Insights: Global Insights

India Rising: Opportunities and Challenges for U.S. Agriculture

India is undergoing a rapid transformation as one of the fastest growing economies in the world. This brings vast opportunities for U.S. agriculture as rising incomes and exposure to new products alter consumer attitudes.

India is undergoing a rapid transformation as one of the fastest growing economies in the world. This transformation brings considerable opportunities for U.S. agriculture as rising incomes and increased exposure to new products and trends alter consumer attitudes, particularly among the young. However, benefiting from the opportunities available in India requires patience, an investment of time and resources to understand the market, and knowledge to effectively navigate around India’s notorious red tape and bureaucracy.

India is a beautiful, chaotic, and often quite exhausting country to visit. Sat in a local brewpub in Bangalore, gazing out at a chaotic mass of people and traffic, it is easy to see why India can intimidate. But this same chaos is what makes India so special, and so appealing for business. A scale of change matched only by a scale of opportunity. As I wrap up ten busy days of business travel across India, I wanted to share a few thoughts on the potential for U.S. agriculture in this fascinating country.

Spend a few days in India and the opportunities for U.S. agriculture are clear. India is a country on the move, reflected in the endless traffic jams or packed city streets, but also in the growing affluence and increased global exposure of India’s youthful middle class. More than 50% of India’s population is below the age of 25 and more than 65% below the age of 35. This youthful demographic is driving change in India’s consumer preferences and seeking out new products and flavors to supplement the traditional Indian diet. In this changing consumer behavior, nutrition, convenience, and quality are key drivers of demand, particularly as India grapples with rising levels of obesity.

U.S. agriculture is well placed to benefit from these shifting consumer patterns. Walk around parts of New Delhi and Bangalore and the interest in Brand USA is obvious, from the popularity of U.S. quick service restaurants to the prime positioning of U.S. fruits and vegetables in retail. Indian consumers rightly associate U.S. agricultural products with quality, and with a certain cool factor. With the right consumer education and promotional activities, the interest and demand will grow.

However, while the opportunities are substantial, the challenges in the Indian market are numerous. Those interested in exporting agricultural products to India must navigate a complicated, often confusing, and occasionally conflicting array of tariff and non-tariff barriers.

For starters, India has some of the highest import tariff rates in the world, especially for agricultural products. These tariffs can exceed 100% for some agricultural goods. Although pathways do exist to reduce these tariffs, notably through India’s annual budget review process, these opportunities require skilled navigation, a depth of technical knowledge, local support, and persistence.

And then there’s the regulations. India’s bureaucracy and red tape are notorious, but in recent years, the volume of regulation impacting imported food products has increased considerably. Recent new regulations have included export facility registration requirements, major reforms of India’s nutritional labeling system for packaged foods, and challenging product certification requirements, among many more.

With increasingly stringent enforcement from India’s food and regulatory authorities, it is more important than ever that exporters considering the Indian market do so with the knowledge and resources to ensure compliance with India’s regulations.

Despite the array of considerations, none of India’s challenges are insurmountable. Indeed, over the past ten years, U.S. agricultural exports to India have essentially doubled. Evidence, if you need it, of the solid and growing demand in India for U.S. agricultural products.

India is a market that provokes strong opinion. And requires a strong stomach. But navigate the challenges and the opportunities for U.S. agriculture are considerable. Our team at Bryant Christie Inc. has over thirty years of experience opening, expanding, and retaining access for U.S. agricultural products to export markets around the world, including India. We welcome the opportunity to assist you.

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