The UK's Department of International Trade (DIT) led a group of UK food and beverage manufacturers on a trade mission to India last week. The Department, which organised the trip in conjunction with the UK's Food and Drink Federation and banking group Santander, said the aim of the trip was to make connections with local distributors and retailers, explore the “market opportunities” and build “lasting relationships” in India.
The DIT delegation consisted of 13 companies, including Iceland Foods, Greene King and the English Cheesecake Company.
“The mission is designed to grow and develop the local market’s awareness of British whisky, gin, craft beer, meat, fish, gourmet food and drink, health food and dairy. The appetite for these products in the Indian market continues to expand,” DIT said.
The trip included participation in the India Food Forum and the British Food and Drink Symposium in Bengaluru as well as a meeting with India's Food and Drink Importers Association (FIFI) and a networking reception at the British Deputy High Commissioner’s residence.
Dipankar Chakraborty, senior sector manager for the DIT at the British High Commission, told FoodNavigator that the visit was met with “tremendous interest from Indian buyers and retailers”.
The scale of the opportunity
Data provided by Santander demonstrates the scale of the opportunity for international food makers in India. According to the company, the food and food services market in India is expected to grow from £305bn in 2016 to £500bn by 2020.
Andrew Williams, Santander Corporate and Commercial business development director, said that UK firms could play a “central role” in this growth.
Williams, who was part of the UK delegation, told FoodNavigator: “From a trade perspective, there are opportunities to export the equipment, knowledge and expertise required to build robust food processing infrastructure.
“From an investment perspective, for some food companies, there is also the interest in manufacturing locally to satisfy local demand at a local price point or satisfy regional demand.”
Iceland International, the global manufacturing business of UK retail chain Iceland Foods, is one such company considering setting up local production.
Alistair Cooke, head of sales and marketing at Iceland International, revealed that the company is considering setting up local production and could potentially launch its retail banner in India.
Commenting on the trade trip, Cooke said he experienced a “lot of interest” in Iceland's frozen food products and its new Luxury range. “In the frozen range, pizzas, desserts, ice cream, snacking and vegetable products were of particular interest. A number of retailers also expressed interest in our poultry and fish ranges,” he told FoodNavigator.
“Iceland plans to export a range of products into India from both the UK and, potentially, our manufacturing partners in Europe and Thailand. Iceland also plans to expand upon the product ranges already produced in India, which would not only service the domestic Indian market but also be exported from India to other countries around the world.
“If the Iceland brand proves as successful as we believe it will be, we may look to open stores in some of the key metros across the country.”
Exporting food and beverage products to India is typically associated with difficulties in customs, high duties and reams of red tape.
While Iceland is bullish on its prospects in the market, Cooke does see some significant obstacles.
“Red tape and customs are key barriers. Legislation and compliance are complicated in India and the high duty rates that many products attract will make it difficult to attain reasonable retail prices and therefore difficult to gain mass market appeal.
“For this reason, Iceland believes that in order to achieve any real economies of scale we need to produce as many products as possible within the market to negate the import duty rates and make the products competitively priced.”
While certain trade barriers remain an issue for UK exporters to India, Santander's Williams is optimistic that a liberalisation of trading relations between the nations will gain momentum.
“The last two years have seen a good deal of regulatory change and focus on ease of doing business. Things are getting easier and UK companies need to be operating with the latest set of facts,” he insisted.
In order to support this development, Santander has been working with local partners to facilitate market entry, YES BANK and Market Entry, as well as “building relationships” with the Food Safety and Standards Authority of India.
“The Indian government is much more proactive than it was a few years ago. We have good relationships in the UK and India with the Indian government to support organisations as they look to enter the market.”
The BIS trip comes as the UK government works to expand its trading relationship outside the European bloc. With an uncertain future facing UK food and beverage exporters after Brexit, exploring new market opportunities in emerging economies in particular could become an increasing priority.