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

The <strong>India</strong>n milling sector is dominated by wheat, mainly milled for wheat flour <strong>and</strong> to a
lesser degree rice <strong>and</strong> pulses. Wheat milling is mainly done by the unorganized sector,
but a few large firms produce <strong>and</strong> market br<strong>and</strong>ed wheat flour. Bakery products are the
largest segment <strong>of</strong> grain-based processed foods, <strong>and</strong> this production is also performed by
mainly small <strong>and</strong> medium-sized unorganized local players <strong>and</strong> a limited number <strong>of</strong>
organized firms. Bread production was 2.7 mmt in 2004; 50–55 percent <strong>of</strong> it took place in
the organized sector. 10 Higher value-added processed grain products include Westernstyle
breakfast cereals, which is a small but growing segment.
Consumption
Grains, predominantly wheat <strong>and</strong> rice, are the largest component <strong>of</strong> the <strong>India</strong>n diet <strong>and</strong>
are consumed in many forms. Although wheat is most popular in the north, its
consumption is growing nationally partly because <strong>of</strong> migration but also because <strong>of</strong> its
wider availability, its versatility, <strong>and</strong> the public’s increasing awareness <strong>of</strong> its health
benefits. 11 Other, less commonly consumed grains include sorghum (jowar), pearl millet
(bajra), <strong>and</strong> maize (corn). Sorghum <strong>and</strong> millet are consumed in substantial quantities in
only approximately one-half <strong>of</strong> all states <strong>and</strong> have very low per capita consumption
(about 0.6 kilograms or less per month) in most <strong>of</strong> the remaining states. 12 Food
consumption <strong>of</strong> corn is also low in most states.
Pulses
Production
<strong>India</strong> is a leading global producer <strong>of</strong> pulses <strong>of</strong> many types, including desi (small)
chickpeas, pigeon peas, black matpe, <strong>and</strong> mung beans. Total pulse production was
14.8 mmt in MY 2007/08 with a planted area <strong>of</strong> 23.9 million ha; this represents a steady
decline in area <strong>and</strong> relatively stagnant production since the 1970s. There have been few
varietal improvements for domestic pulse production over the years, <strong>and</strong> only a small
share <strong>of</strong> production is under irrigation. 13 As a result, yields have not risen compared to
other crops, eroding pr<strong>of</strong>itability relative to crops such as wheat <strong>and</strong> rice. 14 Production
takes place mainly in Madhya Pradesh, Maharastra, <strong>and</strong> Uttar Pradesh (fig. F.1). Some
pulse-producing states provide indirect support for pulse production. For example, in
Tamil Nadu a 4 percent tax is levied on yellow/green peas <strong>and</strong> chickpeas that are shipped
across state lines. This tax is intended to limit the amount <strong>of</strong> pulses that are imported or
transported through the state. 15
10 IBEF, Food Processing: Market <strong>and</strong> Opportunities, 5.
11 Wheat has higher levels <strong>of</strong> calcium <strong>and</strong> protein relative to rice. Government <strong>of</strong> <strong>India</strong>, Ministry <strong>of</strong>
Agriculture Directorate <strong>of</strong> Marketing <strong>and</strong> Inspection, “Post Harvest Pr<strong>of</strong>ile <strong>of</strong> Wheat,” n.d.
12 Government <strong>of</strong> <strong>India</strong>, NSSO, Household Consumer Expenditure in <strong>India</strong>, 2006–07, October 2008,
app. A, table 7R.
13 <strong>India</strong>n industry representatives, interviews by Commission staff, New Delhi <strong>and</strong> Mumbai, <strong>India</strong>,
May 26 <strong>and</strong> 28, 2009.
14 USDA, ERS, <strong>India</strong>’s Pulse Sector, May 2003, 3.
15 Ibid., 5.
F-5