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India - Selling and buying

Contents extracted from the comprehensive atlas of international trade by Export Entreprises

Reaching the consumers

Marketing opportunities

Consumer behavior: Some Indian consumers are aware of quality differences and insist on world-class products, many customers can sacrifice quality concerns for price reductions. The quality of after-sales service by the seller plays an important role when making a purchasing decision.

Indian consumers are buying trademarks they recognize. In this sense, it is necessary to invest in advertising and marketing to promote its product. Indians are now far more brand conscious, and this is generating demand for some products that were previously unfamiliar.
Consumer profile: The dynamism in country’s economy has resulted into an increase in purchasing power and an expansion of the middle class having higher disposable income levels. It is necessary to adapt its product to the portion of the population targeted: the middle class (about 350 million people) will be interested by products which can be found in Western countries, while the working classes is seeking above all commodities for very low prices.
Main advertising agencies:

Distribution network

Evolution of the sector: There has been a significant expansion in distribution channels in India. The total number of retail distribution outlets in the country is estimated at over 12 million (mostly family-owned businesses).

Most Indian manufacturers use the traditional three-tier selling and distribution structure: redistribution stockists, wholesalers and retailers. However, with the advent of shopping malls in the retail sector, manufacturers are now ready to supply directly to large retail outlets at discounted prices.

India still does not allow foreign direct investment in retailing, so foreign companies need to partner with local companies to enter the market. For more information on FDI & Retail sector, visit the site: Ministry of Commerce.

Types of outlet: Indian retail market size is estimated at USD 4.9 billion. It is predicted that it will grow to $7.1 billion by 2016 with an average growth rate of 7.5% annually. Currently, the volume of organized retailing is very small compared to the size of the market.
Organizations in the sectors:

Market access procedures

Economic Cooperation: uth Asian Association for Regional Cooperation (SAARC) and multilateral and bilateral trade agreements with many countries.
The country has signed a trade agreement with 21 other countries in the São Paulo Round of the Global System of Trade Preferences among Developing Countries (GSTP).
India signed in March 2011 a Tariff-Cutting Trade Treaty with Japan that will eliminate or reduce about 94% of tariffs on the countries’ bilateral trade over a ten-year period.
Non tariff barriers: - Import Licensing: Though India has eliminated its import licensing requirements for most consumer goods, certain products like motorcycles and vehicles still require import licenses.
- Anti-dumping and countervailing measures: Such measures are imposed from time-to-time to protect the domestic manufacturers from dumping.
- Export subsidies and domestic support: Several export subsidies and other domestic support is provided to several industries to make them competitive internationally.
- Procurement: The Indian government allows a price preference for local suppliers in government contracts and generally discriminates against foreign suppliers.
- Service barriers: There are still some restrictions for foreign companies to enter some service-oriented sectors like insurance, banking, securities, motion pictures, accounting, construction, architecture and engineering, retailing, legal services, express delivery services and telecommunication.
- Other barriers: Equity restrictions and other trade-related investment measures are in place to give an unfair advantage to domestic companies.

For the most current information on India’s Prohibited Import List, please see: www.exim.indiamart.com/freedlist/prohibited.html

Average Customs Duty (excluding agricultural products): The average customs duty is around 15%.

Though this is relatively high, but as per the WTO commitments India is going to slowly reduce it.

The Central Board of Excise & Customs- CBEC is the apex body for customs matters.

Customs classification: India uses the harmonized system.
Import procedures: In case of EDI (Electronic Data Interchange): No formal Bill of Entry is filed as it is generated in the computer system, but the importer is required to file a cargo declaration having prescribed particulars required for processing of the entry for customs clearance.
In case of non-EDI more documents are also generally required.
Green Channel facility : Some major importers have been given the green channel clearance facility. They have to make a declaration in the declaration form at the time of filing of Bill of Entry. The appraisement is done as per normal procedure except that there would be no physical examination of the goods.
For details, visit the website: Central Board of Excise & Customs- CBEC.

Organizing goods transport

Organizing goods transport to and from: About 95% of the country’s trade by volume and 70% by value are moved through maritime transport.
India's new international status as IT and manufacturing hub has led to the growth of international air traffic. India has one of the largest road networks in the world, the National Highways (NHs), with a total length of 66 590 km, serve as the arterial network of the country, connecting the State capitals, ports and big cities. In terms of railway, India plans to include 25,000 km of new lines, 12,000 km of double tracks and 30,000 km of multiple tracks. Additionally, 14,000 km of lines will be electrified.

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