, pre and post harvest

activity, packaging, transportation, market promotion, etc.

Responsibilities of the State Governments-

To enable the agri export zone achieve the objectives of the to make the projects viable it

is necessary that the central and state governments work closely with each other, this

would imply certain pro-active steps to be taken by the states with regard to the

followings-

- Identifications of a state government institution/agency, which will be responsible

for implementation, and coordination of the entire activity.

- Single window problem solving desks should be created in the offices promoting

zonal approach to agriculture exports.

- Adequate availability of infrastructure, inputs, electricity, etc.

- Redeployment of extension officers in the exports zones who would iterate

regularly with APEDA and organizes training/activity on a regular basis with a

definite action programme.

STUDY ON WTO RELATED ISSUES

The Study on WTO related Issues had the following components:

(i) Global Challenges for Indian Food Processing Sector; and

(ii) (ii) Measures for Fair Protection and Promotion of Indian Food

Processing Sector.

The Study was undertaken on behalf of Ministry of Food Processing with the following

objectives.

• Identification of import sensitive agro products;

• Analysis of the modalities for tariff reduction and their implications for India;

• Analysis of the global trends in agricultural subsidies and their import trade

implications for India;

• Identification of export potential agro and processed food products;

• Analysis of the export competitiveness of the identified products;

• Analysis of the external constrains for export growth in terms of market access issues,

domestic and export subsidies on products of export interest to India;

• Analysis of the domestic constraints for export growth;

• Analysis of export promotion measures.

i) Global Challenges for Indian Food Processing Sector

The Indian agri export sector is poised for growth. The medium term projections of

global agricultural trade clearly highlight the trade opportunities particularly in Beef,

Vegetable Oils and Rice. Fruits & Vegetables (both fresh & processed) are also another

area where international trade offers significant export opportunities. Exploiting these

opportunities requires an integrated approach to production and trade as world markets

are becoming increasingly competitive along with a multitude of standards to be met. The

challenge for India is to retain the production cost advantages even while seeking to

upgrade the quality and marketing systems.

Changes in consumption patterns is leading to increased demand for “high value”

products such as vegetable oils & meat in developing countries and fresh fruits &

vegetables and organic products in developed countries. At the same time, food scares

and health concerns have challenged the confidence in food quality. As such, consumers

expect retailers to ensure food safety measures through their purchasing practices.

Therefore, competition among retailers increasingly involves food safety aspects.

Consumers are also demanding more transparency, traceability and assurance in the food

chain. Meeting these requirements is a significant challenge for entering global value

chains of food products.

The organization of commodity chains has also changed significantly. A few decades

ago, the dominance of large companies in world commodity economy was mostly in

terms of their marketing initiatives in international markets. Now, increasingly, these

companies are also influencing what is produced and how. Thus, at the international

level, there is a continuing concentration of trade and vertical integration of large firms.

At the level of commodity-exporting developing countries, trading networks (both for

domestic and export markets) are being appropriated by foreign firms. In the retail

markets of developed countries, the most important change has been the growth of

supermarkets, which has led to the near elimination of independent traders and increased

the importance of brand name.

Under these evolving production and marketing systems and considering the large

number of small farmers in agricultural production, the constraints that characterize

Indian exports fall in three broad areas: (i) access to information; (ii) access to finance;

and (iii) access to marketing and trade networks. This is under the assumption that

agricultural trade liberalization will progress subsequent to the ongoing negotiations.

India has also the potential to develop niche markets especially in fresh fruits &

vegetables. The approach could be either in developing producer-driven commodity

chains or buyer – driven chains. However, the challenge is that of the effective

governance of food chains. Especially in cases where the food retailers in developed

countries are sourcing from developing countries, it is important to close the gap between

producer capabilities and the requirements of the export markets. Secondly, considering

that food products have distinct marketing channels, it is important to monitor the

coordination between the producer and retailer, especially when the product quality is not

standardized.

The above approaches for revamping the food export systems, has clear implications for

Foreign Direct Investment (FDI) both in developing production systems and retailing. In

this regard, it is important to define the permissible role of FDI in developing these

networks. Although the various programmes/schemes for production enhancement,

infrastructure development and export promotion have highlighted the underlying issues,

the possible role of FDI in these areas has not been clearly defined.

The challenges for broadening the export base of Indian food products, thus, briefly, are:

(i) Developing national food standards and a strong certification system which is

harmonized with the internationally accepted CODEX or HACCP;

(ii) Negotiating for equivalence agreements with major trading partners;

(iii) providing appropriate support (regulatory and incentive systems) for the efficient

integration of production and marketing systems based on well defined government –

private sector partnership; and

(iv) Developing product – wise export promotion strategy through market studies,

support for upgrading existing export capabilities and developing effective governance

for monitoring and management of food value chains.

ii) Measures for Fair Protection and Promotion of Indian Food

Processing Sector

From the analysis of agri import trends, it is observed that besides the traditional

(general) imports, new items entered into India’s agri import basket due to trade

liberalization drive and the gradual phasing out of QRs. Considering the fact that higher

imports could have detrimental effects on the production base of the country and thereby

affect rural livelihood, the selection of import sensitive items was done on the basis of

average annual growth rates.

A closer examination of imports indicated that inspite of a lower flexibility in terms of

tariff protection; the threat of import growth is only for a few products. Import threat is

high for Food preparations, Edible oils, Spices, Fruits and vegetables. Further if QRs are

withdrawn, the import threat was particularly high for Spices, Oilseeds, Cereal

preparation and Edible Oils.

Further selection was done on the basis of comparison between bound rates and applied

rates. The identified import sensitive products were ranked on the basis of their livelihood

and food security dimensions including parameters like average import growth rate,

percentage share of area under cultivation under gross cropped area in major producing

state and percentage population dependent on the crop. Wheat, Soybean oil and Milk

Powder were identified as most sensitive imports followed by Fruits (chiefly Apples and

Grapes), Maize, Cheese, Vegetables and Orange juice.

The study reveals that AOA has opened a new horizon of opportunities for increased

access to imports from developed markets into India. The removal of QRs would further

endanger the livelihood systems of the poor farmers, as there is a possibility of further

import surge. The extent of domestic support to farming families is far below even the

WTO-prescribed ceiling. There are also no export subsidies in India. India has specific

duty only for a few items, and for items with NTBs, there are no specific duties. As a

result of this, Indian agriculture continues to need protection and support. Hence

immediate action to protect domestic industry lies in: (i) Adjustment of Tariffs within

bound levels; (ii) Special Agricultural Safeguard mechanism (SSM) and (iii) Non Tariff

Measures.

Further, creation of infrastructure, watershed development, increased availability of

subsidized inputs and greater thrust on research, extension and risk management is

required to compete with imports. Better integration across rural markets is necessary for

price signals from abroad to be fully effective in generating comparative advantages. A

danger posed by weak integration across rural markets is that the price depressing effects

of potential imports can be quicker and affect more regions and farmers.

Hence, India’s initial negotiating proposals should seek to protect the interest of Indian

agriculture especially on its concerns for food and livelihood security, demanding more

flexibility for protection from surge in imports and by conceding minimal market access.

These negotiating proposals with matching efforts of protection, support and market-

friendly domestic policy regime will take Indian farming to higher levels of growth and

prosperity.

SWOT ANALYSIS

S = STRENGTH

The strength of the project lies mainly in-

1. The abundance of exotic tropical fruits & vegetables available in India.

2. The matchless aroma and tests of Indian tropical fruits.

3. The diverse agro-climatic condition in the country, through which any raw

material can be effectively grown to meet the demand.

4. The availability of a very large pool of qualified and experienced technolocarts

and of the research and development laboratories dedicated to food processing

industry.

5. The experience in the export of dehydrated products.

6. The capability of design development and construction of process plant

machinery matching international standards.

W = WEAKNESS

The major weaknesses for India in the field of business are-

1. Poor availability of suitable processing variety of raw materials at present.

2. Lack of in-house quality control and testing facilities in conformity with the

international standards.

3. Existing technology obsolescence.

4. Poor infrastructure facilities such as irregular power supply, high inland

transportation cost and lack of cold chain facilities etc.

5. Lack of post harvest handling and long term storage facility.

6. The other major weakness in Indian food industry is the lack of coherence and

cooperation amongst the processors and exporters due to which the problems can

not be effectively addressed and tackled collectively.

O = OPPORTUNITIES

The opportunities available for these products as under reference are-

1. Based on exotic Indian raw materials the fruit salads, fruit bars, fruit based cereals

and baby foods are gaining in consumer preference.

2. The pre-prepared meal based on Indian vegetables for long Asian ethnic

population settled in developed countries is a very big opportunity for export of

these products.

3. For the region of emerging opportunity is the south-east Asia which is presently

being catered to, by USA and EU. India must benefit for its locational advantage

that offers economy in the cost of freight etc.

4. Dried tropical fruits going up in demand.

T = THREATS

The major threat to Indian dehydration industry is expected from the goods offered by the

neighboring countries such as china, Thailand, Indonesia and Philippines who have a

distinct price advantage accruing from the production cost which include the cost of

power, liquid fuels, rate of interest on loans for fixed and working capital, import duty

and export benefits, the cost advantage to these countries varies between 28 to 45%.

CONCLUSION

Simply achieving the status of largest producer in selected agro commodities is not

enough. To be a player in the global market we need to be competitive. Our products

have to stand competition in terms of cost and quality. In 2005-06 the total export of

processed food items from India was around 45,641,788.00 Rs. Lack of which processed

fruits and vegetables have a share 13,500,000 Rs. Lack The industry ranks fifth in terms

of production, consumption, export and expected growth in India.

The study of the various items into consideration during the project suggests that the

major export destination of processed food items from India are gulf countries or UAE.

The study of export trend of various items under study reveals a very good export

potential. the various items under study mango pulp, mango pickles, mango chutneys,

mango juice, mango squash, mango slice in brine, mangoes sliced dried, flour of mango,

apples dried, orange juice frozen, orange squash, pineapple, pineapples prepared or

preserved, cherries preserved, guava, lemon squash, strawberries prepared or preserved

and other fruit squash are the most important. They are continuously demanded in the

UAE market so they represent the potential for the Indian processed foods.

Processed guava, mango slice in brine, orange squash, pineapples prepared or preserved,

lemon squash, strawberries prepared or preserved, other fruit squash are the upcoming

item in the processed food items list and has a bright future in the U.A.E. market.

RECOMMENDATION

The following recommendations if implemented will boast the food processing industry

and its export:

► Focus should be given in building proper infrastructure in India like cold chain, cold

storage, power and roads.

►Supply chain should be improved to reduce wastage of food items during

transportation.

► Modern techniques of farming/processing should be implemented.

► Technology should be upgraded to cover a range of products.

► India should have integrated food laws.

► Non-tariff barriers and technical barriers to trade need to be reviewed.

► Application of fungicides/pesticides and chemical preservatives should be phased out.

They should be replaced by more environment friendly technologies to increase quality

of the crops and products.

► There should be extensive education and training for the crop growers on how to

increase yield per hectare of heir crops. Cooperative and contract farming can be a good

solution for small land holding for improving yield and quality of the crops.

BIBLIOGRAPHY

▪ MAGAZINE

► Indian Food Packer

► Modern Food Processing

► Pragati Path – House Journal of STC, Annual Number (April 10-March 10)

▪ INTERNET

► Website of Directed General of Foreign Trade

<http://dgftcom.nic.in>

► Website of National Horticulture Board of India

<http://www.nhb.gov.in>

► Website of Agriculture & Processed Food Export Development Authority

<http://www.apeda.com>

► Website of Ministry of Food Processing Industries

<www.mofpi.com>

► Website of Mother Dairy

<http://www.motherdiary.com>

FINAL-MRP

Documents

national horticulture

cold chain

integrated

mangos sliced

quality assurance

orange juice

gross domestic

major product