India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

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7-10 TABLE 7.2 <strong>India</strong>: Food retail establishments <strong>and</strong> characteristics by outlet type Street markets <strong>and</strong> Type <strong>of</strong> outlet The central plazas/bazaars roadside st<strong>and</strong>s Small stores/kiranas Midsize grocery stores Hypermarkets Estimated number 1,000 10–12 million Over 6.5 million Unknown, but certainly a small number, as organized retail is estimated at 1 percent <strong>of</strong> the market. Estimated store size Groups <strong>of</strong> approximately 100 Varies greatly. Can range stalls. Average stall size is from a table to a large shop Less than 2,000 square ft 3,000-6,500 square ft 25,000-150,000 sq ft 5–10 ft by 10–15 ft. with multiple vendors. Type Unorganized Unorganized Mostly unorganized, but some organized chains Organized Organized Characteristics Typical refrigeration Types <strong>of</strong> goods sold Groups <strong>of</strong> stalls that together sell a large range <strong>of</strong> items, usually within a building complex. None A wide selection <strong>of</strong> goods, including local fruits <strong>and</strong> vegetables, pulses, snack foods (including chips <strong>and</strong> nuts), <strong>and</strong> spices. Some processed <strong>and</strong> consumer goods. Small amount <strong>of</strong> imported fruit. Generally, little to no ambiance. None Selection <strong>of</strong> goods can range from a h<strong>and</strong>ful <strong>of</strong> items at small stores to a wider range (20–30 different fresh items) at large stores. Imported fruit available. Limited information on other products available. Variety <strong>of</strong> range <strong>of</strong> products from limited amount to a wide range <strong>of</strong> products, although not necessarily a large number <strong>of</strong> each product. Generally, little to no ambiance, but good customer service. Some, mostly small beverage units. Produce selection averages 15–30 items. Also dry goods. Some have bakeries <strong>and</strong>/or meat counters. Mainly at organized outlets: domestic food br<strong>and</strong>s, including regional <strong>and</strong> specialty br<strong>and</strong>s <strong>and</strong> some imported foods. Imported fruit available. Some outlets carry dairy <strong>and</strong>/or frozen foods. Often clean <strong>and</strong> well lit. Self-service. Some refrigerated cases Produce selection averages 20–50 products, although some chains <strong>of</strong>fer significantly more selection. Domestic food br<strong>and</strong>s available, including regional <strong>and</strong> specialty br<strong>and</strong>s <strong>and</strong> some imported foods. Imported fruit available. Many have bakeries <strong>and</strong> dairy sections. Some have frozen food section. Quality varies, both for the store itself <strong>and</strong> for the presentation <strong>of</strong> all products. Some stores are dimly lit <strong>and</strong> poorly managed; some are well lt, clean, <strong>and</strong> well run. Self-service. Full range <strong>of</strong> refrigerated display cases Range <strong>of</strong> products, including produce, dry goods, beverages, <strong>and</strong> snack foods <strong>of</strong> both domestic <strong>and</strong> foreign origin. Some also have bakeries <strong>and</strong> meat sections. Also sell nonfood items. Sources: Florida Department <strong>of</strong> Agriculture <strong>and</strong> Consumer Services, <strong>India</strong>: Road to Success, 2007; Singh, <strong>India</strong>: Retail Food Sector; 2006; Commission staff interviews with industry <strong>of</strong>ficials, Mumbai <strong>and</strong> New Delhi, <strong>India</strong>, May 4 to June 5, 2009; Commission staff observation <strong>of</strong> various food retail outlets, Mumbai <strong>and</strong> New Delhi, <strong>India</strong>, May 30, 2009, <strong>and</strong> May 27, 2009. Note: There are no clear dividing lines between categories <strong>of</strong> unorganized retail, <strong>and</strong> even the number <strong>of</strong> outlets varies according to the different definitions.
As with the retail food sector, the restaurant sector has organized <strong>and</strong> unorganized segments. The unorganized restaurant sector includes snack shops, tea shops, roadside eateries, <strong>and</strong> other informal restaurants, on which there are insufficient data. 45 Organized restaurants <strong>and</strong> hotels in <strong>India</strong> are likely to buy imported food to satisfy their clientele; in fact, imported food <strong>and</strong> beverages are primarily consumed in the HRI sector. Imported foods are <strong>of</strong>ten served because the items in question are not available domestically or the domestic quality is not high. 46 One study found that hotels constitute an especially important potential market for imported foodstuffs because they are normally among the first users <strong>of</strong> imported products <strong>and</strong> <strong>of</strong>ten cater to an international clientele. 47 Attributes <strong>of</strong> an Efficient Marketing <strong>and</strong> Distribution System Characteristics <strong>of</strong> competitive markets that contribute to efficient marketing <strong>and</strong> distribution systems include (1) many sellers <strong>and</strong> many buyers, so that both are “price takers;” (2) the availability <strong>of</strong> timely <strong>and</strong> reliable information to all potential sellers <strong>and</strong> buyers; <strong>and</strong> (3) low transaction costs resulting from modern transportation networks, few middlemen, <strong>and</strong> no administrative restrictions on movement <strong>of</strong> products within the country. Inefficiencies in the <strong>India</strong>n agricultural marketing <strong>and</strong> distribution system, stemming from shortcomings in these characteristics, drive a price wedge between producers <strong>and</strong> consumers. Concentration One <strong>of</strong> the characteristics <strong>of</strong> a competitive, efficient market is a large number <strong>of</strong> buyers <strong>and</strong> sellers, none with enough market power to influence prices by themselves. <strong>India</strong>’s marketing system does not fit this pr<strong>of</strong>ile. There are a relatively small number <strong>of</strong> buyers <strong>and</strong> a large number <strong>of</strong> farmers in the m<strong>and</strong>i system. Although the m<strong>and</strong>i system was set up to counter the market power <strong>of</strong> corporations or other large purchasers <strong>and</strong> give farmers a better pr<strong>of</strong>it margin, traders now maintain significant market power. 48 For commodities other than rice <strong>and</strong> wheat, MSPs have little impact on market prices in major producing states, <strong>and</strong> the market power <strong>of</strong> buyers is unhindered. 49 Market Information Access to price <strong>and</strong> quality data is one <strong>of</strong> the cornerstones <strong>of</strong> an efficient competitive market, but the typical <strong>India</strong>n farmer has little up-to-date information on the price, quality, <strong>and</strong> volume <strong>of</strong> agricultural products in specific markets. The small size <strong>of</strong> most <strong>India</strong>n farms <strong>and</strong> the small volume marketed by these marginal farmers mean that the benefits <strong>of</strong> price discovery are slight for the individual farmer. A low literacy rate <strong>and</strong> 45 Bryant Christie Inc., “<strong>India</strong> Research Study for California Agricultural Exporters,” January 31, 2008, 13; Singh, <strong>India</strong>: HRI Food Service Sector, December 14, 2007, 2. 46 Singh, <strong>India</strong>: HRI Food Service Sector, December 14, 2007, 4. 47 Imported seafood, cheeses, <strong>and</strong> high-end cuts <strong>of</strong> lamb are reportedly highly dem<strong>and</strong>ed by hotels. USMEF, “<strong>India</strong>’s Pork Market,” March 2007, 18. 48 USIBC, written submission to the USITC, June 26, 2009. 49 Agmarknet Web site, http://www.agmarknet.nic.in. Numerous interviews with industry representatives in <strong>India</strong> confirm that, except for wheat <strong>and</strong> rice, government support programs for most major agricultural products have little impact on prevailing prices. 7-11
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United States International Trade C
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U.S. International Trade Commission
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Abstract This report describes <str
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TABLE ES.1 India:
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U.S. agricultural products face str
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U.S. Foreign Direct Investment U.S.
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CONTENTS Page Abstract ............
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CONTENTS―Continued Chapter 6 <str
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CONTENTS―Continued Figures 1.1. <
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ACRONYMS AND TERMS AAY Antodaya Ann
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ACRONYMS AND TERMS—Continued RGGV
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TABLE 1.1 India: A
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FIGURE 1.1 India:
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India’s central
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Despite their weak economic pr<stro
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Approach Current India</str
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Bibliography Birner, Regina, Surupt
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World Bank. Agriculture for Develop
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FIGURE 2.1 India:
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TABLE 2.1 India: A
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FIGURE 2.3 India:
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premium); (2) India</strong
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include government export restricti
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TABLE 2.3 India: A
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FIGURE 2.6 India:
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Exports by Major Trading Partner <s
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CHAPTER 3 Domestic Consumption Over
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TABLE 3.2 India: P
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more likely to have been exposed to
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BOX 3.3 Indian Con
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TABLE 3.3 India: T
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are expected to see income growth <
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Food Preferences India</str
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Regional Variation Geographic <stro
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CCC. “Know India
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CHAPTER 4 Indian A
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For most crops, however, In
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The Farm Sector soybeans 29 —but
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Food processing in India</s
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BOX 4.1 The Central Government’s
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BOX 4.2 Does the Minimum Support Pr
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August 3, 2009, New Delhi announced
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known as zamindars, have doubled or
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that the PFA Act was strictly enfor
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———. Bharat Nirman: A Time-Bo
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Organisation for Economic Co-operat
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CHAPTER 5 TARIFFS Overview
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sensitive. They include vegetable f
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wholly milled rice and</str
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The Indian governm
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Page 141 and 142: Bibliography American Apparel <stro
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The Honorable Sham L. Arano
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cprice-sewell on PRODPC61 with NOTI
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APPENDIX C HEARING WITNESSES
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ORGANIZATION AND WITNESS: Tuttle Ta
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Summary of Views <
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advertising and pr
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highest in the Asia-Pacific region.
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to U.S. exports to India</s
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transparent sanitary regulations th
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hotel and catering
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Western Pistachio Association 26 In
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APPENDIX E POTENTIAL FOR U.S. AGRIC
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E-4 TABLE E.1 India</strong
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APPENDIX F INDIAN AGRICULTURAL PROD
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TABLE F.1 India: A
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FIGURE F.1 India:
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is in nonirrigated areas with yield
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Consumption India
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efrigeration. This characteristic i
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70 percent of tota
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eportedly preferred in southern <st
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Cotton During MY 2003/04-2007/08, <
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Government of <str
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APPENDIX G UNION AND STATE/UNION TE
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certain agricultural goods in the p
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Bibliography Chaulan, Shri U.K. “
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Simulation Framework The effects <s
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Producers determine the optimal sup
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Applied ad valorem tariff equivalen
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We considered the possibility that
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Estimation of <str
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Bibliography Anderson, Kym, Mariann
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