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

CHAPTER 3
Domestic Consumption
Overview
Consumption
The <strong>India</strong>n diet centers around staple foods such as grains, pulses, edible oils, <strong>and</strong>
potatoes. 1 Of these staples, grains account for almost two-thirds <strong>of</strong> caloric intake on a
daily basis, <strong>and</strong> per capita consumption <strong>of</strong> grains (mainly rice <strong>and</strong> wheat) has remained
fairly constant over the past six years. In recent years, total <strong>India</strong>n food consumption as
well as per capita consumption <strong>of</strong> many food products has increased, including nonstaple
food items, such as fruits, vegetables, dairy foods, <strong>and</strong> meat. Despite the rise in caloric
intake over time, <strong>India</strong>ns still consume fewer calories than people in many other
developing countries. 2
<strong>India</strong>n food consumption is influenced by factors such as population size <strong>and</strong>
demographics, income, price, cultural preferences, <strong>and</strong> availability. <strong>India</strong> has a large <strong>and</strong>
diverse population that historically has been poor <strong>and</strong> has spent a relatively large share <strong>of</strong>
its income on food. 3 The recent rise in <strong>India</strong>n incomes has resulted in an increase in the
size <strong>of</strong> <strong>India</strong>’s middle class, with increased disposable income available for spending on
food. Rising incomes typically lead to a diversification <strong>of</strong> diets from those high in food
grains to ones with increasing amounts <strong>of</strong> nongrain food items, <strong>and</strong> this trend is occurring
in <strong>India</strong>. 4
Looking beyond income <strong>and</strong> cultural practices, the availability <strong>of</strong> certain foods clearly
affects consumption patterns. 5 <strong>India</strong>n consumers have only limited access to imported
foods or to Western-type foods produced in <strong>India</strong>, 6 but as in other countries, when new
foods become available in <strong>India</strong>, certain market segments readily develop preferences for
them. Middle- <strong>and</strong> upper-class <strong>India</strong>ns, who mainly live in urban areas, are more likely to
buy imported foods or multinational br<strong>and</strong> foods produced domestically. Over time, the
growth <strong>of</strong> the <strong>India</strong>n middle class <strong>and</strong> urban dwellers with diversified food preferences
should not only increase overall consumption but also increase dem<strong>and</strong> for different types
<strong>of</strong> foods, including varied imports. 7
Food Consumption Patterns
Total <strong>India</strong>n consumption <strong>of</strong> food products has increased in recent years. Available data
for consumption <strong>of</strong> a number <strong>of</strong> foods, including grains, meat, dried fruit <strong>and</strong> nuts, dairy,
1 Comprehensive consumption data, including per capita consumption are not available for many food
products in <strong>India</strong>. The available, albeit limited, consumption data are presented later in this chapter.
2 FAO, Country Pr<strong>of</strong>iles: Brazil, China, <strong>and</strong> <strong>India</strong>, FAO Statistical Yearbook, 2005.
3 EIU, <strong>India</strong> Food, November 11, 2008.
4 Chatterjee, Rae, <strong>and</strong> Ray, “Food Consumption, Trade Reforms, <strong>and</strong> Trade Patterns in Contemporary
<strong>India</strong>,” n.d., 7.
5 Chapter 2 covers <strong>India</strong>’s imports <strong>and</strong> chapter 4 agricultural production.
6 The barriers to agricultural imports are discussed primarily in chapters 5 <strong>and</strong> 6.
7 Industry representatives, interviews by Commission staff, New Delhi <strong>and</strong> Mumbai, <strong>India</strong>, various dates.
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