India tightens regulatory standards for consumer, capital goods
The Bureau of Standards (BIS) is expected to double down on its enforcement of standards regulating consumer and capital goods. The BIS is tightening quality control norms across industries to end cheap imports and the dumping of inferior goods.
Some experts have suggested that the increased monitoring is an outcome of recent border tensions with China, and further speculate that stronger regulations could curb Chinese imports.
The government has issued new rules for India’s toys, electronic goods, machinery, food processing, construction, and chemicals sectors – all of which are dominated by Chinese goods, components, and imports. The rules will, however, be applied on all firms, domestic and foreign. Government departments and agencies will conduct laboratory tests and spot inspections to ensure goods satisfy regulatory standards.
Indian officials and retailers have variously mentioned substandard imports from China, complaining of goods even being semi-finished or damaged, such as in the toys sector, solar equipment, and in stainless steel products. At the same time, retailers are worried that ad hoc decisions by the government will choke their supplies, result in loss of advance payments to Chinese goods suppliers, and cause a loss of business, overall.
Ayurveda and natural consumer segments expand in value
Competition in the natural and Ayurveda segments in India’s consumer goods industry is heating up. Natural products now account for an estimated US$3 billion (Rs 185 billion) or 41 percent of India’s total personal care market. Ayurvedic health products alone are forecast to cross US$1 billion by 2021 in value.
While many foreign companies are familiar with natural consumer goods, Ayurveda is a system of ancient Indian medicine that is now integrated into general wellness applications, aside from being practiced as a type of alternative medicine.
Fast moving consumer goods (FMCG) companies leading India’s natural and Ayurvedic segments are: Patanjali, Hindustan Unilevel Ltd (HUL), Colgate-Palmolive, Emami, Himalaya, and Dabur.
Last year a consumer research survey highlighted that over half of Indian consumers looked for ‘natural’ or ‘organic’ ingredients when choosing their hair and skin products. A growing awareness of the harsh effects of chemical constituents showcase an increasingly health conscious Indian consumer.
India’s e-commerce firms see high sales this festive season
This festive season was the biggest shopping event for India’s online retailers in terms of units sold, profits generated, market share, and number of customers who shopped online.
India’s online marketplace generated approximately US$1.5 billion in the five-day festive sales, starting from September 19 – offering heavy discounts and promotional offers. This will continue till Diwali, end of October.
The country’s largest online retailers – Flipkart and Amazon, recorded a twofold increase in gross sales compared to this period last year. They also added 70 percent new consumers to the online marketplace, mostly from lower-tier cities. While Flipkart managed to grow its market share to 58 percent, Amazon increased it to 26 percent.
According to market analysts, the robust festive season has set the conditions right for India’s e-retailers to finish the year strongly in terms of overall growth.
Expansion of cargo location service to benefit logistics in India
After successful implementation along the Delhi Mumbai Industrial Corridor (DMIC), India will expand logistics visualization services using radio frequency identification tags (RFIT) to other industrial corridors, such as the Chennai-Bangalore route. This will allow logistics operators to perform real-time searches based on accurate positional information, for instance, showing the location of containers being transported by rail or road.
The move is in keeping with the pro-business reforms and infrastructure development heavily pushed by the Modi government. It will be facilitated through a 50-50 joint venture between the developer behind the DMIC – the Delhi Mumbai Industrial Corridor Development Corp. (DMICDC) – and Japanese information technology company NEC Corp.
India’s government owns a 49 percent stake in DMICDC, while Japan Bank for International Cooperation holds a 26 percent stake.
After Doklam stand-off, Modi and Xi shake hands
A military stand-off in Doklam – an area bordering India, Bhutan, Tibet, and China – came to a dramatic close last Monday as China and India opted for an “expeditious disengagement”.
The next day, Prime Minister Modi confirmed his participation at the BRICS Summit in Xiamen, China – a three day affair from September 3rd to 5th.
The ongoing summit began on a positive note with a much awaited handshake from Modi and President Xi Jinping.
Rural India key for Mondelez new investments
Consecutive bad monsoons and recent government policies – demonetization and the introduction of the goods and services tax (GST) – have resulted in declining sales overall for India’s fast-moving consumer goods industry.
Regardless, India’s economy is picking up the pace, and the overwhelming verdict by analysts point to faster growth rates registered in rural India than urban centers.
Engineering exporters, shipping companies in India suffer increased costs under GST
The Engineering Export Promotion Council of India (EEPC) has reported increased costs for shipping companies under the Goods and Services Tax (GST) regime due to changes to the refund schedule and roll back of tariff incentives.
Under the GST, drawback refunds will not be released till the end of September or October. Further, supplies of goods to export oriented units (EoU) from domestic tariff area are no longer considered as ‘deemed exports’; shippers will not be allowed to import inputs without payment of duty under Advance Authorization.