Oil & Food Journal Jan'13

India’s Only Monthly for Processed Food, Agro Commodities, Edible Oil & Allied Segments Issue Date of Publication-25th of Every Month Date of Posting-28th of Every Month

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Dear Readers

From the Desk of Editor

The Indian food processing industry accounts for 32 per cent of India's total food market. Estimated to be worth US$ 121 billion, it is one of the largest industries in India, and is ranked fifth in terms of production, consumption and exports At a timewhen the food processing industry is expected to boost theagriculture sector, a study done by the Mahratta Chamber of CommerceIndustries and Agriculture (MCCIA) has found the modernisation scenario of this industry in Pune is still gloomy.

Pune is considered one of the most modern zone for food processing. If the condition is depressing in Pune, what can we expect from other parts of the country!

According to theEconomic Survey of Maharashtra 2011-12, out of the total 4,221Foreign Direct Investment (FDI) proposals approved by the Government of Maharashtra, 173proposals are from the food processing sector that is 4.1 per centof the total proposals.

Qualityupgradation, with zero wastage, particularly in the wake ofglobalisation is the need of the hour in the food processing industry. Unfortunately,only about nine per cent of the respondents have acquired newtechnology and taken steps towards modernisation, according to the AssociateDirector, Corporate Relations and Communications, MCCIA, ManjariDesai.

The survey by the Mahratta Chamber of Commerce Industries and Agriculture (MCCIA)that took into account 264 foods processing industries in Pune region reveals a shocking indifference of the Pune-based food processing industry to cold chain facilities, and an equally shocking fact that most respondents did not have any quality certification. The lead researcher of the survey was Mr Manjari Desai, associate director of MCCIA. The industries were divided into sectors like sweet products, milk, milk products, icecream, farsans and namkeens, bakery products, dry fruits, fruits and vegetables, flour, dal, spices, papad, chutney, pickles, mineral water and others.

Factors like procurements of raw materials, technology used, and quality control, financing and marketing were surveyed and inferences were drawn from answers of respondents, and data maintained by the MCCIA, Ministry of Industries and other bodies.

More than 50 per cent of the respondents declined to answer the question on usage of cold chain transportation for perishable commodities. Although this was understandable for sectors like dal, spices, papad and others, respondents from sectors like milk, milk products, icecream, fruits and vegetables where cold chain transportation is of utmost importance also refused to answer the query of the 50 per cent respondents who replied to this query, only 15 per cent had cold chain facilities.

Interestingly, 47.6 per cent of the respondents in the farsans and namkeen sectors replied in affirmative to existence and usage of cold chain in their units, while 26.3 per cent in the fruits and vegetables sector, and 20.8 per cent in milk, and milk products industry stated they had cold chains.

Most food processing units were unaware of the importance of cold chains for their segments.

The survey regrettably showed the food processing industry in sheer negativity as far as quality certification is concerned. ISO and Hazard Analysis Critical Point (HACCP) are major quality certifications in the food processing industry.

The sweet products industry in Pune region seems to be functioning without certification of any kind. In the milk, milk products, ice-cream segments, 68.5 per cent respondents did not have any certification. In the farsans and namkeen sector, 95.2 per cent respondents did not have any quality certification.

Other than the edible oil industry, where 100 per cent quality certification is more of a norm, no sector had any major certifications. Anant Sardeshmukh, director general of MCCIA, said that the food processing industry is in a nascent stage and proper infusion of technology and government aid would help it realise its full potential.

The irony of this case is that, though the industry keeps on crying foul for poor infrastructure it itself is not following the mandatory and important rules and regulation that is hyper essential for the development of this industry. Even after the financial assistance from the government for cold chains industry is cutting the cost by not implementing best practices.

We have been hearing and reading about the growth story of the Indian food processing industry which includes, ice-cream, bakery, poultry, meat, dairy etc., is not willing to serve best to its buyers.

The food industry has a duty towards its customer, my question is how long will they compromise on quality check, logistics and safety. The people of today have become highly conscious and alert and one negative apprise can damage the company's stand in the eyes of the people.

Oil & Food Journal Jan 2013

-Editor

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Contents Contents

15 Food processing centre for RINPAS female patients

News

15 Prices of domestic dry cocoa beans slide 18 ‘Demand for milk in India is fast outgrowing supply' 18 Banas Dairy breaks own record in milk procurement 37 Pulses catch corporate purses

Bunge India 16

Potato

EU Promotes To Replace Rice In Asia

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Baking The Recipes of Success And Accomplishment

By Digpal Singh- Vice President, Bunge India Pvt. Ltd,

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India

bananas seek bigger share of

Indian Ice-Cream Manufacturers Association

global Tasting The Cream of Success 48 44 market Food Grain Losses In India A State of Chaotic Affair

24 Enhancing Productivity in

Snack Food Industry with Energy Efficient

Heat Exchangers 14

Oil & Food Journal Jan 2013

PROTECT AND SERVE INNOVATIONS IN FOOD PATHOGEN DETECTION

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Foreign Direct Investment The Big Bang in

Indian Retail

News

Prices of domestic dry cocoa beans slide

P

rices of dry cocoa beans in domestic market has fallen by Rs. 50 a kg this season affecting growers. Prices of wet beans have dropped

by more than Rs. 10 a kg, according to market sources.Cocoa beans are mainly used by chocolate, food, and cosmetic industry. Cocoa is cultivated as an intercrop in areca plantations in the coastal and Malnad belt.Prices of dry beans in domestic market hovered between Rs. 173 and Rs. 180 a kg during the same time last year. Now, it fetched between Rs. 123 and Rs. 130 a kg. In the international market, the prices of dry beans varied between Rs. 150 and Rs. 155 a kg now like last year, according to M. Suresh Bhandary, Managing Director, Central Arecanut and Cocoa Marketing and Processing Cooperative Ltd. (Campco).Prices of wet beans which hovered between Rs. 42 and Rs. 45 a kg. during the same time last year has fallen to Rs. 28 and Rs. 33 a kg. now, he told. Citing reasons for the drop in prices, Mr. Bhandary said that as dry beans in domestic market cost more last year multinational chocolate manufacturers in the country began procuring dry beans from international

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Food processing centre for RINPAS female patients

A

food processing centre for female patients with a view to make them self-reliant was launched in early December at Ranchi

market, which costs less. It resulted in less demand and drop in prices for domestic dry beans since March, 2012.In addition, he said that while procuring the beans

from international market, the companies entered into a long-term procurement agreement with the specified government bodies of identified countries. The duration of the agreement extended even up to six months. Using a provision (relating to certificate of origin) under Indian Customs Act, 1962, the companies availed concession for paying customs duty in India. As per the terms of the agreement, the companies would have to import dry beans till the term of the agreement.Otherwise, they would invite the penalty. Hence even if prices of domestic beans now has fallen to Rs. 130 a kg. which was below the international price of Rs. 150 to Rs. 155 a kg., the companies have been forced to import the beans at higher rate.Mr. Bhandary said that prices for domestic dry beans were likely to jump again by Rs. 20 in a few months when the term of the agreement of the companies would expire. The domestic price was likely to match with the international price.

Institute of Neuro Psychiatry and A p p l i e d S c i e n c e s ( R I N PA S ) .

RINPAS director Amul Ranjan said, "We have launched this programme in early December so that female patients are able to earn a livelihood for themselves when they leave the institute. By this, the perception of the society will also change towards such patients. Earlier we had launched this programme at a small scale but this time we have planned it more professionally."

A few days ago, the female patients got training in food processing atBirsa Agricultural University. "We have lots of trees like mango, tamarind and litchi on our premises which can be utilized for making pickles and jams.

Earlier the inmates made three quintals of mango pickles which made us hopeful that they can also be given professional training. This time, they will learn packaging after which they will receive a training certificate. All this is part of the rehabilitation programme for the patients," said Ranjan.

On some future plans, the director said they were in talks with the government to coordinate in supplying the products made by the female patients. "We would like to negotiate with the government on the products being supplied initially at the Sadar hospital and the Rajendra Institute of Medical Sceinces. Later it can be supplied elsewhere with the help of the government," he said.

Potato Swaps Rice

Potato

EU Promotes To Replace Rice In Asia

T

he potato has a 12,000-year-old history but an even brighter future as a crop that is set to replace rice as a staple in the Asian riceconsuming countries. It requires less amount of water compared to other basic food products, without compromising the nutrition value. Potato, therefore, is increasingly being promoted, in the genetically modified organism-free European Union (EU), as the foremost solution for meeting the increased food demand for an estimated 6 billion world population by 2030.

Dutch researchers from the famous Wageningen University — dedicated to bio-based economy in food, feed and chemicals produced from renewable resources — told a visiting press delegation that if prepared in a healthy manner and consumed in the right proportion (balanced reduction of calories), consumers can benefit from the many nutrients and dietary fibres in the tuber.

The advantages of potato over other staples were discussed at the “Potato Potential Conference”, which was followed by a vibrant food exposition organised by the Enterprise Europe Network and Food Valley that facilitated networking of global companies in the potato business. The EU's focus is now on Eastern Europe and China for processed food markets. The visiting journalists were told that China is already moving towards experiments with replacing rice with potato.

The diverse advantage of potato — the fourth largest consumed food in the 16

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Potato Swaps Rice world after maize, rice and wheat — is emphasised by studies that have shown potato containing less calories than pasta, rice and bread. The tuber consumes about 30 per cent less water to grow than rice and is being projected as a crop that can contribute to weight loss “if prepared and consumed healthily.”

Researchers and scientists are working towards facilitating higher and sustainable crop yields per hectare that are free from disease and pests.

With an annual export of about eight million tonnes of certified seed potato, the tuber is not only a staple food for the Dutch, but a major contributor to the economy. Netherlands, known for its success in water management, is the world's third largest agriculture exporter, second biggest agri-food exporter and third largest potato exporter.

Quality standards The Dutch potato sector is constantly breeding, growing and selecting new varieties based on market demands.

Simultaneously, processing companies (like Aviko) continuously experiment with the quality and flavour of their potato fries and how to get the best byproducts from wastes like potato peels and starch-rich waste water.

The potato crop is normally hit by the most common late blight disease (caused by phytophthora infestans), scab, rhizoctonia, canker, blackleg, fusarium and viral diseases. All research at Wageningen is in partnership with private and multinational companies and, at the same time, with medical institutions so as to not lose sight of the nutritional and safety aspects in food products.

The EU has laid down stringent standards for member countries for seeds and seed potatoes to coordinate with the demand and supply. The visiting press team saw the high standards maintained by the Netherlands government at the NAK, the Dutch General Inspection Service for Agriculture Seeds and Seed Potatoes at Emmeloord. Technical Coordinator of Inspections Jaap Haak explained that every seed potato that comes out of a

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farm must have quality certification from the NAK. The Plant Protection Service of the Dutch Ministry of Agriculture, Nature and Food Quality, too, monitors the quality of seed potatoes, especially on phytosanitary issues of health, varietal purity and physiological conditions.

Interestingly, the NAK has on its board representatives of farmers, breeders, propagators and traders in a set-up in which the farm sector formulates its own standards in line with international measures. The costs are shared by farmers and traders.

Mr. Haak said that only produce from fields free of nematodes are accepted for inspection. Farmers must also specify the sources of the seed, its variety and class. Inspections are visual, in the labs as well as on-field. As the grower prepares the lots for delivery, NAK inspectors visit the plot at least once a day to ensure that only the approved lots are being delivered.

Nieck's Witte Under its Participatory Potato Breeding programme, the Wageningen University collaborates with farmers in producing required varieties. Niek Vos, an organic farmer-breeder, took 12 years to develop

the Bionca variety, by crossing small South Holland potatoes with blightresistant potatoes from Mexico. His is a white fleshy potato variety, resistant to late blight disease, and he sells it under his own brand name — Niek's Witte (Nieck's White).

“I turned to organic farming because when I was in conventional farming, my neighbours complained that the late blight afflicting their crop was coming from my field. I thought it was better to grow a variety that has no blight and now I have my own Niek's Witte,” he said.

He also has an on-farm cold storage of 100 tonnes capacity. He uses cow manure on his well-managed and clean farm and follows the good practice of keeping his 70-hectare field free after every two years to maintain soil health.

The organic potato is three to four times more expensive than the conventional one, but Mr. Vos believes this market is growing.

Mr. Vos has an India connection. After finishing studies, his daughter Michiel travelled to Puducherry “to think out” what she wanted to do in life. She decided to return to Netherlands and join her father in growing potatoes — such is the power of the tuber in Netherlands.

News ‘Demand for milk in India is fast outgrowing supply'

F

onterra Co-operative Group Ltd is a New Zealand-based multinational dairy co-operative

owned by almost 10,500 farmers of the scenic country. The company churns revenue exceeding NZ$19.87 billion.

Early next year, Fonterra is set to open its office in Delhi. It will be Fonterra's first operating office in the country with India-based staff. At the helm of all this is Hamish Gowans, the General Manager for Fonterra in India. In an interview with Shruti Srivastava, Gowan says Fonterra is here to better understand the Indian dairy market and add value to it. Excerpts: What made Fonterra choose India, and what is the strategy of the company here?

India is on track to become one of the largest dairy industries in the world.

With 20 million more mouths to feed every year, and an increasingly affluent population, the demand for high quality dairy nutrition continues to grow at a rapid pace. Annual dairy consumption, for example, is forecast to reach around 180-200 million tonnes by the end of the decade.

We understand there is huge potential for growth and we want to be on the ground

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understanding how we can help meet some of this demand and bring Fonterra's high quality dairy nutrition to the local population. In 2013, we will be primarily focused on learning as much as we can about the industry and meeting as many local companies as possible, to understand where we can add further value to this industry.

Although New Zealand only produces 2 per cent of the world's milk and India is one of the largest producers and consumers of dairy in the world, we do have a lot of similarities. Both of our dairy industries are important to the national economy and built on generations of family dairy farming. We see a great opportunity to build on common values and develop long-term strategic partnerships.

When does the company plan to launch its products in the country?

We currently sell ingredients and dairy products to key customers in India, which complement local supply and bring nutritious, high quality dairy solutions to consumers. Some of these customers are also using our dairy ingredients to export finished dairy products around the region.

We are still exploring opportunities for our other dairy products such as out-ofhome dairy solution, specialty dairy ingredients and consumer brands.

Given the policy changes in the retail sector, what is the company's view on the dairy sector in India?

In our view, there is no question that India will become one of the largest dairy markets in the world by 2020.

Demand is expected to grow by about 10 per cent until 2020, while local milk production is only expected to grow by around 2 per cent. The biggest challenge for the Indian dairy industry is to increase milk production to meet this demand gap. That's why Fonterra is exploring opportunities for its business in India. We want to see how we can help the local industry meet this demand growth.

Banas Dairy breaks own record in milk procurement

B

anaskantha District Milk Producers' Co-operative Union Ltd (BDCMPUL), popularly known as Banas Dairy, has outscored

other state dairies by producing a record 35.5 lakh litres of milk in a single day.

In January last year, the dairy had procured 30.07 lakh litres in a single day, said Parthi Bhatol,Banas Dairy chairman.

The dairy collects milk from 3.14 lakh producers through 1,400 milk collecting societies of the district .

Talking to TOI, in-charge managing director of the dairy Sanjay Karmchandani said, "We had been observing the milk procurement since many days and found that the production had gone to a record level of 35.50 lakh litre in a single day. This is likely to increase in this week.�

Banas Dairy is also planning to increase the procurement capacity by 50 lakh litres a day.

"We have recently commissioned two processing lines with a capacity of 50,000 litres of milk processing per hour.

The dairy has also started a huge cattle feed manufacturing unit with a capacity of 1,000 metric tones of dust-free feed a d a y, " K a r m c h a n d a n i s a i d .

With regards to quality and durability he said, "Nearly 81 percent of milk is being received in bulk system though tankers while just 19 percent is received through lose cans so the possibility of milk being spoiled or turning sour is negligible."

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Banana For Global MKT

India

bananas seek bigger share of

global market I

ndia, the largest banana producing country in the world, is vying for a bigger share of the global market.

An ambitious plan has been drawn up by the Confederation of Indian Industries (CII) to export Indian-grown bananas globally to China, East Asia, the Middle East and Europe.

It is estimated that the annual trade could be worth $1.2bn (ÂŁ750m).

The plan is to create a global brand for Tamil Nadu Bananas, along the lines of Florida Oranges and California Apples.

But as local production is unable to even meet domestic demand, questions are being raised about the prospects of the entire project.

Post-harvest losses The CII is confident that, with a gestation period of 18 months, its plan would succeed.

"If the post-harvest losses alone can be avoided then exporting 28 million tonnes of bananas would not be a problem," according to B Thiagarajan, chairman of the National Cold Chain Task Force at the CII. Although India is one of the largest producers of many fruits and vegetables, post-harvest facilities are still in their infancy, especially as there is no cold chain infrastructure - with the exception of a few commodities such as potatoes, Mr Thiagarajan explains.

The annual post-harvest loss in perishable fruits and vegetables is estimated to be around 80,000 crores of Indian rupees ($16.8bn; ÂŁ10.4bn).

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Banana For Global MKT Lack of trust Even though the CII is confident, farmers in the southern Indian state of Tamil Nadu, the largest banana growing area in the country, are very sceptical about the entire plan and its chances of succeeding.

They fear that the scheme would fail to benefit the growers.

"We have a bitter experience in the case of exporting mango pulp to many countries and the CII never came to our rescue during that crisis," says Rama Gounder, secretary of the Tamil Nadu Agriculturalists Association.

"Due to the volatile political climate in the Middle east and the recession in the European and the US markets, tens of thousands of mango farmers suffered heavy losses over the last two years, but no support came our way."

The CII's Mr Thiagarajan agrees that farmers in India have little faith in the corporate sector.

"There is a trust deficit, which we are trying to overcome," he says.

Farmers insist that although they have improved productivity over the years, their socio-economic conditions remain the same.

"Indian farmers grow more, but farmers themselves have not grown" says Mr Gounder.

Improved productivity The CII says the formulation of a cold chain infrastructure will go a long way in avoiding post-harvest loss, which alone could make banana exports a profit-

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making business.

Research done by the CII and the National Banana Research Centre (NBRC) in Tiruchirappalli has shown that the post-harvest banana loss is around 30% in Tamil Nadu.

MM Mustaffa, of the NBRC, told the BBC that efforts are ongoing to reduce this loss to 10%, thereby saving wastage and also helping farmers make a profit.

The initial plan of the CII, along with the NBRC, is to strengthen the post-harvest facility and to export fruit that in the past would have been thrown away.

"Delivering properly ripened high quality bananas will provide a high price realisation" Dr Mustaffa says.

But farmers are not convinced about the plan and say they should be involved in the hammering out of the cold chain infrastructure National Action Plan.

The CII acknowledges that its ability to engage with the farmers has been low so far and aims to improve it significantly.

Economic analysts say that unless a strong bond between farmers and buyers is forged, the entire plan could collapse.

But Mr Thiagarajan and his team are optimistic.

"Farmers in many part of Tamil Nadu have already started producing superior quality bananas, thanks to the research work done by the NBRC," he says.

"Also, many Tamil Nadu farmers visited Israel and learnt better production and harvesting methods.

"We produce good bananas, but we are not ripening them properly, that is the problem this project will address.

"Farmers are now being educated to hasten the process of ripening the fruit by inducing ethylene gas in a controlled way so that ripening is even.�

Global competition India's anticipated 8% growth in gross domestic product will not happen unless, and until, the agriculture sector is able to grow between 3-4 %, according to the CII. Its studies show that without modernisation, the agriculture sector cannot achieve such growth.

India is a low cost agriculture producer and if the quality of ripening alone is improved, then the farmers can get higher value for the same produce, according to the NBRC. Per hectare production of bananas in India is very low compared to many countries, encouraging a rapid change to farming technology.

Industry leaders say that competition from the Caribbean and South American producers can be effectively challenged.

The NBRC points out that the Cavendish brand of banana is produced in these countries and exported to the European market.

But with more than 30 varieties of banana being produced in Tamil Nadu, it notes that the global market will be offered more variety at a very competitive cost.

Whether or not this ambitious plan will succeed, is the big billion-dollar question.

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Heat Exchangers

Enhancing Productivity in

Snack Food

Industry with Energy Efficient

Heat Exchangers

H

eat exchangers play a vital role in today's competitive snack food industry in maintaining the quality of snacks and thereby enhancing productivity. The article talks on various applications of heat exchanger and how HRS Ecoflux* corrugated tube heat exchanger is the ideal choice of the industry.

Need for Heat Exchangers The snack food industry in India is 24

Oil & Food Journal Jan 2013

growing at a phenomenal rate. Snack food products in demand range from Potato Chips, Bhujia, Kurkure, Flavored Shev, Moong Dal, etc In a highly competitive market, there is considerable pressure on convenience food producers to provide excellent products at the lowest possible price.

Improving Productivity The quality, flavour and freshness of these products mainly depend on the oil

Heat Exchangers used for frying and the accurate temperature at which the oil is maintained. Oils used for frying purpose are Rice Bran, Palm Oil, Soya Oil, etc Oil that is excessively heated or not sufficiently cooled before storage will degrade, leading to chemical changes. A heat exchanger plays an important role in such critical application to heat the oil at high temperature and also maintain it.

Non uniform heating of oil can eventually adversely affect the appearance, flavor and odour of the fried foods. Overheated oils can also emit smoke and other harmful substances into the production environment and damage the quality of the product.

hygienic to use. Other media like natural gas and therminol require high operating

the time of frying to ensure the product quality

cost and do not conform to food norms.

- At start-up condition, a heat exchanger is used to raise the frying oil temperature from atmospheric (32째C) to around 180째C -190째C by heating media like therminol or steam

Applications of Heat Exchanger in Snack Food Industry 1. To maintain the temperature of oil at

Maintenance of Hygiene Utility or heating media most commonly used by snack food manufacturers in India is natural gas or therminol, which do not conform to food grade norms. As per recent Food authority norms, utility media has to be as per food safety norms to avoid any contamination of end product, ideally making steam used by heat exchanger the ideal media for heating.

Fuel Economy Steam used by heat exchanger is the most economic utility media as it has low operating cost and also safe and - Once the fryer sump achieves the desired frying temperature, HE is used to maintain that temperature.

2. To cool oil post frying and before storage because storing oil at high temperature may detorate the properties.

At shut down condition, the oil needs to be cooled before storage and a Heat exchanger is used for cooling of oil 25

Oil & Food Journal Jan 2013

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Heat Exchangers

with cooling water.

3. To heat the water which is further used to wash the chips before frying to remove starch.

Blanching is the process to remove the starch by hot water wash.

A heat exchanger is typically used to heat water HRS Ecoflux* Corrugated Tube Heat Exchanger HRS is the pioneer in introducing the revolutionary corrugated tube technology to the process industry.

product channeling. Thermal efficiency is so improved, that for typical thin film applications heat transfer area can be reduced to less than half of that required in a plain tubular heat exchanger.

Ecoflux* Corrugated Tube Heat Exchangers are compact in size, very low maintenance costs, minimal fouling, lower heat transfer areas.

Benefits of HRS Ecoflux* CTHE in Snack Food Industry *Ensures higher working temperatures and pressures conditions ideal for edible

*No spares requirement. Gaskets can be procured and changed locally Case Study Application 1: Veg Oil Heating for frying purpose Details: *Veg oil in the fryer has to be maintained at a particular temperature for frying of chips to maintain the quality of Chips. *Maintaining the temperature is by either direct heating of oil (Conventional method) or by circulating this oil through Heat Exchanger and heat is

Advantages of Ecoflux* CTHE over Conventional Smooth Tube HE Description CTHE STHE Heat Transfer Coefficient Unif orm thermal Heating Oil Burning Size Response to CIP Cleaning Maintenance Cost

Ecoflux* Corrugated Tube Heat Exchangers are shell and tube heat exchangers which use corrugated tubes instead of plain tubes. The tubes are corrugated to induce turbulence in both flows (product & service) at lower velocities. This not only increases thermal efficiency but also eliminates

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High Yes No Compact compare to STHE High Low

oil and steam. *Enables uniform thermal heating of oil *Long running times due to turbulent flow substantially reducing fouling *High response to Cleaning-In-Place an essential requirement for this application *Easy manual cleaning if so required, due to standard tube diameter

Low compare to CTHE No Yes Bulky Low compare to CTHE High

added by any heating media.

Heating Media: Therminol HE Case 1: *The heat exchanger used earlier was a c o n v e n t i o n a l P l a i n Tu b e H e a t exchanger. *As oil has low thermal conductivity and is viscous in nature, the heat transfer

Heat Exchangers

area requirement was high which results in very bulky size of heat exchanger. *As Vegetable oils are very sensitive in nature at high temperature, uniform thermal processing is needed in the heat exchanger, however with smooth tube heat exchanger, they were facing the problem of burning/ charring of oil at the tube wall due to non uniform temperature distribution in flow.

Heating Media: Steam instead of Natural Gas Fired Heater HE Case 2: *Existing heat exchanger was Natural Gas Fired Heat Exchanger where the controlling system was much complicated. *Operating cost was high and thermal losses were also high and non recoverable. *Maintaining temperature at constant point is difficult as any change in NG flow, pressure, Air quality was affecting the oil temperature.

Burning of oil was a common problem as flames and hot gases were directly heating the tube walls. *Maintenance cost was high as it requires experts for maintenance. *System was bulky in size.

On Installing HRS Ecoflux*CTHE 29

Oil & Food Journal Jan 2013

*In both cases a compact solution is received compared to the original heating system as the space required is almost half than occupied earlier. *By using CTHE, they have eliminated the possibility of burning of veg oil as flow pattern developed in the tube is eliminating steady layers in flow and due to mixing, uniform temperature distribution has resulted in low production losses and standard quality of the product.

Application II: Blanching System Water Heater Details: *Potato contains starch and removing this starch before frying is necessary. *Removing starch allows the chips for storing for long time as well as avoids the colored patches on chips due to burning of starch while frying. *It also makes chips porous and lighter. *Water pump temperature is maintained at 80-90째C to wash the chips before frying. *Water is circulated through heat exchanger for heating by Steam/ Therminol as heating media Old System: *HE was not able to maintain the hot sump temperature at desired point. *As removed starch is in the form of fine particles and has the tendency of fouling

on the inner wall of tube, they were facing the problem of chocking.

On Installing Ecoflux*CTHE: *Ecoflux* CTHE is more compact than the existing heat exchanger and performing well. *Due to corrugation technology, the fouling problem has been minimized hence reduced cleaning cycle. *Also, the process is further modified to have controlled flow of Therminol so that temperature can be maintained and there will not be any burning of starch due to thermal shocks.

Conclusion Ecoflux* CTHE being small and compact in size, occupies less space and also has low heat transfer area. The innovative corrugated tube technology minimizes fouling problems to a great extent which is a prime problem in this i n d u s t r y. U n i f o r m t h e r m a l Heating of oil enable to heat oil at right temperatures and maintain it thus retaining its essential properties and ensuring consistent quality of end product.

Nikhil Garad Sr Product Engineer HRS Process Systems Ltd www.hrsasia.co.in

Exclusive Interview

Bunge India Baking The Recipes of Success & Accomplishment

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asterline Bakery Service, part of Bunge India Pvt Ltd, which had acquired Dalda Vanaspati from Hindustan Lever, now holds 45 per cent of the fats and oils market. The company which is a numero Uno in the category has 14 varieties of fats and oils which include vanaspati, margarine, bakery shortening, cake gel to name a few.

The company has a strong presence in Southern states, Delhi, Kolkata and parts of western India. Bunge is also planning to gear up to consolidate its position in the market and providing customised orders for their customers. They have agents, distributors and stockists across the country.

In an intense conversation, Digpal Singh- Vice President, Bunge India Pvt. Ltd, Ltd , Bengaluru, gave an illuminating in sight of Bunge in India to our, our, Firoz H Naqvi on how they operate a global network of facilities, as well the work and effort put in to build their highly efficient bakery services. He also stated that Integration is a very important part of his company's food products business. By sourcing oilseeds and grains from our agribusiness unit, and by utilizing the same logistics systems, we improve efficiency.

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Exclusive Interview How do you view the present status of Bunge India especially in the Oils and fats segment, where your company has done wonders in the last five years?

Bunge is into special fats and margarines segment which is much-sought after by bakers in today's time. Bunge business is totally focused on specialised fats and margarines. This Company today is recognised for its quality and the type of service it provides to its clients and customers. Our services include the part where we tell our customers why our products are worth its quality.

We have expanded our business with humility and now we are at a point where we can impart the bakers about the functionality of our fats, oils, margarines or shortenings.

Bunge has devoted all its time and labour to enhance product quality and making the bakers to understand this produce.

Our concern the Masterline Bakery Service, a division of Bunge India is the pioneer of quality Specialty Fats and Margarines in the Indian Bakery Industry. At Masterline, we believe in solutions and innovations for and partnering with our customer – the Bakery Industry. Part of Masterline is the Bunge Foods division wherein we have customized solutions in the specialty oils s e c t o r s u c h a s C o n f e c t i o n a r y, Chocolates, Pharmaceuticals, Cosmetics and Dairy Fat Replacements.

Bunge India today is betting on the changing demographic and enhanced awareness in the people and depending on this we are looking forward to the encash on theconsumers need to have and prefer quality products.

What are your marketing strategies for promoting bulk selling?

Bunge is known for its product quality. In the bakery industry we made our presences felt over a period. After doing a survey and looking over the consumption pattern and usage of the products in the bakery industry, we found that most of the peoplein the bakery business actually did not know what kind of ingredients and product where good for their baking purpose or even how to use them.

This made us understand that there was a big scope for us in this very industry to

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improve the quality of cakes and other bakery item by providing the best quality product as well as with a special service to the clients as how and when to use the products.

Sometimes ago, the biscuits in the bakery usually had a shelf life ranging from 3 - 5 days.Bunge India at this point came in to provide the ultimate solution – we provided our high quality products to the bakeries that enhanced the shelf life to as long as one month and also gave the biscuits an enriched delectable taste with pronounced crunchiness.

Cake is all about volume – it has to be soft, spongy and the crumb structure has to be smooth and uniformwith melting effect in the mouth. So if one is able to present a cake that has all these quality plus an added value of increased shelf life, there is no doubt that such eminence product would be easily sold at the given premium price and the bakers will definitely form a clienteles because of the quality of the product provided. So In yield the baker are any time ready shell out enough money not only to buy our fine quality products but also to gain knowledge about the product we provide and how to use it.

Eventually, our products are mandatory to ensure the structure of the cake, make biscuits crispier and tastier. It also creates specialised shortening and oil products for commercial bakeries and operates a bakery product development and customer training centre. The special fats and margarines also bind all ingredients well. It also spreads easily between the dough. Further these products also are easy to use, improve volume and softens the bread.

In fact, we have revolutionised the bakery scene which is a big boon to the bakers.

Do you think has the Indian customer has become quality conscious and is now more inclined towards branded and quality products?

In the last five years the trends have changed tremendously. With the disposable income going up in the middle class, health and quality has become their foremost requirement too.

Now even they can select the best brands at a given price. They can now choose between a small average bakery anda

large better-quality bakery, look into the product and purchase the best qualityfood.

The average bakery which is much larger in number than the grander bakery has definitely sensed the loss of its consumer due to the quality difference and this has instigated them to opt for higher quality bakery ingredients so as be in the competitive market. So I can say that our zeal for quality has pushed even the smallest of the baker to use good and quality product.

Now to the variety share; the consumers of today now look for varieties of bakery item offered to them by a bakery. Bunge India has a very strong recipe services through which we provide the information in how to increase the quantity of products that you sell in the shelf as well as how improve quality of them in the shelf. We also provide the bakers different recipes to enhance their shelf presentation so that the customer has many choices and hence buy different varieties that they want from one bakery itself.

The company also offers services to the bakery fraternity by organising training programmes for cake decorations, bakery items, fast food, and also guide them about machinery. The three-day programme held in Bangalore is attended from bakers across India. In addition, cake decoration contests are held at the national level.

So you see of the last few years a paradigm shift has taken place, where the increase in income has made an average middleclass selective, alert and quality conscious Bunge has one most amicable and informative sales service, could you outline how and in what way do you guys manage to cater each and every queries coming from different brands of the bakers/bakery and satisfy them a t t h e s a m e t i m e ?

Well bakers are professional in their own zone and to be in synch with them we have to speak their language. So to understand and cater them, Bunge India has trained all its sales person as a baker – our sales man can answer all questions related to a bakery. Indeed we have created a virtual baker from salesmen.

Exclusive Interview They are trained to understand the integrity of a baking product and how to make the product better using our product. Bunge's salesmen can go into a bakery, fold their sleeves and work on to make their bakery items.

This method has created a relationship between the bakers and our sale service providers, thus creating such an atmosphere that if our salesmen can't provide a solution then our demonstrators step in to help and sort out the problem.

The Important part in this is that the smallest need of a baker is gratified by us at any time, 365 days.If our customers require urgent services my guys provide them ASAP.Also if they need any information, like what where to buy good ovens, or to know about different recipes we provide them the answer as required.

So the fact is we fulfil even the meagre of the need of our bakers.

How you keep your team/employees updated?

To keep our employees updated we have a monthly meeting across all the eight regions where we are situated. A complete single day is devoted to these meetings – in which the first half is given to the sales, and happenings of the market and the next half is devoted to need of the market and customers, like what they have asked for or what products they need, also on updates required by the bakery or demands for products that are not available in their city. Our monthly meet has the most critical role in making us understand the whole bakery industry.

Likewise we have out test bakeries, where we have accomplished demonstrators that keep an eye over the need of the bakers. We also have lists of manufacturers of Bakery machineries and other related things, hence are also able to fulfil of our clients in this segment too. We are basically a wholesome solution to all the needs of the bakers and related customers.

As the food processing industry has witnessed a robust growth, which sector of this industry has Bunge India made its focal point of interest and investment?

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The food Industry is most definitely growing in a big way. Eating out has become a common thing for many households in India. The food sector has wayward gone ahead the bakery sector; like the entry of multinational food joint like McDonalds, pizza hut, KFC, Dominoes etc. and these joint have made a special place for them in the India and has become one of the basic reason to make people eat out.

Comparatively the bakery sector has been behind the very fast growing food sector, but now it has started to take up those opportunities. They have now entered the competition thereby indulging into providing vastvarieties of bakery and food item. Also they are converting into restaurant type of expansewhere one can sit down and eat or make takeaway. Another growth driver is the retail chains where bakery joints are a popular hangout arena. A typical trend is for variety of bakery snacks, top quality products and value for money. Trends are that they want quality, value for money and variety.

Takeaway definitely is the core part of a bakery business asa lot of people prefer having bakery biscuits at tea time, or while serving to a guest at home rather than the industrial biscuits. Though the industrial biscuit is also growing at the same pace but taking home freshly baked bakery biscuit is still a niche for many households.

Talking about our focus our first priority will be the bakery sector. We know it very well from the scratch, to every stage of production of the bakery products as well as at the industry level. We are very clear in this part and our expertise is such that we know how and when to create and customise a product that is requires by a bakery/industry. Secondly we are looking into how to reduce the transfats in our baking products; So Bunge has developed a range of reduced trans-fat and non-trans fat products made from soy, canola, corn and other oils to meet the changing needs of its customers. It also works with food manufacturers and restaurants to formulate oil blends tailored to meet their specific needs.

Bunge has a dedicated research and development center to focus on innovative product solutions, including a

proprietary process that reduces Trans fats in partially hydrogenated oil by more than 85 per cent. The company also manufactures oils using specialty seeds developed by Dow and DuPont to make canola and soybean for better cooking stability, longer shelf life and taste. These oils do not require partial hydrogenation and does not contain Trans fats.

Reduction of Triglycerides from its product is another agenda of our companywe are working upon. Another important thing weareoperating is how to minimise the presence of saturated fats too in term of total consumption per person. This step we consider is to be our lead and growth path.

There are many products available in the market where the quality part is usually ignored or side-lined; let's take for example the frozen dessert, I believe we can provide far more better, healthier cost effective fats for them than from the ones they are using. We have realised that the frozen dessert is a lucrative business opportunity on which now we have to focus diligently. We can impart a lot of knowledge to the frozen dessert persons on how to use healthier and better quality product and why it is benefitting to them.

Bunge India's third focal point is the chocolate. As the chocolate industry is growing we have used this opportunity to indulge in itand make them feel our presence with our high range of quality and improved ingredient. As you know we were not into Lauric fat or palm kernel oil portfolio before that is required to make chocolates, but we did decided to look into the need and demands of the chocolates production. As we checked the market it was found that most product used were not upto the mark compared to what we could provide. Hence we started producing chocolate fats also – the CBS and hydrogenated palm kernel oil. And with our strong distribution network I am sure we will be able to reach everyone as after the intense survey we did realise the market was in the need of a good a promising food ingredient and product.

These three areas I believe are the promising opportune for Bunge India and I personally believe that they will add on to as the most lucrative business venture for us.

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News Udyami meet: Food processing industry in Bihar under focus

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he food processing industry in Bihar came under focus at the Udyami panchayat, at which the entrepreneurs aired their problems and chief minister Nitish Kumar, who headed a team of ministers and top officials, promised to address them.

Promoters and representatives of rice and wheat flour mills, rural agri business centres, processing units of maize, fruits and vegetables, biscuit manufacturing and edible oil processing units attended the meeting.

The State Industrial Promotion Board (SIPB) has approved altogether 533 projects under food processing sector with the total projected cost of Rs 5942.74 crore. Of this, over Rs 762 crore has already been invested, said industry minister Renu Kumari Kushwaha after the meeting. She said it was pointed out at the meeting that no vegetable-based unit existed in the

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state.

The minister said some entrepreneurs had raised the issue of enhancing the subsidy for food processing units from Rs 5 crore to Rs 10 crore. The suggestion has been approved.

For the food parks, the maximum subsidy would be Rs 15 crore, the minister said. So far, she said, 149 units have been approved subsidy to the tune of Rs 352.71 crore, of which Rs 123.11 crore has been disbursed. These 149 units will provide jobs to 13,000 people.

As many as 53 units are already operational, including that of Britannia, Anmol, Parle G and Amrapali. Of the 149 approved units, 52 are for rice mills, 15 for wheat milling, 10 of maize processing, seven of milk processing and four of biscuit manufacturing.

There is also proposal for one food park.

The SIPB has also approved proposals for 28 new sugar mills at a projected

cost of Rs 6507.86 crore, extension of 10 existing sugar mills for Rs 956.64 crore, establishment of ethanol plants at three existing sugar mills at an outlay of Rs 151 crore, said principal secretary, industry, Navin Verma.

The CM also directed for regular monitoring of the single window system and said this should be made more effective. Nitish stressed on branding of Bihar products and reiterated his dream that there should be at least one dish of Bihar on the plate of each Indian.

It has been proposed that all proposals for new industrial units with an outlay of up to Rs 50 crore be approved by the department and only proposals of over Rs 50 crore be sent for the consideration of the CM. As per the existing policy, proposals worth Rs 1 crore are sent to the CM by the SIPB.

News

Milk crisis looming S

addled with huge stocks of skimmed milk powder, and a weak export demand, the dairy industry is struggling inIndia.

Dairy farmers are in crisis. High input prices and declining milk prices have pushed them to the wall. But the consumer prices remain firm, showing no signs of declining.

When NCP leader Praful Patel said in Parliament during the debate on FDI in retail how in Baramati in Maharashtra, agriculture minister Sharad Pawar had ensured that dairy farmers got a minimum prices of Rs 20 per litre for milk, I was amused. This is not a fair price, but a depressed price being paid to farmers. All cooperatives and private plants are paying around the same to mil producers.

Saddled with huge stocks of skimmed milk powder, and with a weak export demand, the dairy industry is trying to minimise its losses. It is therefore passing on the losses to primary producers. Now such a situation is not peculiar only to India. Let us therefore try to understand how the international community reacted to a dip in prices.

In 2009, about 20 per cent of 1,800 dairy farms in California, for instance, had shut down unable to survive at times of higher feed and transportation costs. Similarly, in 2009, when international milk prices had dipped to a low, the European Union defied the World Trade Organisation (WTO) and reintroduced milk subsidies. It provided Rs 3,600 crore in subsidies to its dairy farmers to offset the losses incurred.

While US/EU have always made efforts to rescue their dairy farmers, I have never understood the rationale of letting domestic dairy farmers shut down when farm prices fall for no fault of theirs. With private and cooperative dairy industry reducing the milk prices to Rs 20.50 a litre, it is certainly uneconomical to maintain a dairy herd. In Punjab, Gujarat, Maharashtra and Rajasthan, quite a large

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number of dairy farmers have opted out.

Let us see how Europe coped up with the crisis. In European Union, there are 10 lakh dairy farmers.Collectively, they produce more milk than what is produced in India or for that matter in America. As per WTO norms, EU was supposed to have phased out its burgeoning dairy subsidies.

But who cares when it comes to domestic interests. EU reinstated subsidies to support milk production as well as for export when it was hit by economic recession. By doing so it has been able to capture 32 per cent of the global market for dairy products by volume.

According to the Dairy Farmers of Canada (DFA), EU dairy farmers receive subsidies to the tune of Rs 3.96 lakh crore every year.

These massive subsidies insure dairy farmers against the volatility of the markets, and at the same time enable them to dump subsidised milk onto developing countries. Looking for an export market, EU is flexing its muscle and under the proposed EU-India Free Trade Agreement (FTA) it wants milk tariffs to be slashed by 90 per cent. EU is seeing India as a big market for its milk and milk products, and all indicators are that India will open up its domestic dairy market for EU imports.

Lesser number of farms In America, on the other hand, the number of dairy farms has come down by 61 per cent since 1992, and only 51,480 dairy farms now exist. These farms received subsidies worth Rs 27,500 crore since 2009, which in other words means a third of its milk price is subsidised. These subsidies come under several programmes: milk income loss contract payment; market loss assistance; milk income loss transitional payment; dairy economic loss assistance programme; milk marketing fees; dairy disaster assistance; and dairy indemnity.

Interestingly, cash subsidies in the US are doled out under Dairy Export Incentive Programme. EU on the other hand

subsidises nearly 50 per cent of its dairy exports.

Let me also dispel another commonly held notion. In an era of market economy, it is generally believed that American/European farmers are dependent entirely on the private supply chain. It's not so. After March 2009, EU had restarted buying surplus butter and milk from dairy farmers at an intervention price of Euro 2,218 and Euro 1,698 per tonne, respectively. In America, milk price support programme ensures that the government buys any surplus amount of cheese, butter and non-fat dry milk at a minimum price. In addition, since 2002, it has introduced a programme to distribute cash subsidies to milk producers when prices fall below a set limit. I see no reason why state governments cannot provide such subsidy support to its dairy farmers when prices fall.

It's not as if state governments do not have resources. Punjab, for instance, had made available Rs 1250 crore in interest free loan spread over five years and on top of it gave a 15-year tax holiday to steel tycoon Laxmi Mittal for investing in the Bathinda refinery. I see no reason why it cannot rescue small dairy farmers who are gradually sinking.

Therefore, to begin with, state governments should consider subsidising the cooperatives to raise the milk procurement price to at least Rs 25 per litre. Secondly, it should also reduce the bank interest on loans taken from existing 12.5 per cent to 7 per cent.

The Centre and the state government should consider measures to rescue milk producers before they start giving up the sector leading to serious shortages and forcing India to become an importer of this vital commodity.

News

Pulses catch corporate purses

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virgin market so far, branded pulses are quickly catching the fancy of corporate bigwigs.

It is evident from the increasing number of diversified companies getting into the retailing of these. The latest entrant, Adani Wilmar, a subsidiary of the Adani Enterprises conglomerate, has set its eyes on a variety of branded pulses including dals. The company has already lined up investments for processing mills. "We see a big future in branding of all commodities. We anticipate a similar conversion from purchase of loose unbranded pulses to the branded form. We have started with toll mill operations and have plans to invest more than Rs 100 crore in our own milling units in the near future," said a spokesperson of Adani Wilmar.

Currently, India's pulses consumption is estimated at 17.5 million tonnes yearly, while domestic production has stagnated at 14-15 mt. But only one per cent is sold under branded consumer packs; the bulk, including urad, tur, moong 37

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andchana are sold in a loose format.

Moong, masoor, arhar, urad, chana and rajma comprise 80 per cent of the pulses market. Adani Wilmar wants all these (whole and split variants) in its portfolio, eventually.

Tata Chemicals had launched branded pulses in December 2010 under an 'iShakti Dals' brand name. The company is taking a step forward, to take on the competition. "Post an overwhelming response (to Tata I-Shakti Unpolished Dals) from customers, we are exploring direct-to-home delivery options or 'Dalon-Call' for customers. We are starting this in Mumbai. We are expecting healthy growth in our branded pulses sales over the next two to three years," said Ashvini Hiran, chief operations officer, consumer products.

Considering the small size of the branded pulses market, regional players have command over national ones.

However, companies with a larger retail network and strong supply chain are making efforts for a national presence.

While Mukesh Ambani's Reliance Retail, and the Future Group's Food Bazaar do in-house branding of pulses and sell through own retail chains, Tata Chemicals, Adani Wilmar and Lakshmi Overseas Industries sell their brands through the modern format of organised retailing.

The recent approval to foreign direct investment (FDI) in multi-brand retailing could boost the segment. "We think it would bring in a positive change in retailing of all commodities, specially pulses. Customers would have more options to choose from and the overall category would grow, with more companies/brands coming in," said the Adani Wilmar official.

Experts in the sector believe the branding of pulses would bring value addition in the commodity. "If companies are entering branded pulses, we can expect value addition and innovation in the products, as we've seen in spices and beverages like tea, coffee etc," said an industry source in this city.

Event Report Indian Ice-Cream Manufacturers Association

Tasting The Cream of Success

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Event Report

I

scream...you scream... we all scream for ice-cream...' Our hearts must have 'sung' this line as a child at the sight of ice-creams. But as our experience suggests, years fail to take away from us the child-like passion for ice-creams. One seldom loses the opportunity to savour the taste of one.

The tropical climate in India makes it a dream for ice-creams.

However, the heartening piece of information is that this Rs 2,500-crore industry in India has seen a growth rate of 15-20% yearly. Figures from the last five years are indicative of the fact that there is an upward trend in the consumption of ice-creams in India.

What is more noticeable is that icecreams are slowly becoming an allseason product and not merely a summer treat. Factors such as rapid urbanisation and globalisation, rising incomes and changing lifestyles have encouraged the growth of this industry.

Talking about the industry of frozen desserts, the market today is decked up with various ice-cream brands and other new concepts of frozen yogurts, frozen custards, frozen puddings, smoothies and gelato that are admirably nursing the sweet tooth of the people. With the concept of frozen yogurt increasingly becoming popular, many national and international brands are sprouting up to satisfy the cravings of all fro-yo fans.

Cocoberry, Yogurt berry, Berrylite, Yogoshack, Froyo and many others have 39

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Event Report already marked their presence in the Indian market serving a tasty sweet treat to health-conscious people with only a few calories and less fat. Unlike the traditional method when carts used to go door to door with high-pitched call of the ice-cream seller, now it has been replaced by big cafes and parlours. With myriad flavours and a variety of icecreams, these parlours have become the most suitable low cost business concept.

The ice cream and frozen novelty market, which struggled for positive sales growth in 2009 and lost sales in 2010, turned a corner in 2011 with a 4.1% increase in total U.S. retail sales to reach $10.7 billion, according to a new report from Mintel. Sales are expected to increase another 4.1% in 2012 to become an $11.1 billion industry.

When buying ice cream or other frozen novelties, 94% of people say they base their decision on flavor, while 83% look at price and 72% look for a sale or promotion. When it comes to brand loyalty, 68% of respondents make their selections based on brand alone. New flavor profiles and ingredients, betterfor-you products and new packaging concepts will be instrumental in the ice cream market's success in the next few years.

IICMA (Indian Ice-Cream Manufacturers Association) and its execution Indian Ice-Cream Industry has witnessed unprecedented growth during the last season. The growth rate of the same was 20 per cent last summer, said Rajesh Gandhi, President of IICMA (Indian Ice-Cream Manufacturers Association) and Managing Director, Vadilal Industries.

Mr Gandhi also said that size of Indian Ice-Cream industry is approximately 5000 cr in both organized and unorganized sectors. He also added that most of the so called unorganized ice-cream companies are now working just like organized sector and witnessing the same rate of growth.

IICMA organized an international Seminar on Ice-Cream industry with the theme, “Global trends in Ice-Cream Industry”. The seminar was held on

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19th December, 2012, at Hotel Westin Raheja Park in the Hi-tech city of Hyderabad. The Congress was inaugurated by the British Deputy High Commissioner Sir Richard Hyde and DevendraSurana President FAPCCI. After the grand success of Last Indian Ice-Cream Congress, New Delhi this March, IICMA (Indian Ice-Cream Manufacturers Association) organized this grand event on the same lines at Hyderabad – and why choose Hyderabad of all places? The answer is a humble one – This city of Nawabs is not only a great consumer of icecreams but also the gateway to South India.

IICMA had invited eminent speakers from the global ice-cream fraternity to share their experiences with IICMA members. Members of IICMA definitely benefited immensely by the efforts of the association. This event went through three main sessions along with a group discussion on latest trends in ice-cream industry across the globe.

Sudhir Shah, Secretary of IICMA and Director Scoops said that the event contented a straight away hit as they had speakers and participants from different parts of the world to understand what was happening there.

Speakers from Tetra Pak, Mec3 Italy, DuPont and Blue Star added a great value to the seminar.While the Secretary General of IICMA, Mr. Samrat A. Upadhyay, stressed on taking upon Issues such as high taxation, problems of the supply chain and the government not acknowledging the status of the ice cream segment are some of the issues that need to be addressed and observed Mr Firoz H Naqvi, Chief Editor of Beverages & Food Processing Times as well as the organising member believed that this occasion had been the perfect platform to share latest updates and also newer technologies and innovations entering the ice cream industry.Ice cream manufacturing is growing in the country but it still has lot more potential, he had observed.

Event Report THRIVING MARKET Come summer and ice-cream manufacturers gear up for doing a roaring business. If market analysts are to be believed, the 2,500-crore industry has been on an expansion drive, eyeing a 15% growth this year despite increasing prices between 1 and 10 across product categories. The branded ice-cream market with leading players such as Amul, Kwality Walls, Vadilal and Mother Dairy is banking on a variety of regional flavours, distribution network and expansion of retail outlets to strengthen their share in the market dominated by unorganised players. The industry also marks the presence of unbranded market for the frozen dessert which is currently valued at Rs 800 crore for 100 million litres per annum.

According to the recent trends, the per capita consumption of ice-creams in India is 300 ml.

In the category of 100 % natural icecream, a premium brand of artisan icecream makers, Natural Ice Cream, has been engaged in satisfying its customers since 1984. “Currently, the industry of ice-cream and frozen desserts occupies a fair market size in India, which has increased by about 40 % in the recent past. The influx of foreign brands and new additions to the categories of frozen desserts are catering not only to the customers but are also creating great business opportunities for investors and franchisees.

ROBUST PROSPECTS G. Chandrashekhar from The Hindu Business Line draws attention tothe fact that India is a robust economy, one of world's fastest growing significant markets; it is bestowed with Healthy GDP growth, Forex reserves and foreign trade. Above all now it has a 2-way FDI flows thus has an open Integration with global market. According to this laureate most urban consumer in today's time are turning less and less price-sensitive and have a vulnerable shopping access in everyday life. So with rising incomes and urbanization the purchasing ability of an Indian has increased. And Ice cream being an Impulse Purchase product is now being apart of instant

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indulgence thus leading to enhanced ice cream sale India.

The massive consumer market in India and the anticipated strong economic growth over the next few years augur well for the ice-cream industry. It is becoming more apparent that the future of the Indian ice-cream industry will be shaped by the organised retail sectors.

With FDI in the retail sector implemented, a boost to the Indian icecream market is in sync. The next few decades should witness the entry of global ice-cream majors into the Indian market, wanting to tap into its potential, and possibly some new domestic e n t r a n t s a s w e l l . M o r e o v e r, improvements in electricity supply and better cold storage logistics will do a world of good to the prospects of this industry.

About the business prospects in this industry,Tetra pack's track of thinking favour a model that offers avenues for making profits at a low investment, that is low investment and high returns. Also according to this company the thing that motivates consumers when buying ice cream is the price and thespecial offers(over 50%choose on this basis).

Brand remains an important factor as well the flavour.

Fitness and health consciousness is another issue that the ice cream Industry is facing. As the consumer is becoming more aware and health conscious the ice cream industry without losing time has indulged into attracting its customer by making diet and health ice creams. To take on the consumer the ice cream industry is facing a powerful competition. Promotional qualities will definitely reach of the Weight Watchers brand, allied with highly indulgent, ontrend flavours that appeal to the core target market of health-conscious women.

TROUBLE IN ICE PARADISE With many States facing a power crunch, kirana shops as well as customers are facing the heat in terms of ice cream sales and consumption respectively.

Manyshop owners in various parts of India are complaining and have stopped stocking ice cream just due to the

consistent power supply problem. Mr Rajesh Gandhi, President, IICMA readily believe that “Ice cream sales would grow 30 to 40 per cent more if the power situation in the country is stable.

Sales in tier-two cities have been most affected by the power cuts.�

Although no data have been collected,

Event Report

the impact of the power cuts has definitely been felt. “There are two serious problems — one, distributors and retailers are not willing to stock material due to the power shortage, and consumers are not buying because they are not able to stock ice cream,” said Mr Gandhi.

The power shortage is a national issue and as of today it is still at a nascent stage. If it continues, we will have to take up this issue and hold an emergency meeting for the same. The main problem is that we don't know who to address this issue to,” added Mr Gandhi.

Since this congress was held in the capital city of Andhra Pradesh, special focus was given to the difficulty faced by the ice cream industry in Andhra Pradesh, which comprises around 3,700 organised and unorganized units.This industry is facing a meltdown thanks to the acute power shortage. Close to 250300 small to medium sized units have already shut shop and many more are on the verge of closure, said Indian Ice Cream Manufacturers Association (IICMA) managing committee member Ajay Reddy, who also helms the citybased Dairy Ice Creams and Frozen Foods as managing director.

Ironically though the ice cream manufacturing units are exempt from power cuts and enjoy 24/7 power, what is taking its toll on the industry is the fact that the ice cream demand has melted by 30-35% due to distributors and dealers, especially in smaller towns, not picking up stocks due to power shortages at their end.

Unlike other sectors the ice cream industry is completely dependent on power as it requires power from the point of production to the point of consumption. Thus with longer power cuts the overall industry is bound to suffer.

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Event Report

Mr Viren Shah, managing director of Hyderabad-based Scoops Ice Cream said power shortage had emerged as the biggest stumbling block for the Rs 120 crore ice cream industries in the state.

"The ice cream retailers in smaller towns are hesitant to buy bulk stocks and are keeping only a day's stock of ice cream with them fearing melting of their stock due to long hours of power cuts."

While the ice cream industry in Hyderabad has not been affected too badly due to the power situation, the business in Visakhapatnam and the district headquarters of the state has barely managed to stay afloat as the power cut duration ranges from two to four hours which was manageable.

According to IICMA president and Vadilal Industries managing director Rajesh Gandhi, as if the grim power situation in the state was not enough, the industry was also facing the heat from various government levies.

"On an average the industry is subjected to 15% VAT and 2% excise duty. The industry can only flourish if the government removes excise duty and states reduce VAT levels." The national ice cream industry is pegged at around Rs 5,000 crore.

Incidentally, in move aimed at providing a fillip to the food processing i n d u s t r y, f i n a n c e m i n i s t e r P Chidambaram had in 2006 fully exempted ice cream industry from the excise duty but this decision was reversed by his successor Pranab Mukherjee who first imposed a 1% excise duty arguing that ice creams were a luxury and later hiked it to 2%.

With Chidambaram back at the helm of the finance ministry, IICMA has now urged Union agriculture and food 43

Oil & Food Journal Jan 2013

processing industries minister Sharad Pawar to urge the FM to remove excise duty, Gandhi added.

Speaking about the potential of the ice cream market, Pradeep Chona of Ahmedabad-based Havmor Ice Cream said even neighbouring Pakistan relishes more ice cream than Indians at around 400 millilitres per person per annum as compared to compared to a per capita consumption of 300 millilitres in India. He pointed out that though high VAT and excise had shaved off their margins, the industry was still growing at a rate of 18% to 20% per annum.

MARKET ISSUES There are certain factors that pose a challenge to the growth of this industry.

These factors include the lack of cold storage chains, irregular supply of electricity and poor infrastructure for storage and transportation. It is a matter of concern for the industry that the Indian cold storage logistics chain is very poor. This obstacle hits the industry hard since an ice-cream is a highly perishable product. To overcome this hurdle and maintain the quality of their premium products, most of the icecream and frozen yogurt manufacturers seek assistance of special vehicles with deep freezers for transportation.

Another issue that bothers the manufacturers is the prevalence of a large number of unorganised players in this industry who offer very low quality products at cheaper rates. The rising prices of milk and allied products are also not making life easier for the manufacturers, as they need to constantly raise the prices of their products, which have ramifications for the demand of their products in the market. Erratic and poor electricity supply in most regions of India is also irksome for the industry.

The way to finding solutions to most of these issues is for an aspiring entrepreneur to first do a thorough research on the frozen dessert industry and analyse the demands and line of

working at several locations. It is important to find out what makes an icecream or frozen yogurt parlour popular in a particular area. Changes should be brought in the menu from time to time and the service as well as the ambience should be enhanced to attract more customers. Bringing in more product mix and matching flavours of homemade desserts may prove very significant.

BOOSTING THE ICE CREAM INDUSTRYIICMA was formed by ice cream manufacturers in the cooperative and private sectors in India to increase consumption and enhance quality standardsof the ice creams.All small, medium and large ice cream players together formed the association. The move was driven by the need to promote ice cream consumption and upgrade the product quality,� said Rajesh Gandhi, president, IICMA and managing director, Vadilal Industries Ltd. Mr Firoz H Naqvi asserts that the association has worked hard toward seeking better measures including reduction value added tax (VAT) as well as requesting the removal of central duty. The members include the likes of Vadilal Industries, Havmor Ice-cream, Hindustan Unilever (Kwality Walls), Arun Ice-cream, Cream Bell Ice cream, Lazza Ice cream, Top N Town, Scoops Ice cream, and Dairy Day Ice cream.

According to Gandhi, the ice cream market in India is estimated at Rs 2,500 crore in the organised sector, growing at 20 per cent. The per capita consumption is around 300 ml per annum in India while it is 700 ml in Pakistan, three litres in China and 22 litres in developed countries like the USA, Japan, Germany and others.In terms of units, both organised and unorganised players put together, the Indian ice cream market stands at 350 million litres, of which Gujarat has the largest share of 15 per cent. With the formation of an association,the member are working towards increasing consumption, food safety and quality, as well as better networking and knowledge sharing amongst members,� according to the eminent president.

Enhancing Productivity

T

PROTECT & SERVE INNOVATIONS IN FOOD PATHOGEN DETECTION High-profile outbreaks of salmonella and E. coli are driving research into revolutionary pathogen detection technology. We from the oils and food journalwould like to discuss certain next-generation food safety techniques, such as DNA sequencing, that are protecting the general public from foodborne contamination.

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ake a moment to digest the figures. In the US, the food sector represents almost 50% of the total industrial microbiology testing market. It is more than double the size of any other industrial segment, including pharmaceuticals. In Europe, meanwhile, the food safety testing market is predicted to top $1bn in five years.

Worldwide, the food testing market has grown at a rapid pace, and with outbreaks and contamination like salmonella, E. coli, listeria, and many more, the food testing market has expanded greatly.

According to this study, regulations and standards of food testing will become more stringent in foreign countries, and more profitable, with projected market value reaching more than $19 billion by 2018. The United States is still the largest market for food testing.

However, the Asia-Pacific region of the world (which includes China and India) is the fastest growing region for food safety testing.

While many governments are adopting food regulations, producers are also contributing their influence to increase safety and stability of food testing.Although pathogen testing is still the most dominant segment of food testing, Genetically Modified Organism (GMO) testing is the fastest growing food testing segment worldwide.

Statistics such as these from Strategic Consulting, a leading resource for business strategy and market intelligence in industrial diagnostics, confirm that protecting the public from food-borne diseases such as salmonella, E. coli, listeria, campylobacter and norovirus is big business in the food processing world.

The global food safety diagnostics market continues annual expansion in double-digit figures and It draws the increasing attention of both the investment community and method developers currently outside the space.

This injection of public and private capital is more than matched by intellectual investment on the part of

Enhancing Productivity regulators, industry and academia. In short, the brightest and the best in the food safety industry have come together in response to a series of high-profile food contamination cases on both sides of the Atlantic.

The food safety testing market is driven by globalization of food supply trade, growing concerns for food safety, technological advancements, increased focus on microbial pathogens, and the emergence of rapid microbial tests.

Other factors propelling market growth include increased demand for food testing equipment with high-end technology and speedy performance, and a shift towards more clear and regular communication of food safety standards.

Food safety has been a major challenge for countries all over the world, with increased consumer preference for fresh, healthy and minimally processed foods pose major challenges to food companies in controlling food contamination. Various food safety testing processes and equipment are available in the market that are used for detecting microorganisms (pathogens), pesticide and Genetically Modified Organisms (GMOs). With growing concerns for food safety, the market for food safety testing products has been witnessing steady growth over the past several years.

The fact that consumers usually avoid buying products from food companies accused of selling tainted products

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prompts food processors to offer products that are free from any harmful organisms. Growth-wise, Asia-Pacific represents the fastest growing region for food safety testing, and is forecast to grow at a CAGR of 6.6% during the analysis period.

Pathogen testing represents the largest segment in the global food safety testing market. By 2015, the worldwide market for pathogen testing products is projected to register a compounded annual growth rate of 4.2% over the analysis period. Meanwhile, GMO testing products represent the fastest growing segment. In terms of end-use segments, processed foods industry represents the largest end use market for food safety testing products globally.

However, demand for food safety testing products from meat industry is forecast to register the fastest CAGR of 5.75 % over the analysis period.

The market has witnessed growing demand for testing devices with innovative biochip and microchip technologies, owing to their ability to detect the presence of new pathogen varieties in food particles. Biochips effectively detect the presence of food borne pathogens such as Listeria, Staphylococcus aureus, Salmonella, E. coli, and others by imprinting different DNA molecules and antibodies on the same chip.

Key players profiled in the report include 3M Microbiology, AES Chemunex SA, Biolog Inc., Celsis

International Plc., Charm Sciences Inc., DupontQualicon, FOSS, GeneScan Europe AG, Genetic ID, Neogen Corp., R-Biopharm AG, and Strategic Diagnostics, Inc. Clearly, making food safe for public consumption is a collaborative effort, with private companies and research organisations working with government bodies to develop cuttingedge detection and prevention technology. Here we profile some of these next-generation techniques.

MOLECULAR BIOLOGY: THE RISE OF DNA SEQUENCING DNA sequencing is the process of determining the nucleotide order of DNA fragments. Its application in the pathogen detection industry has transformed the science of food safety.

DNA sequencing is especially useful in the source-tracking of specific strains, as well as assay development. PCR (polymerase chain reaction)-based techniques, for example, allow scientists to target the genetics of microorganisms, rather than their phenotypic characteristics.

US Company- 3M has developed new pathogen testing technology incorporating isothermal DNA amplification and bioluminescence detection.

Roka Bioscience is currently commercialising rRNA-based detection technology, financed in part by $47.5m of Series D financing. The ATLAS

Enhancing Productivity system is a fully automated molecular instrument for the detection of food pathogens in food and environmental samples and is capable of processing more than 300 samples in eight hours.

The initial menu for the ATLAS system will be the Roka Listeria and Salmonella Detection Assays. The Listeria assay has already received AOAC Performance Tested Method(SM) certification (Method 011201) from the AOAC Research Institute (AOAC-RI).

3M, recently announced it has developed new pathogen testing technology incorporating isothermal DNA amplification and bioluminescence detection. The 3M molecular detection system delivers highly sensitive results by targeting and amplifying nucleic acid in enriched samples.

The automated technology has been evaluated with a variety of food types, including produce, meats, processed foods and food processing-related environmental samples.

Pathogen testing has now been made simple and affordable according to the 3M people Food Safety global marketing development manager.

"Numerous organisms can be tested in a single run and it was designed to help our customers perform fewer repeat tests and make critical decisions faster."

As part of the 3M molecular detection system platform, individual pathogenspecific assays, or procedural tests, will be sold as test kits. Each assay test kit uses the same software interface and same DNA extraction protocol for testing between one and 96 samples on each run. Assays for salmonella, E. coli O157 (including H7) and listeria are already available. A test for listeria monocytogenes is expected in early 2012.

FIRST DEFENCE: PORTABLE PATHOGEN DEVICES In the wake of increased homeland security threats, the US military industrial complex has invested heavily in new state-of-the-art technology, a significant amount of which is being adapted by scientists working in the sphere of food pathogen detection and DNA analysis.

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Idaho Technology has developed the R.A.P.I.D. LT, a real-time PCR instrument capable of analysing samples for the presence of targeted nucleic acid sequences.

Combining rapid air thermo cycling and a real-time fluorimeter, it can reliably identify test samples in less than 35 minutes. Included with the instrument is a laptop computer pre-loaded with analysis software.

The revolution in portable pathogen detection devices is gaining momentum.

Advances in Nano biotechnology have allowed for miniaturisation of devices, with experts in the fields of engineering, nanotechnology and food science joining forces to introduce lab-on-a-chip technologies, leading to the development of portable, hand-held biosensors.

BRAIN FOOD: THE ROLE OF ACADEMIA Lab-on-a-chip technologies have led to the development of portable, hand-held biosensors.

This is an increase of around a third from the organisation's 2010 budget, $324m of which would be spent on overhauling food safety and nutrition programmes to enforce the new food safety modernization act (FSMA).

Across the Atlantic, the UK Food Standard Agency (FSA) has identified priority pathogens whose control and reduction would deliver the greatest public health gains. These are campylobacter, which causes the most cases each year; listeria monocytogenes, which causes the greatest mortality, and noroviruses.

The FSA has funded a research project by the University of Aberdeen, which used multilocus sequence typing

(MLST) to compare Scottish campylobacter isolates from human infections with those from food and environmental sources. The research identified retail chicken as the single largest source of campylobacter infection in Scotland.

A further important finding from this project was that MLST profiles of campylobacter isolated from cattle and sheep faeces sampled during the study matched those isolated from human infections. This suggests that farm ruminants could also be a significant risk factor for campylobacter infection.

THE FUTURE OF FOOD PATHOGEN DETECTION Until recently, pathogen reduction efforts focused on the pre-release screening of the finished product, while doing little to prevent processing failure or improve production efficiency.

Today, food safety efforts strive to eliminate pathogens by focusing on the entire processing chain - from preprocess raw-material screening to process control and, finally, to limited finished-product screening.

Nowadays most food company in fact the whole of food industry is in for food pathogen detection innovation in general, and DNA sequencing in particular.

It won't be long before every lab has a sequencer. As databases containing the molecular sequencing of foodborne pathogens become available, the basic task would be to identifying the source of foodborne outbreaks will become easier and quicker. It will also help prevent the wrong food source being implicated, with all the economic and political fallout that follows.

Consider the image below (Figure 1).

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Food Storage

I

Food Grain Losses In India A State of Chaotic Affair 48

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NTRODUCTION:Food grains form an important part of the vegetarian Indian diet. Grain production has been steadily increasing due to advances in production technology, but improper storage results in high losses in grains. Post-harvest losses in India amount to 12 to 16 million metric tons of food grains each year, an amount that the World Bank estimates could feed one-third of India's poor. The monetary value of these losses amounts to more than Rs. 50,000 crores per year. Natural contamination of food grains is greatly influenced by environmental factors such as type of storage structure, temperature, moisture, etc. During storage, quantitative as well as qualitative losses occur due to insects, rodents, and microorganisms. A large number of insect pests have been reported to be associated with stored grains. At any given time 60–70 Per cent of grains are stored on the farm in traditional structures like Kanaja, Kothi, Sanduka, earthen pots, Gummi and Kacheri. However, indigenous storage structures are not suitable for storing grains for very long periods. The post-harvest losses in the two major food grains - rice and wheat where about 75 per cent of the total postharvest losses occurring at the farm level and about 25 per cent at the market level.

The storage losses at different stages have added up to about 36 per cent of the total post-harvest losses in rice and 33.5 per cent in wheat, while harvesting and threshing operations together account for about 17 per cent of total losses in both the crops. Transit losses at different levels have been an important component of post-harvest losses, contributing to about 20 per cent of the total losses. Educating and training the farmers on post-harvest operations would greatly help in reducing the postharvest losses in food grains. The establishment of small-size cold storage units in the production centres would help in reducing the storage losses. In this direction, the zero energy cool chambers technology developed by the Indian Council of Agricultural Research needs to be popularized. It is high time that both the Central and state

Food Storage governments should think about the severity of the problem of storage losses.

One strategy could be that the Food Corporation of India could keep the stocks with the farmers.

An adequate organization needs to be set up at the Centre and in the states to take coordinated action in this direction. We should go in for a systems approach rather than piece meal. Establishment of National Grid of rural godowns as per ecological zones is a must. The 'Save Grain Campaign' programs needs to be strengthened. In villages, from primary school through to high school and intermediate level the subject of grain storage should be taught. The subject should also be included in the job card of extension workers. Arrangement for training in grain storage for the framers should be made all over the country- in the villages at farmers' house where 70–80% grain is stored.

Analysis A country like India where around 41.6 Per cent of the total population falls below the international poverty line cannot afford to let its –food grain go to waste, especially when the grain procurement figures have reached dizzying heights. But it is indeed ironical and extremely unfortunate that government officials have admitted to the fact that there is a lack of enough grain storage and distribution infrastructure in the major grainproducing areas of the country when an overwhelming majority of the population is wallowing in extreme poverty, famine and hunger has resulted in untimely deaths and widespread devastation. To top it,food prices are skyrocketing, owing to shortage of food supplies.

Television reports have shown sacks of rotting wheat and other grains lying unattended in railways yards, in the open in various grain storage sites with no precaution against rats, disease droplets and damp air. This has sparked a nationwide outrage with the grave situation receiving international media coverage and top economists around the world discussing the conflicting issue of 49

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prevalent conflicting issue of hunger and surplus grain storage problems.

Economists have blamed the government for concentrating the benefits of the Green Revolution in a few selected states only thereby depriving other poorer states of the country.

Favorable weather conditions, proper supply of irrigation water, fertilizers etc. have resulted in excellent growth of various crops. In 2008, the grain output was a record 231 million tonnes. But owing to an acute shortage of proper storage facilities in these intensive agricultural belts, the crops have rotted while people in most other parts of the country had been suffering from hunger

and high food prices. When the Supreme Court of India had directed the India Government to release about 2.5 million tons of grains to feed the country's poor population during the next six months to come, the government had been unable to do so citing high transportation costs and presence of generous food subsidies to the poor as reasons. The Supreme Court had not taken kindly to these excuses, especially when it was 'politely' asked to stay out of the complicated realms of governmental policy making.

The court had asked the government to tackle the slowly aggravating problem of grain shortage but the government had not taken any significant action. As a

Food Storage result, about 50,000 tons of wheat has already been found to have rotted by the mid of this year (though there are conflicting reports stating different figures). The Food Corporation of India had been asked time and again to modernize its storage and distribution facilities but it too has been making excuses in order to exempt itself from the humongous task of distributing the grain to feed the lakhs of hungry poor a c r o s s t h e c o u n t r y.

The reason for this noticeable government apathy is that the government may not be willing to bear the extra expenses that will be incurred during transporting this surplus food to various parts of the country, especially the remote areas. The state of Punjab which had benefitted the most from the Green Revolution alone needs storage capacity for about 7.56 lakh ton grains. It has admitted that it lacks in the necessary infrastructure to store the excess grain.

Also, the cost of construction and uniform distribution is also too high for the court directive to be implemented.

The government had earlier sanctioned the construction of about a capacity of 150 lakh ton storage sites but only a meager 0.1% of the project has come into existence. Government figures state that the country has a grain stock of about 60.4 million tons which is about 26 millions in excess of the quantity required to maintain a suitable buffer stock. The government officials have also complained that it would take about

Rs.27 crore per day to distribute this surplus crop – a cost which is difficult for the country's economy to sustain.

As a result, tonnes of grains have already deteriorated; despite the FCI's claim that it had taken adequate steps to ensure that even if the food grains were kept in the open, there were proper precautions against insects, rats and the rain, these measures were found lacking in the storage sites.

So ultimately whatever grain is reaching the poorer sections of the society is also of extremely poor quality, thereby inviting the wrath of the common people as well as the local opposition politicians who want to cash in on the situation and make the government appear in poor light. Then there are private traders who try to increase the prices of food in the absence of good quality food grains.

History bears testimony to the government mismanagement in food grains storage which had resulted in devastation as terrible as the 1943 Bengal famine with a record death figure of 3 million. It was found out that despite having sufficient food grain, a lack of distribution measure, hoarding and the overall panic that ensued from are some of the reasons that made the situation spiral out of control thereby resulting in the famine.

According to media reports, the government has always struggled with food security issues. Even way back in the mid 1950's, it was faced with the issue of nationwide starvation and had

imported food grains from the USA. Food shortage leads to high food prices.

Hence the government seems to prefer stocking excess food grains at the risk of rotting and quality deterioration rather than risk running out of food. But even if it is stocking food grains, these are not coming into use when the country actually stands the risk of food crises.

Economists have suggested a somewhat decentralized model of food production for the country to reduce the cost of transporting food grains and the need for storing them for long; by spreading food cultivation uniformly over the country, the government will not only save a substantial amount of money that goes into warehousing and reduce the time required for distribution, it can also ensure that the crops are actually reaching the beneficiaries.

The government also needs to keep track of the country's gross consumption figures and then store only what is in excess, instead of storing majority of the grains and depriving the poor people.

Most importantly, India needs new and sufficient storage facilities. The government has already approved of the construction of 13 lakh tonnes of storage capacity to tackle this problem. But it needs to be seen that the plan is affected.

India has more than enough food grains to sustain its billion strong populations.

So citing poor production as the reason behind the hunger problem is laughable indeed. What the government needs to do is come up with a creative solution to this problem and make sure that corruption and bureaucracy are not bottlenecking the path to progress.

Otherwise the deep-seated anger and frustration of the deprived people are bound to erupt one day and we run the risk of facing nothing short of a civil war leading to extreme anarchy and ouster of the government. Such a situation is undesirable; hence the government must act before it's too late.

Present state of affairs Two years ago, Parliament erupted in chaos as the opposition slammed the government over the issue of rotting grains due to lack of sufficient storage

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Food Storage

space, and this year has been no different.Thegovernment has claimed to have added between 3 million tons and 4 million tons of storage capacity.But in the past red tape has delayed such plans, leaving food out in the open to rot. India produces enough food to feed its 1.2 billion people and the government purchases millions of tons of grains from farmers, guaranteeing them high prices and using the food for its subsidy programs.But corruption and bureaucratic inefficiencies means that food doesn't always reach the neediest.

Failure to meet promises to improve storage and distribution networks has compounded the problem.

In mid-January, Prime Minister Manmohan Singh called India's malnutrition problem a national shame after a survey revealed that 42% of the nation's children are underweight. The present state of affair is like this - there are more than 200 million food-insecure 51

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people in India, the most of any country.

The International Food Policy Research Institute's 2011 Global Hunger Index ranked India 67th out of 81 countries.

The food ministry is surely facing a problem of plenty. Either you supply more grains for welfare programs or keep huge inventories, there is a high cost involved in all.Up to 7% of the country's annual grain production goes to waste because of insufficient storage space and creaky transport and distribution networks according to the survey of Ernst & Young.

Only about a fifth of current warehouses are located near areas which don't produce grains, meaning the government has to rely on overloaded railways for transport, resulting in delays in reaching the needy.Efforts to attract private investment have foundered due to bureaucratic hurdles.

But now It is becoming very important that the government should offer tax

breaks to attract investors to build warehouses and other infrastructure.

In fact the poor coordination between the federal government and India's states also results in the spoilage of grains that are properly stored. More than a million tons of wheat in state-run warehouses from previous bumper crops is likely to go bad because the government has failed to distribute it over the past two to three years. In other cases, grain spoils due to the lack of simple things such as high quality weather-resistant bags.

Hardy grains such as rice can be stored for long periods, provided such basic measures are taken.Inefficiencies in food distribution push up food costs even for those Indians who are not starving and are a major reason that inflation remains high. Well what if there's a drought once the food security law is in place. One can't rely on imports .India needs to have a good storage capacity.

Indian Retail

A

Foreign Direct Investment The Big Bang in

Indian Retail

By Arun Kr. Singh & P K. Agarwal

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BSTRACT:The winds of globalization sweeping across has taken the Indian economic environment in its fold and the proposals for further integration has gained momentum, The transformation has also changed the Indian consumer from a state of conserving resources, he's now ready to accept the shopping culture. The government encouraged by the outcome of economic policy of 1991 in India, has proposed retail reforms mainly as 100% FDI in the retail sector in India. It may benefit by bringing in investment into development of complete backend infra structure like cold chain & supply chain enhancing efficiency from farm to fork, as well as eliminating the exploitative system of middlemen which bleeds the farmers and squeezes the consumers.

The paper scrutinizes the relationship of Foreign Direct Investments with the Indian Retail Sector. However, the Indian government must take decision to contain this revolution & safeguard the health of the Indian retail sector to stabilize themselves against competition from the giant players of the global economy in the present state of slowing growth, stubborn inflation & widening fiscal deficit in the country.

India's retail industry is divided into organized and unorganized sectors. Post liberalization, organized retail has grown exponentially and is a testament of the Indian middle class's burgeoning purchasing power. As a consequence, the opening up of the wholesale and single brand retail sector to foreign direct investment (“FDI�) was inevitable. India is ranked as the third most attractive nation for retail investment among 30 emerging markets with domestic companies like the Future Group, Tata's Westside, Reliance Fresh, Raheja Group and Bharti Retail competing for market share.

The current regulations on retail allow 100% FDI in wholesale cash-and-carry trading. In single-brand retailing, 100% FDI is permitted while it is prohibited in multi-brand retailing. The question arises whether opening up of FDI in multi-brand retail will create

Indian Retail problems or provide opportunities.

There is no clear answer and ample views have been expressed by that in favour and against FDI. This paper is an attempt to get an insight as to what are the trends in Indian retail industry, advantages & disadvantage of 100% FDI in retail.

Keywords: Retail; Organized Retail; Unorganized Retail; FDI. 1. INTRODUCTION For Indian retailing, things started to change slowly in the 1980s, when India first began opening its economy.

Textiles sector (which companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim) was the first to see the emergence of retail chains. Later on, Titan, maker of premium watches, successfully created an organized retailing concept in India by establishing a series of elegant showrooms. For long, these remained the only organized retailers, but the latter half of the 1990s saw a fresh wave of entrants in the retailing business. This time around it was not the manufacturer looking for an alternative sales channel.

These were pure retailers with no serious plans of getting into manufacturing. These entrants were in various fields, like - FoodWorld, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.

Now India is in the midst of a retail boom. The sector witnessed significant transformation in the past decade from small-unorganized family-owned retail formats to organized retailing.

Indian business houses and manufacturers are setting up retail formats while real estate companies and venture capitalist are investing in retail infrastructure. Many international brands have entered the market. With the growth in organized retailing, unorganized retailers are fast changing their business models. However, retailing is one of the few sectors where foreign direct investment (FDI) is not allowed at present.

2. RESEARCH METHODOLOGY The sheer potential of Retail sector and its contribution in Indian economy 53

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highlights the relevance of this paper.

The objectives of paper are : *Advantages & Disadvantages of FDI in Retail. * Impact of FDI on various stakeholders. * Evaluate the effect of Organized Retail on the Unorganized Retail.

3. MATERIAL AND METHOD The study is based on different literatures, Case studies and analysis of organized retail market.

3.1.Indian Retailing Trends The retail industry in India is of late often being hailed as one of the sunrise sectors in the economy. AT Kearney, the well-known international management consultancy, recently identified India as the second most attractive retail destination globally from among thirty emergent markets. It has made India the cause of a good deal of excitement and the cynosure of many foreign eyes. With a contribution of 14% to the national GDP and employing 7% of the total workforce (only agriculture employs more) in the country, the retail industry is definitely one of the pillars of the Indian economy. * Modern retail formats - The growth of western-style malls is changing the way urban consumers shop. We're seeing many bigger box, value based formats setting up shop. The size of these stores is about 50,000 square feet, a departure from the smaller mom & pop-type store that dominates the local retail landscape.

* Shoppers' Stop - department store format. * Westside - emulated the Marks & Spencer model of 100 per cent private label, very good value for money merchandise for the entire family. * Giant and Big Bazaar hypermarket/cash & carry store. * Food World and Nilgiris – supermarket format. * Pantaloons and The Home Store specialty retailing. *Tanishq has very successfully pioneered a very high quality organized retail business in fine jewellery. A new entrant in the retail environment is the 'discounter' format. It is also is known as cash and- carry or hypermarket. These formats usually work on bulk buying and bulk selling. Shopping experience in terms of ambience or the service is not the mainstay here.

3.2.FDI in Retail Industry FDI in retail industry means that foreign companies in certain categories can sell products through their own retail shop in the country. At present, foreign direct investment (FDI) in pure retailing is not permitted under I n d i a n l a w.

Government of India has allowed FDI in retail of specific brand of products.

Following this, foreign companies in certain categories can sell products through their own retail shops in the country.

India's retail industry is estimated to be worth approximately

Indian Retail US$411.28 billion and is still growing, expected to reach US$804.06 billion in 2015. As part of the economic liberalization process set in place by the Industrial Policy of 1991, the Indian government has opened the retail sector to FDI slowly through a series of steps: 1995 : World Trade Organization's General Agreement on Trade in Services, Which includes both wholesale and retailing services, came into effect.

1997 : FDI in cash and carry (wholesale) with 100% rights allowed under the government approval route.

2006 : FDI in cash and carry (wholesale) brought under the automatic route. Up to 51 percent investment in a single-brand retail outlet permitted.

2011 : 100% FDI in single brand retail permitted.

The Indian government removed the 51 percent cap on FDI into single-brand retail outlets in December 2011, and opened the market fully to foreign investors by permitting 100 percent foreign investment in this area.

Government has also made some, albeit limited, progress in allowing multibrand retailing, which has so far been prohibited in India. At present, this is restricted to 49 percent foreign equity participation. The specter of large supermarket brands displacing traditional Indian mom-and-pop stores is a hot political issue in India, and the progress and development of the newly liberalized single-brand retail industry will be watched with some keen eyes as concerns further possible liberalization in the multi-brand sector. In this Paper, Author discusses the policy developments for FDI in these two retail categories, with a focus on the details of the multi-brand retail FDI discussion.

3.3.FDI in “Single-Brand” Retail While the precise meaning of singlebrand retail has not been clearly defined in any Indian government circular or notification, single-brand retail generally refers to the selling of goods under a single brand name.

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(FIPB) sanctions and conditions mentioned in Press Note 3[8]. These conditions stipulate that: Only single-brand products are sold (i.e. sale of multi-brand goods is not allowed, even if produced by the same manufacturer).Products are sold under the same brand internationally *Single-brand products include only those identified during manufacturing *Any additional product categories to be sold under single-brand retail must first receive additional government approval FDI in single-brand retail implies that a retail store with foreign investment can only sell one brand. For example, if Adidas were to obtain permission to retail its flagship brand in India, those retail outlets could only sell products under the Adidas brand. For Adidas to sell products under the Reebok brand, which it owns, separate government permission is required and (if permission is granted) Reebok products must then be sold in separate retail outlets.

3.4.FDI in “Multi-Brand” Retail While the government of India has also not clearly defined the term “multibrand retail,” FDI in multi-brand retail generally refers to selling multiple brands under one roof. Currently, this sector is limited to a maximum of 49 percent foreign equity participation.

These are positive step and it will encourage international brands to set up shop in India. On the other hand, this will also lead to competition among Indian players. It will be the consumers who stand to gain,'' This would not change the market dynamics immediately as it will take some time for these plans to fructify. The growing dominance of multinational companies in the country's $200 billion retail business, had warned that any move to increase FDI in the retail sector would ruin the business of small and medium traders scattered over the country.

Organized retailers in India are opposing the entry of MNCs in retail trading because of their predatory pricing strategy that wipes out competition, when the Government decides to allow

foreign players to enter the retail Arun Kr. Singh et al / VSRD International Journal of Business & Management Research Vol. 2 (7), 2012 space, it should first restrict them to lifestyle products segment before permitting them to spread their wings into other areas like grocery marketing that has a direct impact on `kirana stores'.

FDI in retail trade has forced the wholesalers and food processors to improve, raised exports, and triggered growth by outsourcing supplies domestically. The availability of standardized products has also boosted tourism in these countries. FDI in retail sector has been a key driver of productivity growth in Brazil, Poland and Thailand. This has resulted in lower p r i c e s t o t h e c o n s u m e r, m o r e consumption and higher profit for the producer.

4. FOREIGN DIRECT INVESTMENT - IMPACT AND ANALYSIS Market liberalization, a growing middle-class, and increasingly assertive consumers are sowing the seeds for a retail transformation that will bring more Indian and multinational players on the scene. The big Indian retail players looking to expand their operations include Shopper's Stop, Pantaloon, Reliance, Lifestyle, Food World, Vivek's, Nilgiris, Ebony, Crosswords, Globus, Barista, Café Coffee Day, Wills Lifestyle, Raymond, Titan, Bata and Westside. Wellestablished business houses such as Wadia, Godrej, Tata, Hero, etc., are drawing up plans to enter the fastgrowing organized retail market in India. The international players currently in India include McDonald's, Pizza Hut, Dominos, Levis, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp, Kodak, and the Medicine Shoppe. Global players are entering I n d i a i n d i r e c t l y, v i a t h e licensee/franchisee route, since Foreign Direct Investment (FDI) is not allowed in the sector. Despite all these developments, the organized retail business still comprises a small

Indian Retail proportion of the total size of the Rs 9,00,00-crore ($200 billion) retail sector. Retail business is growing at 5-6 per cent per annum.

The size of organized retailing was estimated around Rs 26,000 crore in 2004, about three per cent of the total.

However, it is now set to grow at 25-30 per cent per annum. In developed countries, organized retailing makes for over 70 per cent of the total business.

Recently, the Government announced its intention to open up the retail sector to foreign investment. It is still, however, debating whether to allow 26 per cent or 49 per cent FDI in the sector.

Initially, the idea was to begin with 26 per cent and then gradually liberalize it further. However, since China moved from 49 per cent to 100 per cent FDI in this sector last year, the Commerce Ministry and the Prime Minister's Office (PMO) appear to be inclined to go for 49 per cent FDI at one go, despite opposition from Left parties.

Even as the government is debating the level FDI in of retail, a number of foreign players, including the world's largest corporation, the $288- billion Wal-Mart Stores, Inc., have announced their intention to enter India in a big way. With the impending opening up of the sector to overseas investment, they are now keen on forays into the sector in partnership with multinational chains. According to industry analysts, as many as 20 big Indian companies are working on plans to enter the sector in partnership with foreign investors.

Despite all these favourable developments, the Government appears to be still dithering in giving a green signal to FDI in this sector in view of the opposition from Left parties. It is indeed unfortunate that this issue is hanging fire for nearly four years now, even as the government has allowed foreign investment in a number of sectors including banking, telecom and insurance.

As of now, the Indian retail sector, largely due to its fragmented structure, suffers from limited access to capital, labour and suitable real estate options. In

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contrast, China, which allowed 49 per cent FDI in the retail sector since 1992, benefited immensely with foreign players bringing capital and new technologies and growing export market for domestic products. At present, around 40 foreign retail players account for almost 20 per cent of the organized retailing in that country. India is tipped as the second largest retail market after China, and the total size of the Indian retail industry is expected to touch the $300 billion mark in the next five years from the current $200 billion. The size of organized retailing is expected to touch $30 billion by 2010 or approximately 10 per cent of the total. Various retailers from across the word have been visiting India over the past few months with a view to establishing their presence in a market that is expected to witness exiting developments.

On the contrary, the opening up of the sector to FDI will lead new economic opportunities and there will be more employment generation. According to a policy paper prepared by the Department of Industrial Policy and Promotion (DIPP), FDI in retail must result in backward linkages of production and manufacturing and spur domestic retailing as well as exports.

The opening up of retail to FDI should be designed The opening up of retail to FDI should be designed in a such as way that many sectors - including agriculture, food processing, manufacturing,

packaging and logistics -reap benefits. It is understood that the multinationals that invest in retail business in India would also source Indian goods for their international outlets in a big way and thus provide a boost to Indian exports.

Indian retail chains would get integrated with global supply chains since FDI will bring in technology, quality standards and marketing.

According to the World Bank, opening the retail sector to FDI would be beneficial for India in terms of price and availability of products. Experience everywhere has shown that organized retailing tends to have a major controlling effect on inflation because large organized retailers are able to buy directly from producers at most competitive prices. The scale of operation and technology help organized retailers score over the unorganized players, giving the consumers both cost and service advantages.

Government has opened up the real estate sector by allowing 100 per cent FDI in the construction projects. The move is expected to attract foreign funds and new technology into the market.

Second, Foreign Trade Policy 2005-06 has extended the benefit of the export promotion capital goods (EPCG) scheme to the real estate sector.

This is expected to tremendously boost the organized retail sector by enabling it to create better and modern

Indian Retail infrastructure. Also, the extension of concessional duty scheme for import of capital goods by retailers with minimum area of 1,000 square metres and implementation of VAT will significantly help organized retailing.

5. ADVANTAGES OF FDI IN RETAIL 5.1. Opportunities Galore While it is important not to lose sight of the local “Mom and Pop” shops, there is a distinct opportunity for FDI in multi-brand retail. At the present moment, Indian companies are exporting different types of products to numerous retailers across the globe.

There is a large segment of the population which feels that there is a difference in the quality of the products sold to foreign retailers and the same products sold in the Indian market.

In view of the availability of higher disposable incomes for Indians, there is an increasing tendency to pay for quality and ease and access to a “onestop shop” which will have a wide range of different products.

If the market is opened, then the pricing could also change and the monopoly of certain domestic Indian companies will be challenged. In the eventual analysis, the consumers will benefit in the form of potential lower prices due to enhanced and, possibly, tough competition in the market.

5.2. Benefits for the Farmers

Presumably, with the onset of multibrand retail, the food and packaging industry will also get an impetus.

Though India is the second largest producer of fruits and vegetables, it has a very limited integrated cold-chain infrastructure. Lack of adequate storage facilities causes heavy losses to farmers, in terms of wastage in quality and quantity of produce in general, and of fruits and vegetables in particular.

With liberalization, there could be a complete overhaul of the currently fragmented supply chain infrastructure.

Extensive backward integration by multinational retailers, coupled with their technical and operational expertise, can hopefully remedy such structural flaws.

Also, farmers can benefit with the “farm-to fork” ventures with retailers which helps (i) to cut down intermediaries (ii) (ii) give better prices to farmers, and (iii) (iii) provide stability and economics of scale which will benefit, in the ultimate analysis, both the farmers and consumers.

5.3. Improved Technology And Logistics Improved technology in the sphere of processing, grading, handling and packaging of goods and further technical developments in areas like electronic weighing, billing, barcode scanning etc.

could be a direct consequence of foreign companies opening retail shops in India,. Further, transportation facilities can get a boost, in the form of increased number of refrigerated vans and precooling chambers which can help bring down wastage of goods.

5.4. Impact on Real-Estate Development Retail is closely dependant on real estate as any retailer will require substantial spaces for setting up business.

Realestate in India has gone through a revamp due to the demand of high-end retail malls and people's changing perception towards an enjoyable shopping experience. Thus real estate can get a further facelift in India and receive more investment with the opening up of FDI in multi-brand retail.

6. DISADVANTAGES OF FDI IN RETAIL Opponents of the FDI feel that liberalization would jeopardize the unorganized retail sector and would adversely affect the small retailers, farmers and consumers and give rise to monopolies of large corporate houses which can adversely affect the pricing and availability of goods. They also contend that the retail sector in India is one of the major employment providers and permitting FDI in this sector can displace the unorganized retailers leading to loss of livelihood.

1. The entry of large global retailers such as Wal-Mart would kill local shops and millions of jobs.

2. The global retailers would collude and exercise monopolistic power to raise prices and monopolistic (big buying) power to reduce the prices received by the suppliers.

Hence, both the consumers and the suppliers would lose, while the profit margins of such retail chains would go up.

3. It would lead to lopsided growth in cities, causing discontent and social tension elsewhere.

However, these arguments can be

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Indian Retail overruled in the light of the ICRIER study conducted in India in 2008, which showed that although unorganized retail suffered initially with the opening up of organized retail in their vicinity, this effect significantly weakened over time.

The rate of closure of unorganized retail shops in gross terms was found to be 4.2 % per annum, which was much lower than the international rate of closure of small businesses. Similarly, the rate of closure on account of competition from organized retail was found to still lower, at 1.7 per cent per annum. This was achieved through competitive response from traditional retailers and through improved business practices and technology up gradation.

However, the development of organized retail has the potential of generating employment for both the skilled and unskilled sections of the population.

The Government can protect small retailers by restricting FDI to be permitted only for stores having floor size greater than, say, 2,000 square feet.

Moreover, monopolies of large corporate houses can also be controlled by the Government by enforcement of strict regulations and, where needed, through the Competition Commission of India which is empowered to evaluate abuse of dominant position.

The foreign direct investment (FDI) in the Indian retail sector should be allowed in a phased manner so that it could serve the purpose of much-needed capital and bring boom in the sector, according to Confederation of Indian Industry (CII) Chairman Kishore Biyani.

1. FDI should be gradually allowed first in relatively less sensitive sectors like garments, lifestyle products, house ware and entertainment."

2. Alternative funding mechanisms and investment opportunities should be considered like FIIs and venture capital in the primary market, besides FDI. Hence they should be legalized and encouraged in the primary market.

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formation, which would take at least two-three years. The gradual inflow of FDI should not be a hindrance for the growth of the retail sector.

Goals: 1. To serve the purpose of much needed capital and bring a boom in this sector.

2 . To e n h a n c e t h e b a c k e n d infrastructure.

7. WHETHER FDI IN RETAIL SHOULD BE ALLOWED IN INDIA? Three arguments are generally extended against allowing FDI in the retail sector.

First, this will prevent the growth of domestic organized retail industry.

Second, it will result in closure of small retail stores, the so-called mom-and-pop stores and third, that it will disrupt the social community and the given way of life. The first argument is passes simply because with the entry of Reliance, Tatas and other large domestic players the domestic retail industry has surely come of age. These corporate don't need protection. Actually, if these infants are protected any longer they have good chances of becoming delinquent adults.

Soon enough, monopoly rents will begin to accrue and bad habits will get entrenched and it will then be more difficult to open the sector.

Domestic players have the best locations anyway and a clear head start. The equity

argument does not have solid empirical basis. As the ICRIER study on the same subject has shown, liberalization of retail raises overall economic welfare and does not result in loss of employment. Some restructuring will take place but local markets will not close down. As the entry of Haldiram has not led to the demise of Nathus and Agarwal mishthan bhandars. Both can coexist as they fulfill different needs and serve different clientele. Organized retailing generates additionality of demand by reducing costs, lowering prices and also improves returns to producers by eliminating unnecessary intermediaries. The third argument has greater substance. Malls could lead to greater urban anonymity and a complete break down of the bazaar culture and the disappearance of the 'down town' space that has its own charm. But in France, Germany, the Nordic countries and also other parts of Europe, experience has shown that local communities can thrive if they are empowered and involved in urban planning. Organized retail does not necessarily result in the dreaded mid-west. So FDI in retail improves growth prospects, does not harm equity and discourages monopoly rents and therefore should be allowed.

8. CURRENT REGULATORY FRAMEWORK The regulatory regime for the existing

Indian Retail homegrown retailers is quite exhaustive with as many as 40 licenses and permissions required to be obtained by the retailer from diverse authorities, depending on the nature of activity.

For example, a multi-brand retailer selling food and perishable items has to have a prevention of food adulteration license under the Prevention of Food Adulteration Act, a weights & measures license under Weights & Measures Act for regulating the weights and measures and labels on the food products sold, along with an agricultural produce marketing committee license under the Agricultural Produce Marketing Committee Act for selling fruits and vegetables. If a retailer decides to launch a store in more than one state then the number of licenses will multiply accordingly. Therefore, an entity establishing retail stores across India will have to face enormous licensing obligations in each state of operation.

This too acts as a deterrent.

As the government has opens up the sector to FDI, in addition to the regular operating licenses, chances are that the foreign multi-brand retailers will have to seek investment approvals as well from the central regulator which, at present, is the Foreign Investment Promotion Board. With the passage of time, the expectation would be that the multitude licenses across different states would be reduced and (possibly) homogenized.

9. FUTURE SCOPE The sentiment towards 100 percent FDI in retail sector is gathering pace.

Currently, the UPA has a majority in the house and it seems quite possible that they will be able to pass the bill, making FDI in multi-brand retailing, a reality. Moreover, with state governments like Punjab working with modern retailers in furthering improvement of trade, there is a possibility that support will flow in from other state governments as well.

However, the opposition led by the BJP is not in favour of this move and has presented a report recently to the Parliament recommending a complete ban on FDI in retail.

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strategic investment opportunity for global retailers, who have been waiting to invest in India. This may have a significant impact on the current arrangement of foreign players.

This policy will require investment from retailers in areas of supply chain, especially for perishable products, thus helping farmers to get better income leading to an inclusive growth in the country. Given the large number of SKU's that retailers stock Small and Medium Enterprises (SME) sector is also set to gain from this move due to preference given by retailers to private label brands. The move will also encourage smaller suppliers to take their products to a national platform that they could not previously manage due to lack of an organised supply chain of their own. This policy will also open up avenues for attracting, developing and retaining talent. Contract manufacturers would also benefit from these policy changes. With the global economy still recovering, investment in India is lucrative to a retailer attributable to strong consumerism, rising disposable income, growing middle class population, favorable macro and micro economic indicators supplemented by a stable government.

10. CONCLUSION In the final analysis, for India, FDI in multi-brand retail should be seriously considered by the government and,

as with many other sensitive sectors (like defence); a gradual opening up could be made possible. Despite country wide speculation on the plight of various Stakeholders, trading associations, politicians, etc. have given various arguments for and against FDI in retailing. However, such arguments are largely based on perception and there has not been serious academic research in this area.

India needs to take a lesson from China where organized and unorganized retail seem to co-exist and grow together.

Further, India's local enterprises will potentially receive an up gradation with the import of advanced technological and logistics management expertise from the foreign entities. In our view, the government has an opportunity to utilize the liberalization for achieving certain of its own Targets: *improve its infrastructure; *access sophisticated technologies; *generate employment for those keen to work in this sector FDI would lead to a more comprehensive integration of India into the worldwide market and, as such, it is imperative for the government to promote this sector for the overall economic development and social welfare of the country. If done in the right manner, it can prove to be a boon and not a curse.

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