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  • Empowering India’s MSMEs: Navigating the 45-Day Payment Rule

    In India, there’s a new rule called the 45-day MSME payment rule. It says big companies have to pay small businesses (MSMEs) on time. This is important for small businesses in India because it helps them stay financially healthy and run their businesses smoothly.

    The 45-day MSME payment rule mandates that large companies must clear payments to Micro and Small Enterprises (MSEs) within 45 days of receiving goods or services, or within 15 days if no written agreement exists.

    This regulation aims to mitigate the challenges faced by the small-scale sector due to delayed payments, which often lead to cash flow constraints and operational disruptions. By enforcing stricter payment timelines, the rule seeks to foster a more equitable business environment, empowering MSMEs to thrive and contribute to India’s economic growth.

    In this article, let’s understand this rule and see what it means for businesses in India.

    Consequences of Non-Compliance
    Impact on Micro and Small Enterprises(MSEs)
    Benefits for MSMEs
    Challenges for Big Businesses
    Proactive Measures Required
    Exemptions and Exceptions
    Preparing for Compliance

    Consequences of Non-Compliance

    India’s recent enforcement of the 45-day MSME payment rule under Section 43B(h) of the Income Tax Act signifies a pivotal moment for the Micro, Small, and Medium Enterprises (MSME) sector.

    Non-compliance with the payment deadlines outlined in the 45-day MSME payment rule carries significant repercussions for businesses. Failure to comply with the timeline means corporations will be required to pay tax on the amount due.

    Failure to adhere to the specified timelines results in the loss of tax deductions for the delayed payment amount and taxation of the outstanding sum as income. This not only increases the tax liabilities of non-compliant businesses but also undermines the financial stability of MSMEs, reinforcing the importance of timely payments in sustaining healthy business relationships.

    Impact on Micro and Small Enterprises(MSEs)

    Businesses operate through relationships with their suppliers and customers that get them the credit window. Most of the business to business (B2B) businesses manage their cash through rotation. They desire a maximum credit window with their supplier and a minimum credit period with their customers. While the ideal is a Cash & Carry deal, the businesses fall into the credit trap, and from a 7-15-30 days window of credit period, they end up in 60 days, or 90-day bucket and beyond. This hampers their purchase and sales cycle, profit margins and eventually the bottom line. The impact is high in highly competitive businesses and relatively less in monopolistic businesses, said Preeti Ubale, Co-Founder and Head Operations at SMBXL.

    Hyderabad-based SMBXL (Small and Medium Business Excellence) is a software-as-a-service (SaaS) startup that provides technology and digital support to MSMEs.

    The technology firm allows MSMEs to augment their business models and expand to newer markets and geographies and offers a range of customized business services to its customers through its technology platform – MarketCentral.

    This rule has a direct impact on the cash flow of MSEs. Timely payments ensure that MSEs receive the funds they need to sustain their operations, pay their employees, and invest in their growth. By enforcing timely payments, governments aim to address the cash flow challenges faced by the SME sector and ensure their financial stability.

    With this rule, the government is trying to ensure better cash flow for MSMEs who perennially struggle with delayed payments from larger customers which makes their cash flow positions difficult even as they struggle to win orders, execute projects, and manage their business, often with very thin profit margins. This is also intended to induce larger companies to demonstrate better fiscal and cash flow management responsibility. While the intent of the rule is beneficial to MSMEs and the broader ecosystem, its implementation may face challenges, said Srivatsan Sridhar, Founder and CEO, of Skydo, a cross-border payments platform. 

    Bangalore-based Skydo is a fintech platform to streamline cross-border online transactions for small businesses.

    Moreover, the 45-day payment rule enhances the credibility and trustworthiness of MSEs. Establishing a standard payment timeline, reduces the risk of non-payment or delayed payment, providing MSEs with greater confidence in conducting business transactions.

    This increased trust can lead to stronger relationships with suppliers, customers, and other stakeholders, ultimately benefiting the growth and sustainability of MSMEs.

    Micro, small, and medium enterprises (MSMEs) are often recognized as the backbone of the Indian economy. Contributing to nearly 27 percent of the country’s GDP, 42.67 percent of total exports, and 36 percent of India’s manufacturing output, MSMEs serve as drivers for employment creation, export growth, and the development of the credit market within the nation.

    Furthermore, MSMEs play a crucial role in alleviating regional disparities by serving as significant employers in rural and less developed areas of the country.

    PAYMENTS TO MSMEs WITHIN 45 DAYS | SECTION 43B(h) | FINANCE ACT | INCOME TAX LAW | 2024 |

    Benefits for MSMEs

    The implementation of the 45-day MSME payment rule heralds a new era of opportunity for small businesses in India. With access to timely funds, MSMEs can invest in growth initiatives, expand their market presence, and create employment opportunities. Ultimately, the empowerment of MSMEs fuels economic growth and fosters a more inclusive business ecosystem in India.

    “In sectors with long supply chains and lead times, especially those in manufacturing and exporting sectors, adhering to a 45-day payment window may significantly impact companies’ working capital. Presently, domestic payment terms typically are 90 days, while international cycles can stretch to over 150 days. The logistics involved in international shipping often result in extended transit times, with goods taking weeks to reach their destination. Additionally, overseas customers often force suppliers to store inventory nearby, inwarding parts into their company only on demand – the payment of this further delay due date recognition,” Sridhar said.

    The Ministry of Micro, Small, and Medium Enterprises (MSME) has introduced the MSME Samadhaan Portal, aiming to simplify the process of filing applications under the Micro and Small Enterprises Facilitation Council (MSEFC).

    This initiative enables MSE suppliers to submit online applications against buyers of goods/services directly to their respective State/UT MSEFC. The submissions are accessible to the MSEFC Council for necessary actions and are also visible to relevant Central Ministries, Departments, Central Public Sector Enterprises (CPSEs), State Governments, and other stakeholders for proactive interventions.

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    Challenges for Big Businesses

    “While there is some apprehension among MSEs that larger corporations could end up cold-shouldering them due to the new 45-day rule, the overall impact of the 45-day payment rule could result in a lot of positives for the MSEs. A larger corporation that pays on time can become a reliable and trustworthy partner to MSEs, leading to long-term collaborations and more disciplined transactions. Timely payments will also strengthen the MSME’s financial health, which means that they will be in a better space to negotiate with larger corporations. Better negotiations lead to faster dispute settlements, less legal hassles, and encourage more streamlined business practices,” said Ubale, co-founder of SMBXL.

    On its platform, SMBXL has over 64,000 customers, from over 900 towns and cities. These customers include traders, manufacturers, and distributors, across a wide spectrum of industries, including machine tools, retail stores, FMCG, textiles, electronics, leather goods, and catering companies.

    Logistical complexities in tracking invoices, contractual disputes over payment terms, and the need for robust internal systems pose significant hurdles to timely payment compliance.

    Logistical Complexities: Tracking invoices and ensuring timely payments can be challenging, especially for large corporations dealing with a high volume of transactions. Manual processes may lead to errors, delays, and difficulties in keeping track of payment deadlines.

    Contractual Disputes: Disputes over payment terms and conditions can arise between MSMEs and large corporations, further complicating the payment process. These disputes may result from ambiguities in contracts, differing interpretations of terms, or disagreements over delivered goods/services.

    Robust Internal Systems: Large corporations often have complex internal systems and processes that may not be optimized for prompt payment compliance. Implementing changes to these systems to accommodate the 45-day MSME payment rule may require significant investment in technology, training, and restructuring.

    “The introduction of a 45-day payment rule may end up creating a few unintended challenges for MSMEs – large companies renegotiating contracts with their suppliers, forcing MSMEs to accept lower margins or absorb additional costs of complying with the rule, replacing existing suppliers with new ones, re-defining the payment event in myriad ways to circumvent the 45-day rule, and so on. There are also multiple question marks on the enforceability of this rule. The Trade receivables electronics discounting system (TReDS) launched by RBI recently might come in as a savior for MSMEs – this enables them to get competitive discounting rates to receive their invoice payments quickly, and this new 45-day payment rule might help this scheme see widespread adoption,” Sridhar commented.

    Proactive Measures Required

    Businesses need to take proactive measures to address these challenges effectively:

    • Process Optimization: Streamlining invoicing, payment approval, and reconciliation processes can improve efficiency and reduce the likelihood of delays.
    • Technology Adoption: Implementing automated invoicing and payment systems can help minimize errors, enhance transparency, and expedite payment processing.
    • Enhanced Communication Channels: Establishing clear communication channels between MSMEs and large corporations is essential for resolving disputes, clarifying payment terms, and ensuring mutual understanding.
    • Impact on Cash Flow: Delays in receiving payments from large corporations can have a significant impact on the cash flow of MSEs. According to a study by the Small Industries Development Bank of India (SIDBI), delayed payments are a major concern for MSMEs, affecting their ability to meet operational expenses and invest in growth opportunities.
    • Compliance Costs: Ensuring compliance with the 45-day MSME payment rule may incur additional costs for large corporations, including investments in technology, staff training, and legal consultations to review and update contracts.
    • Legal Ramifications: Failure to comply with the 45-day MSME payment rule can result in legal consequences, including penalties and reputational damage for non-compliant businesses. Large corporations need to prioritize compliance to avoid these risks.

    Exemptions and Exceptions

    While the 45-day MSME payment rule applies broadly to transactions between MSEs and large corporations, certain exemptions and exceptions exist. Traders, suppliers not registered under the Udyam portal, and medium-sized enterprises are exempt from the rule’s purview. Additionally, opening balances as of April 1, 2023, are excluded from its scope, providing businesses with clarity on its applicability and implementation.

    Classification Micro Small Medium
    Manufacturing Enterprises and Enterprises rendering services Investment in plant and machinery or equipment: Not
    more than Rs. 1 crore and Annual Turnover: not more than Rs. 5 crore    		 Investment in plant and machinery or equipment: Not
    more than Rs. 10 crore and Annual Turnover: not more than Rs. 50 crore    		 Investment in plant and machinery or equipment: Not
    more than Rs. 50 crore and Annual Turnover not more than Rs. 250 crore

    This table provides the classification of Micro, Small, and Medium Enterprises (MSMEs) applicable from 1st July 2020, based on composite criteria of investment in plant and machinery/equipment and annual turnover.

    Preparing for Compliance

    To ensure compliance with the 45-day MSME payment rule, businesses must proactively review outstanding dues to MSEs and prioritize timely payments within the specified deadlines.

    • Review and Prioritize Payments: Regularly review outstanding dues to MSMEs and prioritize timely payments within the 45-day window.
    • Update Accounting Systems: Implement system updates to track invoices and payment deadlines efficiently.
    • Revise Contracts: Ensure contracts align with the 45-day payment terms, clarifying invoicing and penalty provisions if necessary.
    • Emphasize Prompt Payments: Cultivate a culture of prompt payments within the organization through awareness, training, and accountability measures.
    • Utilize Technology Solutions: Leverage digital payment platforms and automated invoice tracking systems to streamline payment processes.
    • Integrate with Supply Chain Management: Integrate payment processes with supply chain management systems to prioritize MSME payments.
    • Monitor and Report Compliance: Establish monitoring mechanisms to track compliance, address gaps, and demonstrate commitment to timely payments.

    Conclusion

    MSMEs play a crucial role in the economy by contributing to job creation, fostering innovation, and promoting sustainability. Their agility, adaptability, and ability to foster local entrepreneurship make them key drivers of economic growth and competitiveness.

    However, MSMEs face numerous challenges that hinder their growth and sustainability, including limited access to finance, markets, and skilled talent. Governments have implemented various initiatives to support MSMEs, including financial incentives, access to markets, and legal frameworks.

    By providing the necessary support, resources, and opportunities, one can create an inclusive and competitive business environment that fosters the growth and success of MSMEs, ultimately leading to sustainable economic growth for all.

    The new rule is expected to increase the confidence of MSEs to invest more in their
    businesses, said Ubale. “MSEs are also expected to focus more on innovation and productivity. Delayed payments cause financial burdens. MSEs may spend time and effort on developing new products, services, or processes. This is a boon to competition in the market. Consistent cash flows lead to stability that promotes further expansion, whether in new markets, via increasing production, or diversifying their product offerings. Improved creditworthiness also increases credit access for MSEs, and supplies them with working capital.”

    The 45-day MSME payment rule represents a transformative step towards bolstering the financial resilience and operational efficiency of small businesses. By navigating the challenges and leveraging the opportunities presented by this regulation, businesses can contribute to a more inclusive and sustainable business ecosystem, driving economic prosperity across India.

    FAQs

    What is the 45-day MSME payment rule?

    The 45-day MSME payment rule is a regulation in India that mandates large companies to clear payments to Micro and Small Enterprises within 45 days of receiving goods or services, or within 15 days if there is no written agreement.

    Why was the 45-day MSME payment rule implemented?

    The rule was implemented to address the challenges faced by MSMEs due to delayed payments from large corporations. Timely payments help MSMEs maintain financial stability and operational efficiency, contributing to India’s economic growth.

    What are the consequences of non-compliance with the 45-day MSME payment rule?

    Non-compliance with the payment deadlines outlined in the rule can result in tax implications for businesses. Corporations failing to adhere to the timelines may be required to pay tax on the outstanding amount, leading to increased tax liabilities and potential financial instability for MSMEs.

  • A Look at Berkshire Hathaway’s Marketing Strategy

    Berkshire Hathaway Inc. is a highly diversified American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States. The company has a rich history, dating back to 1839 when it was established as a textile manufacturer. However, under the visionary leadership of Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger, the company underwent a massive transformation into a conglomerate in 1965.

    Today, Berkshire Hathaway’s business portfolio spans many industries, including insurance, energy, rail transportation, retail, manufacturing, and services. However, insurance remains the company’s core business and primary source of capital. Berkshire Hathaway’s insurance arm operates under several brands, including GEICO, General Re, Berkshire Hathaway Primary Group, and National Indemnity Company.

    One of the critical reasons for Berkshire Hathaway’s success is its unique business strategy. The company invests the float (the retained premiums) from its insurance business in a broad portfolio of subsidiaries, equity positions, and other securities. This approach has enabled the company to generate significant returns over the years and create enormous shareholder value.

    Berkshire Hathaway is well-known for its intelligent investments and varied portfolio. However, its marketing strategy is equally impressive but often overlooked. This article explores the details of Berkshire Hathaway’s marketing approach, highlighting the timeless principles that have led to its long-lasting success.

    Berkshire Hathaway – Target Audience
    Berkshire Hathaway – Marketing Mix
    Berkshire Hathaway – Marketing Strategies

    Berkshire Hathaway – Target Audience

    Berkshire Hathaway, led by Warren Buffett, is known for its conservative investment approach, focusing on companies with solid fundamentals and sustainable competitive advantages. As such, its target audience typically includes individuals and entities looking for reliable and consistent returns over the long term rather than those seeking high-risk, high-reward opportunities.

    Berkshire Hathaway – Marketing Mix

    Product

    Berkshire Hathaway is a multinational conglomerate holding company headquartered in Nebraska, USA. The company owns and operates a diverse range of subsidiaries and affiliates across various industries, including insurance, finance, manufacturing, retail, energy, and utilities. Some of its most well-known subsidiaries include GEICO, Fruit of the Loom, Dairy Queen, and Duracell. GEICO is one of the largest insurance companies in the US, offering auto, home, and other types of insurance to millions of customers. Fruit of the Loom is a leading producer of clothing, including underwear, t-shirts, and socks. Dairy Queen is a popular fast-food chain serving frozen treats, burgers, and other items. In addition to these, Berkshire Hathaway also has interests in companies involved in railroad transportation, aerospace, real estate, and many other sectors.

    Price

    Berkshire Hathaway, a conglomerate known for its success and wide-ranging business operations, employs a competitive pricing strategy that is shaped by various factors such as the market trends and the nature of the product. Among its subsidiaries, GEICO, a prominent insurance company, uses a pricing approach that offers low prices to attract and retain a large customer base, thereby increasing its market share. This pricing strategy has contributed significantly to GEICO’s growth and success in the competitive insurance market. The adoption of such a pricing approach highlights the importance of market analysis and product differentiation in establishing a competitive edge in the business world.

    Total Revenue of Berkshire Hathaway from 2013 to 2023
    Total Revenue of Berkshire Hathaway from 2013 to 2023

    Place

    Berkshire Hathaway is a company that offers a wide range of products and services, including insurance, finance, and investment. The company distributes these products through an extensive network of subsidiaries that are spread across the United States. This network enables the company to reach a large customer base and cater to their needs effectively. The company’s primary focus is on serving the US market, especially in the insurance sector, where it has established a strong presence and reputation for providing high-quality services. Berkshire Hathaway’s commitment to excellence and customer satisfaction is evident in the way it conducts its business, and it continues to be a trusted name in the industry.

    Promotion

    Berkshire Hathaway, one of the largest conglomerates in the world, utilizes a diverse range of promotional channels to reach its target audience. The company leverages social media platforms like Facebook, Twitter, and LinkedIn to engage with its customers and promote its products and services. In addition to social media, Berkshire Hathaway also invests in TV commercials to increase brand awareness and reach a wider audience. Furthermore, the company is committed to Corporate Social Responsibility initiatives and actively engages in philanthropic efforts to give back to the community. By utilizing these various promotional channels, Berkshire Hathaway is able to effectively communicate its brand message and promote its products to a diverse group of consumers.

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    Berkshire Hathaway – Marketing Strategies

    Branding Strategy

    Berkshire Hathaway is a well-known conglomerate that has established an impressive portfolio of diverse subsidiaries that includes brands such as GEICO, Dairy Queen, and See’s Candies. The company’s unique approach to business involves allowing each subsidiary to maintain its distinct identity while benefiting from the overall reputation and resources of Berkshire Hathaway. This strategy has allowed the conglomerate to leverage its brand recognition, enhance its market position, and reinforce its reputation as a trusted and reliable entity.

    One of the key components of Berkshire Hathaway’s branding strategy is consistency and stability. The company has been able to maintain a consistent logo and visual identity over the years, which has contributed to its brand recognition and a sense of reliability among its stakeholders. With a focus on long-term value creation and financial success, Berkshire Hathaway has further reinforced its reputation for stability and consistency, making it one of the most respected and admired companies in the world.

    Advertising Strategy

    Berkshire Hathaway has adopted an unconventional approach to advertising that sets it apart from other companies in the industry. Rather than directly promoting the Berkshire Hathaway brand, the company prefers to allow its subsidiaries to drive their own advertising initiatives. This strategy ensures that each brand within the conglomerate receives targeted exposure, while still maintaining a cohesive brand strategy at the conglomerate level.

    Moreover, Berkshire Hathaway’s limited direct advertising reflects Warren Buffett’s philosophy of allocating capital wisely and avoiding unnecessary expenses. This approach has proven to be highly successful for the company, which has relied on the reputation and success of its subsidiary brands to generate brand awareness and customer loyalty. By leveraging the individual strengths and unique identities of its subsidiaries, Berkshire Hathaway has been able to create a diverse portfolio of brands that cater to a wide range of customers and industries. This has helped the company to establish a strong and enduring presence in the market, and to maintain its position as one of the most respected and admired companies in the world.

    Social Media Strategy

    Warren Buffett is a renowned personality in the world of finance and investment, and his influence extends to social media platforms such as Twitter and LinkedIn. As the face of Berkshire Hathaway, Buffett’s insightful commentary on investment and business matters attracts a large following, providing a platform to share Berkshire Hathaway’s philosophy and garner attention for the conglomerate.

    Berkshire Hathaway is a holding company that owns several well-known subsidiaries, including GEICO and Dairy Queen. The conglomerate encourages its subsidiary brands to maintain active social media profiles to engage with customers and promote their offerings. These subsidiaries have successfully utilised social media platforms to build brand loyalty, share promotions, and interact with customers. For instance, GEICO’s social media presence is known for its humorous and engaging content, which has helped the brand to connect with its audience and create a strong customer base.

    GEICO's Humorous Commercials
    GEICO’s Humorous Commercials

    Investment Philosophy as Marketing

    Berkshire Hathaway is known for its unique marketing strategy that sets it apart from other companies. The company utilizes its investment philosophy as a way to market its brand. The annual letters to shareholders written by Warren Buffett, the CEO of Berkshire Hathaway, are a prime example of this strategy. Not only do these letters serve as a report on the company’s performance, but they also act as educational tools that reinforce the investment principles of the company.

    Buffett openly shares his insights and rationale behind investment decisions, giving shareholders a glimpse into how the company operates. This practice helps to engage and cultivate a sense of loyalty and confidence among shareholders. By providing a transparent insight into its investment strategy, Berkshire Hathaway is able to foster a deeper connection with its shareholders, which is an essential aspect of its marketing strategy.

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    Selective Acquisition Strategy

    Berkshire Hathaway has established a highly selective acquisition strategy as a cornerstone of its marketing approach. Rather than pursuing growth for expansion, the company focuses on acquiring businesses with solid fundamentals and sustainable competitive advantages that align with its long-term goals. This deliberate approach enables Berkshire Hathaway to carefully assess each potential acquisition, evaluating its financial performance, market position, management team, and growth prospects.

    By prioritizing quality over quantity in its acquisition strategy, Berkshire Hathaway is able to enhance its portfolio with companies that have a proven track record of success, while also communicating a message of stability and reliability to investors and stakeholders. This approach has helped the company build a reputation as a smart, strategic investor that prioritizes long-term value creation over short-term gains.

    Corporate Social Responsibility (CSR) Initiatives

    Berkshire Hathaway is a company that is primarily focused on generating returns for its shareholders. However, the company also recognises the importance of corporate social responsibility (CSR) and has taken various measures to contribute towards it. The company has always been committed to supporting philanthropic causes through its subsidiaries and charitable foundations. They have been involved in initiatives related to education, healthcare, environmental conservation, and various other social causes.

    By participating in these CSR initiatives, Berkshire Hathaway contributes to the betterment of society and enhances its reputation as a responsible corporate citizen. This approach appeals to socially conscious investors and stakeholders, who are increasingly looking for companies that prioritize CSR. The company’s CSR initiatives have enabled it to build a positive image and a strong relationship with the community, which is essential for long-term business success.

    FAQs

    What is Berkshire Hathaway’s marketing strategy?

    Berkshire Hathaway’s marketing strategy is unconventional. Instead of directly promoting itself, it focuses on:

    • Acquiring established businesses with strong reputations.
    • Allowing subsidiaries to operate autonomously and leverage their own brand recognition.

    How does Berkshire Hathaway market its subsidiaries?

    It allows subsidiaries to operate autonomously with minimal interference, relying on Berkshire Hathaway generally allows its subsidiaries to handle their own marketing with minimal interference.

    For example, GEICO is known for its humorous commercials, while Dairy Queen focuses on social media promotions.

    What are the key components of Berkshire Hathaway’s marketing philosophy?

    Several key components define Berkshire Hathaway’s marketing philosophy:

    •  The company prioritizes long-term value creation over short-term gains.
    •  Berkshire Hathaway cultivates a reputation for stability, reliability, and smart investment.

  • Plant-Based Protein Gaining Traction in India

    Vegetarian and vegan alternatives have increased in Indian restaurants since the new year started. The recent introduction of vegan burger patties and nuggets by ITC demonstrates the growth of this sector. Various forms of food production may now give greater consideration to vegan options. As per the analysis by CNBC, the plant-based protein market in India was valued at 11,250 metric tonnes in 2020, and it is projected to increase at a CAGR of 12.4% from 2021 to 2024. Based on these results, it’s possible that vegan protein, mostly in the form of supplements, could account for about 16,000 metric tonnes consumed by Indians in the following year. Things appear to be going swimmingly on the surface, but there are still major roadblocks that must be cleared immediately.

    Everyone should make sure to consume protein on a regular basis. For example, 46 grams of protein are needed by an adult female. On a daily basis, men typically consume around 56 grammes. This amount of protein is usually more than enough for vegans, though bodybuilders may have greater demands. This is when vegan protein powder comes in handy. All of these changes point to the fact that the Indian market is quite receptive to dietary supplements made from plants. The first is that vegetarians and vegans will find heaven in India as a result of these developments, and the second is that demand for vegetarian and vegan products has skyrocketed since the outbreak.

    “The Nutra Industry in India is at $11 billion in 2023,” said Shivam Hingorani, Founder of Ace Blend, when asked to elaborate on the present situation of the plant-based protein market. As a subset of this, the 9–10% plant-based supplement sector in India is ripe for revolution and expansion. More conscientious and integrative methods for supplementing seem to be the current trend. To be clear, I’m not saying that the primary goal of Ace Blend’s ecosystem of products—which consists mostly of plant-based supplements—is to athletically adhere to the vegan trend. Rather, it’s about providing cleaner products that are useful in the long run, derived from nature, supplied responsibly, and follow a completely transparent supply chain.

    People are more health conscious now than they were before the outbreak, which is a big reason for the increase. People from all walks of life and income levels understand what ‘immunity’ means now that the term has entered the vernacular. Nowadays, people are looking for solutions that are clean, sustainable, and packed with nutrients. Modern superfoods and supplements are necessary for nutrient absorption regardless of meal planning. Everything boils down to how ‘effective’ the supplement you pick is.

    “I see a bright future for the plant-based supplement market in India,” Yash P Kotak, Co-founder and Chief Marketing Officer of BOHECO, said, continuing along these lines. We will see enormous expansion when health and sustainability become more people’s top priorities. Our top priorities are providing eco-friendly, high-quality solutions and spreading the word about plant-based diets. We are hopeful about the industry’s potential influence in India, and we believe that overcoming pricing discrepancies is vital for widespread adoption.

    Pandemic Drives Surge in Plant-Based Protein Market
    Considering the Cost as a Barrier to Expansion
    Additional Issues That Need Off-Tastes to be Resolved Promptly
    Fitness Enthusiasts Removing Real Meat from Their Platter

    Top 7 Sources of Plant Protein

    Pandemic Drives Surge in Plant-Based Protein Market

    The COVID-19 pandemic threw the entire planet for a loop, changing everyone’s lives as they knew them. Many businesses went out of business, and others started working remotely, which caused a major change in the way things were done. But it did set the stage for the finding of things and systems that weren’t there before. Similarly, once people discovered the benefits of plant-based proteins, their demand for them soared. For instance, gym rats are shifting away from protein powders made of milk and beef due to the nutritional benefits of plant-based alternatives.

    “Indeed, the pandemic has highlighted the significance of health and wellbeing,” Kotak said. Because of this, people are taking a second look at their eating habits and other aspects of their lifestyle. People are looking for ways to improve their immune systems and overall health, and plant-based supplements have become popular due to their potential health benefits. This fad has only entered the Indian market, but it has already gone global.

    Supplement selection has grown more complex since the epidemic has highlighted the importance of health, as Hingorani put it. But now that we’ve partnered with one of the biggest and most important natural food extract companies in India, Ace Blend can provide more people with the best, most distinctive supplements.

    Considering the Cost as a Barrier to Expansion

    Despite rising interest, the market for plant-based protein sources is still tiny in comparison to animal-based protein sources (meat and supplements). Fipola maintains that plant-based meat accounts for a negligible percentage of total sales despite the fact that it has been available on the website for more than two years.

    Several variables influence the cost of plant-based supplements, including the cost of sourcing high-quality plant-based ingredients and the cost of supplement manufacturing. In light of the increasing demand for these supplements, it may become necessary to prioritise quality and ethical sources, which could impact the price. Companies like ours are always exploring new, cost-effective and efficient ways to increase the availability of plant-based supplements. To simplify price without compromising quality, we are working hard on solutions, but it’s a complex problem, according to Kotak.

    The rule of trade is that as adoption increases, prices decrease. This is the explanation behind this. Anything that is low in sugar and high in “Active Natural Ingredients” sounds pricey since the nutrition market has been dominated by sugar and chemically produced ingredients for a long time. The desire for improved items is growing solely due to people’s wants. According to Hingorani, the company is “working to fuel that awareness” and “growing the demand for higher quality supplements,” which will lead to a rise in demand and, eventually, a decrease in price.

    Plant Protein Market Value Worldwide
    Plant Protein Market Value Worldwide

    Additional Issues That Need Off-Tastes to be Resolved Promptly

    Creating awareness about the benefits of plant-based supplements, assuring consistent quality and purity, and managing the developing regulatory framework are some important obstacles in the field, aside from pricing. It is still very important to inform people about the health benefits and environmental benefits of plant-based supplements. There are also persistent attempts to improve the product’s efficacy and flavour through research and development. Addressing these difficulties jointly with regulatory and industry cooperation is vital as the sector continues to grow.

    Gaining widespread awareness is the main obstacle. Big food and supplement companies often sign famous people, and we just don’t have the budget to compete with their advertising budgets. However, we view this as an authentic challenge that motivates us to work harder each day. “To address this, we are implementing more creative strategies to connect with our audience,” Hingorani stated. Using plant-based proteins instead of animal-based ones isn’t a panacea. The plant proteins ought to satisfy the customers’ expectations in terms of taste, consistency, and presentation.

    Plants are an excellent source of protein. These compounds, which are naturally occurring and are by-products of other foods, can easily provide sustenance for everyone on Earth. Plant proteins can help with a variety of health issues, including building muscle, improving digestion, and managing weight optimally.
    Despite these advantages, plant protein makers are finding it harder to meet consumer demand. People are searching for meat substitutes made of plants that are just as nutritious, if not healthier, and look and taste just like the real thing. Customer satisfaction is thus the biggest challenge for plant protein manufacturers. They are not insurmountable, though, if we are aware of every answer that has ever been proposed in the scientific community.

    Why can proteins display such a diverse array of properties? The solution lies in processing and synthesis methods. When cooking with plant proteins, we typically don’t give much thought to their off-tastes or reduced solubility. If there are any other inconsistencies, they can all be attributed to these procedures. How can we address this issue? Finding the offending steps in production will allow us to bring back authentic tastes and textures. The best methods to mimic the characteristics of animal proteins include enhancing processes and eliminating activities that could lead to degradation. “Does that mean we need state-of-the-art tools and techniques?” Das asked.

    “Oh no! Using the same tried-and-true methods with upgraded components, we can make plant-based protein. While it is possible to verify all health-related metrics and meet consumer expectations, the procedure can be fine-tuned to produce plant proteins with fewer deviations. In the past, there have been multiple instances where consumers who were looking to transition to vegan protein sources discovered that plant protein mimicked the texture and flavour of meat,” he elaborated.

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    Fitness Enthusiasts Removing Real Meat from Their Platter

    Health club attendees are increasingly drawn to plant-based supplements due to their natural and eco-friendly nature. However, one’s training goals and dietary habits determine its value as a substitute for typical gym supplements. Compared to animal-based protein supplements, plant-based ones are gentler on the digestive system and less prone to bloating and gas. The essential minerals, high-quality protein, and other nutrients in these supplements are great for your overall health and for repairing damaged muscles. However, each person’s specific circumstances and objectives should be considered when deciding between conventional and plant-based supplements.

    The kind of folks who are always looking for new ways to better their health tend to be the ones who go to the gym on a regular basis. There are no standard blends available for proteins from Ace Blend. Nutritional PhDs carefully choose each of our proteins according to each customer’s unique tastes and dietary requirements. This is for the typical person of any age who wishes to enhance their overall health on a daily basis. The Daily blend is composed of eleven carefully chosen superfoods, including twenty grams of A-grade protein, green extracts, antioxidants, fibres, and probiotics extreme for progressive muscle growth and rapid recovery. According to Hingorani, this combination is ideal for athletes since it contains 30 grammes of high-quality protein, 6 grams of naturally occurring BCAAs, fruit enzymes to ensure complete absorption, fibres, and probiotics. It also helps to reduce inflammation.

    According to Kotak, the company’s top-selling products for health-conscious individuals are hemp hearts and Himalayan hemp protein powder. Because of their high dietary fibre content and remarkable protein concentration of 37%, HEMP PROTEIN POWDER is in great demand among health and fitness enthusiasts. Customers also love the HEMP HEARTS because of how versatile they are and how many nutrients they contain. There will be a sea change in India when we introduce our revolutionary hemp protein isolates and concentrates. We acquire these items from Uttarakhand, where we prioritise farmer education projects, and they are known for their natural and wholesome properties. As a result, they have achieved tremendous popularity. Hemp is an environmentally benign and drought-tolerant crop, and these projects give farmers the tools they need to grow it using native seeds and sustainable farming methods. This is in line with our mission to provide high-quality, health-conscious products while also supporting local communities and advocating for sustainable, ethical farming practices.

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    FAQs

    Popular options include hemp protein powder, pea protein, and brown rice protein. Companies are also offering blends with other superfoods for added health benefits.

    Why is the plant-based protein market growing in India?

    The market is driven by increased health consciousness, interest in sustainable food sources, and the growing vegan and vegetarian population.

    What are the biggest challenges facing the plant-based protein market?

    Cost remains a significant hurdle, as plant-based supplements are often pricier than animal-based ones. Additionally, taste and texture can be inconsistent, and creating consumer awareness about the benefits is crucial.

  • Story of India’s Toy Industry: On the Verge of Massive Expansion

    The toy industry is one of the most promising export markets because of its high growth potential. Forecasts indicate that the Indian toy market will reach $3 billion by 2028, expanding at a CAGR of 12% from 2022 to 2028, as per the data shared by Invest India. This places it among the world’s fastest-growing industries.

    The toy sector in India is growing its international footprint by sending more expensive toys to countries in Africa and the Middle East. A rise from 60% to 70% was enacted in Budget 2023 regarding the import tariff on toys. In 2021, the Toys Quality Control Order (QCO) was put into effect to guarantee the safety of imported and manufactured toys by increasing their standardization.

    Success Story of Made in India Toys
    Revolutionary Sparks

    Success Story of Made in India Toys

    With a 52% drop in imports, a 239% increase in exports, and an improvement in the overall quality of the toys offered in the domestic market, the Indian toy sector saw tremendous growth in FY 2022-23 compared to FY 2014-15. The Indian Institute of Management (IIM) Lucknow, in collaboration with the Department for Promotion of Industry and Internal Trade (DPIIT), has undertaken a case study on the “Success Story of Made in India Toys” that takes these points into account.

    The government’s initiatives have improved the production environment for the Indian toy business, according to the research. The report emphasized that between 2014 and 2020, a total of six years of hard work, doubled the number of manufacturing units, cut reliance on imported inputs from 33 percent to 12 percent, increased gross sales value by 10 percent CAGR, and improved worker productivity.

    The survey found that zero-duty market access for locally manufactured toys in countries like Australia and the United Arab Emirates, as well as India’s integration into the global toy value chain, are contributing factors to the country’s rise to the position of the top exporter. According to the report, if India wants to make a name for itself in the toy industry and compete with China and Vietnam, it needs the government and the toy industry to work together on several fronts, including technological advancements, eCommerce, partnerships, exports, brand-building, communicating with parents and teachers, cultural diversity, collaboration with local artisans, etc.

    The goal of Prime Minister Narendra Modi’s “Mann ki Baat” speech in August 2020 was to make India a major player in the toy industry. Government efforts to realise the vision include, among other things, the creation of comprehensive plans like the National Action Plan for Toys (NAPT) to encourage plaything design, plaything use as a teaching tool, plaything quality control, indigenous plaything clusters, etc.

    Total Revenue of the Global Toy Market From 2019 to 2022
    Total Revenue of the Global Toy Market From 2019 to 2022

    Revolutionary Sparks

    This turnaround was greatly influenced by the ‘Make in India‘ project, which was spearheaded by the Indian government and aimed at strengthening domestic manufacturing skills. The toy industry reaped considerable benefits from this movement’s goal of revitalizing the nation’s industrial sector. As a safeguard against the flood of imported toys, local makers were given a boost by the implementation of higher customs taxes, which were increased from 20% to 60% in 2020 and then to 70% in 2023.

    The noose around low-quality imports was further tightened by non-tariff measures, such as strict quality control standards and required testing for import shipments. The government’s dedication to improving the quality and safety standards of toys, both imported and domestically produced, was highlighted in 2021 with the adoption of the Quality Control Order (QCO) for toys.

    In addition to regulatory measures, the government also took aggressive steps to encourage innovation and self-sufficiency in the industry. Promoting indigenous toys, encouraging startups, and showcasing Indian craftsmanship on global platforms have been made possible through programs like the National Action Plan for Toys (NAPT), the Toy Cluster under the Scheme of Funds for Regeneration of Traditional Industries (SFURTI), and the Indian Toy Fair 2021.

    As a result of India’s participation in the global toy value chain and the elimination of tariffs on toys made in India in countries like the United Arab Emirates and Australia, the toy industry in India has also flourished. The international toy expo in Germany recently saw orders worth crores of rupees for Indian toys from countries like the United States, the United Kingdom, South Africa, and Germany, among others.

    The incredible journey of endurance and strategic brilliance is exemplified by the evolution of the Indian toy sector into a global innovation hub. The sector has triumphed over import obstacles by embracing cultural diversity, innovation, and quality, with the help of the government and the dynamism of small and medium-sized enterprises (SMEs). Technology, sustainability, and worldwide competitiveness will play a pivotal role as it moves forward. This comeback is more than just a financial success; it is a tribute to India’s diverse cultural heritage and an indication of the country’s growing prominence in the international toy industry. It heralds a future in which play represents inclusivity, learning, and responsibility.

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  • Unlocking India’s Golden Potential: The Impact of RBI’s Gold Import Exemption

    The Indian government has taken a bold step towards boosting the country’s gold reserves. The Reserve Bank of India (RBI) has been granted the authority to import gold without the burden of customs duty and the Agriculture Infrastructure and Development Cess (AIDC).

    Traditionally revered in Indian culture as a symbol of wealth and prosperity, gold has received special attention from policymakers.

    This government’s decision, notified on March 12, marks a pivotal moment in the country’s economic landscape, with implications that extend far beyond the glittering precious metal. 

    Let’s delve into the intricacies of this exemption, its impact on the Indian economy, and the rationale behind this significant policy shift.

    Background
    Implications of the Exemption

    Impact on the Indian Economy

    Rationale Behind the Exemption
    Conclusion
    Future Implications

    Potential Challenges

    Background

    As the world’s second-largest consumer of gold, after China, India’s relationship with the metal is multifaceted, shaping not only personal adornment but also economic policies and trade dynamics.

    Gold imports in India have been subject to customs duty and the Agriculture Infrastructure and Development Cess (AIDC), acting as barriers to the seamless importation of this valuable resource. 

    At present, the import duty on gold, silver findings, and coins of precious metals is at 15%, comprising a Basic Custom Duty (BCD) of 10%, along with 5% for the Agriculture Infrastructure Development Cess (AIDC).

    Even the Reserve Bank of India (RBI), tasked with managing the nation’s foreign exchange reserves, was not exempt from these levies until the recent policy change.

    According to the latest reserve management report from the Reserve Bank of India, as of September 2023, the central bank possessed a total of 800.79 tonnes of gold, inclusive of gold deposits amounting to 39.89 tonnes. Out of this total, 388.06 tonnes were held in overseas locations, while 372.84 tonnes were held domestically.

    The decision to waive these charges for the RBI signifies a notable departure from past practices and signals a fundamental shift in India’s approach to gold imports.

    The exemption granted to the RBI not only strengthens the central bank’s position in managing foreign exchange reserves but also underscores the government’s commitment to enhancing financial stability. 

    RBI Governor Shaktikanta Das informed reporters during the customary post-policy review press conference on April 5 that the accumulation of gold reserves is a component of our reserve deployment strategy.

    “We are building up a gold reserve that is a part of our reserve deployment,” a media report quoted Das.

    With gold prices often rising during economic uncertainty, bolstering gold reserves can serve as a vital buffer against external shocks and contribute to the country’s sovereign wealth.

    By allowing the RBI to import gold without additional levies, the government is not only recognizing the central bank’s pivotal role in financial management but also sending a positive signal to the gold market in India. 

    This move aligns with global trends of central banks diversifying their reserves, positioning gold as a safe-haven asset in times of economic volatility. The policy shift reflects a broader strategy to promote reserve diversification, support the domestic gold market, and fortify India’s overall economic resilience in a rapidly changing world.

    “Equity markets have gained while bond yields and US dollar have remained volatile. The overall outlook is challenged by continuing geopolitical conflicts, disruptions in trade routes and high public debt burden,” RBI chief said in his statement after the monetary review.

    Implications of the Exemption

    The exemption granted holds significant implications for various aspects of the Indian economy. 

    Here are some key points to consider:

    Boost to Gold Reserves

    This decision allows the RBI to increase its gold reserves, strengthening the country’s overall foreign exchange holdings. According to the World Gold Council, India’s official gold reserves stood at 695.31 metric tons as of December 2023, representing 6.7% of total foreign reserves.

    Cost Advantage for the RBI

    Importing gold without levies provides a cost advantage to the RBI, enabling more strategic management of foreign exchange reserves. With gold prices fluctuating, this exemption allows the RBI to capitalize on favorable market conditions without the burden of additional costs.

    “In the Reserve Bank, we have embarked on strengthening and building up higher (forex) reserves. Our reserves are around USD 620 billion at the moment. Individual emerging market economies have to insulate and protect their economies from the spillovers of global currency movements and fluctuations,“ RBI head Shaktikanta Das has said. The RBI’s forex reserves rose to an all-time high of USD 645.6 billion as of March 29, 2024.

    Stability of the Gold Market

    The exemption can potentially stabilize the gold market in India, impacting market sentiment and prices due to the RBI’s significant gold purchases.

    According to data from the India Bullion and Jewellers Association (IBJA), gold price in India is around Rs 71,210 per 10 gm as of April 8. As per market analysts, the gold rate may range around Rs 75,000 per 10 gm in the coming weeks.

    “Gold prices have surged on safe-haven demand,” said the Monetary Policy Statement, 2024-25 Resolution of the Monetary Policy Committee (MPC) April 3 to 5, 2024.

    Gold prices are currently reaching near record-high levels in both domestic and international markets, largely due to increasing speculation that the US central bank could implement its first rate cut as soon as June.

    The impact of this exemption goes beyond the surface of gold importation. By reducing dependence on imports and promoting financial stability, the RBI’s increased flexibility in gold imports sets a new precedent for economic management. This move aligns with the government’s goal of enhancing sovereign wealth and fostering a more robust gold market in India.

    As per the World Gold Council: “Gold is an important component of central bank reserves because of its safety, liquidity and return characteristics – the three key investment objectives for central banks. As such, they are significant holders of gold, accounting for around a fifth of all the gold that has been mined throughout history.”

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    Impact on the Indian Economy

    The exemption granted to the RBI from paying customs duty and cess on gold imports has profound implications for the Indian economy.

    Reduced Dependence on Imports

    India heavily relies on gold imports, with cumulative imports surging by 38.76% reaching USD 44 billion from April to February in 2023-24, as per data from the Ministry of Commerce and Industry. Gold imports jumped substantially by 90.0 percent during October to February 2023-24 period, reflecting strong retail demand.

    “Gold prices rallied in Q4 of 2023-24 as financial markets priced in deeper policy rate cuts for 2024 as reflected in lower bond yields and a weaker US dollar. The hardening of gold prices continued in Q1:2024 to record high in March on growing expectations of interest rate cuts by the US Fed, coupled with demand by central banks and Chinese investors,” as per RBI’s monetary policy report released on Friday, April 5th.

    The exemption to RBI helps reduce the country’s dependence on external sources for gold supply, enhancing India’s self-sufficiency in the gold market.

    On March 28, the Reserve Bank of India authorized Indian Overseas Bank, Punjab National Bank, and Union Bank of India to exclusively import gold for the fiscal year 2024-25, effective from April 1st.

    RBI has also listed 11 other banks to import gold and silver both from April 1.

    Banks act as intermediaries in the importation process, assisting gems and jewelry makers in acquiring the necessary gold for their operations.

    Foreign Exchange Management

    The RBI plays a crucial role in managing India’s foreign exchange reserves. By importing gold without additional levies, the RBI can diversify its reserves and manage foreign exchange fluctuations more effectively. This strengthens the RBI’s ability to maintain a stable exchange rate and manage any external shocks.

    “The Indian rupee (INR) has remained largely range-bound as compared to both its emerging market peers and a few advanced economies during 2023-24. The INR was the most stable among major currencies during this period. As compared to the previous three years, the INR exhibited the lowest volatility in 2023-24. The relative stability of the INR reflects India’s sound macroeconomic fundamentals, financial stability and improvements in the external position,” RBI Governor Das said in a statement after the monetary policy review.

    On the external financing side, India’s foreign portfolio investment (FPI) flows saw a significant turnaround in 2023-24. Net FPI inflows stood at USD 41.6 billion during 2023-24, as against net outflows in the preceding two years (USD 14.1 billion in 2021-22 and USD 4.8 billion in 2022-23). “This is the second highest level of FPI inflow after 2014-15,” Das said in his statement.

    Enhancing Sovereign Wealth

    Accumulating gold reserves enhances the country’s sovereign wealth. As gold prices tend to rise in times of economic uncertainty, having substantial gold reserves can act as a buffer against external shocks and support the Indian economy in challenging times.

    “In January, the Reserve Bank of India made a significant addition to its gold reserves, acquiring 8.7 tonnes. This marks the most substantial purchase since July 2022, elevating the RBI’s total gold holdings to 812.3 tonnes—up from 803.58 tonnes in December 2023. Data from the World Gold Council confirms this increase. The strategy behind the central bank’s gold accumulation is to diversify its foreign exchange reserves and provide a buffer against foreign currency fluctuations, as noted by financial experts,” a senior manager at Kotak Mahindra Bank said.

    Gold Reserves of Largest Gold Holding Countries Worldwide as of 2nd Quarter 2023
    Gold Reserves of Largest Gold Holding Countries Worldwide as of 2nd Quarter 2023

    Rationale Behind the Exemption

    By acknowledging the RBI’s crucial responsibility in maintaining financial stability and diversifying foreign exchange reserves, the government aims to empower the RBI to effectively manage the economy’s monetary aspects.

    Granting this exemption to the RBI also serves as a positive signal to gold importers in India, showcasing the government’s commitment to facilitating gold imports and supporting the domestic gold market. This move is poised to attract more investors and stimulate economic activity within the gold sector, fostering growth opportunities and bolstering the overall economic landscape.

    Furthermore, the decision aligns with the global trend of central banks diversifying their reserves, with gold being recognized as a safe-haven asset. Allowing the RBI to import gold without levies not only promotes reserve diversification but also enhances the stability and strength of India’s foreign exchange holdings. This strategic move positions the country favorably in the international financial arena.

    Central banks around the world, including those of Russia, China, Turkey, Kazakhstan, and Poland, have been actively buying gold as part of their reserve management strategies. They view gold as a valuable asset for diversifying their holdings and enhancing financial stability.

    Unwavering demand from central banks has been supportive of gold demand again this year and helped offset weakness in other areas of the market, keeping 2023 demand well above the ten-year moving average. 

    “In addition to monetary policy, geopolitical uncertainty is often a key driver of gold demand, and in 2024 we expect this to have a pronounced impact on the market. Ongoing conflicts, trade tensions, and over 60 elections taking place around the world are likely to encourage investors to turn to gold for its proven track record as a haven asset.
    We know that central banks often cite gold’s performance in times of crisis as a reason to buy, which suggests demand from this sector will stay high this year and may help to offset a slowdown in consumer demand due to elevated gold prices and slowing economic growth,” Louise Street, Senior Markets Analyst at the World Gold Council, commented.

    In essence, the rationale behind this exemption underscores a multi-faceted approach aimed at promoting financial stability, fostering economic growth, and empowering the RBI in its pivotal role. By exempting the RBI from import levies on gold, the government paves the way for a more robust and resilient economy, reinforcing India’s position as a key player in the global financial landscape.

    India ranked as the second-largest gold importer globally following China, possesses approximately 14% of the world’s gold reserves, amounting to around 27,000 tonnes.

    Conclusion

    Embracing a Golden Future

    By leveraging gold as a strategic asset, India is poised to navigate economic uncertainties with greater resilience and fortitude.

    Fortifying Financial Resilience

    The exemption granted to the RBI signifies a pivotal step towards fortifying India’s financial resilience and sovereignty. As the RBI accumulates gold reserves free from additional levies, the country enhances its sovereign wealth and insulates itself against external shocks. With gold prices serving as a reliable hedge during turbulent times, India’s decision to exempt the RBI from import levies underscores a proactive approach to safeguarding the nation’s economic well-being.

    Paving the Path to Prosperity

    This exemption not only streamlines the gold import process but also signals a positive outlook for investors and industry stakeholders. As India embraces its rich cultural affinity for gold while embracing modern economic strategies, the future shines bright with possibilities for growth and prosperity.

    Shaping a Resilient Economic Landscape

    By empowering the central bank to diversify its reserves and strengthen its financial position, India is laying the groundwork for a more stable and robust economy. This strategic move aligns with global trends in reserve management and positions India as a forward-thinking player in the international arena.

    “All central banks are moving towards de-dollarization strategies.As rightly pointed out, this could be a big & bold move by the Govt.of Bharat towards stabilizing the Indian Rupee!,” said Building MyGold-‘Bharat ka pehla Gold Bank’ Founder & CEO Amol Bansal. MyGold is a distinct platform or an app that addresses various shortcomings commonly found in existing digital gold platforms. 

    The MyGold app offers users the flexibility to monetize physical gold lying in homes and bank lockers. With features like ‘Upload Gold’ for digitizing existing idle gold at home or in the bank, and ‘Sell Gold’ for converting gold into money, users can easily manage their gold assets with a simple appointment booking.

    Future Implications

    As the Reserve Bank begins to import gold without the burden of customs duty and cess, the future implications of this decision loom large on the horizon. The exemption granted to the RBI opens doors to a myriad of possibilities that could shape the Indian gold market in the years to come. 

    Here are some key future implications to consider:

    Diversification of Investment Portfolios

    With the RBI’s increased ability to import gold at a lower cost, there is a potential for a shift towards diversification in investment portfolios. According to the World Gold Council, central banks across the globe have been increasing their gold reserves, with purchases reaching 273.9 tonnes in the third quarter of 2023. One tonne of gold is equal to 1000 kg of gold.

    Technological Advancements

    The exemption granted to the RBI could pave the way for technological advancements in the gold market. Innovations in digital platforms, blockchain technology, and secure transactions may revolutionize the way gold is traded and stored, offering greater convenience and transparency to consumers.

    Global Market Influence

    The RBI’s enhanced capacity to import gold without levies could position India as a significant player in the global gold market. Increased gold reserves and strategic imports may impact international prices, fostering stronger ties with gold-producing nations and shaping India’s role in the global economic landscape.

    India primarily imports gold from countries such as Switzerland, the United Arab Emirates (UAE), South Africa, the United States, and Australia.

    Policy Reforms

    The government’s decision to allow the RBI to import gold without levies may spark broader policy reforms in the gold sector. Discussions on regulatory frameworks, trade agreements, and market interventions could take center stage, paving the way for a more dynamic and resilient gold market in India.

    The future implications of the RBI’s exemption from customs duty and cess on gold imports hold the promise of transforming the Indian gold market into a hub of innovation, investment diversification, and global influence. As stakeholders navigate these uncharted waters, the evolving landscape presents both opportunities and challenges that will shape the trajectory of the gold market in India and beyond.

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    Potential Challenges

    Navigating the realm of gold imports without paying customs duty and cess poses a set of potential challenges that must be carefully considered.

    One key concern is the impact on the domestic gold market dynamics. With the RBI’s increased ability to import gold at a reduced cost, there may be fluctuations in supply and demand, potentially leading to price volatility and market uncertainties. Balancing the need for a stable market with the benefits of reduced import levies will require a delicate equilibrium.

    Furthermore, the exemption granted to the RBI could also raise questions about fair competition within the gold industry. As the central bank gains a cost advantage in importing gold, there may be implications for other market participants, including gold traders, jewelers, and investors. Ensuring a level playing field and addressing any disparities that may arise from this exemption will be crucial to maintaining a healthy and transparent gold market ecosystem in India.

    Another challenge that may arise from allowing the RBI to import gold without levies is the potential impact on revenue generation for the government. Customs duty and cess on gold imports serve as significant sources of revenue, contributing to the country’s fiscal resources. The exemption could lead to a shortfall in revenue, prompting the government to explore alternative sources or adjust fiscal policies accordingly to mitigate any adverse effects.

    However, the revenue department is pretty happy with the revenue generated by gold imports this fiscal.

    “Gold imports have given us good revenue….In nine months this fiscal, gold imports are at 617 tonnes. So gold imports should exceed 800 tonnes at this rate,” Revenue Secretary Sanjay Malhotra had said in an interview to Moneycontrol in February.

    Moreover, managing the increased gold reserves accumulated by the RBI as a result of this exemption could present logistical challenges. Safeguarding and effectively utilizing these reserves to support financial stability and economic growth will require strategic planning and prudent decision-making. 

    Overall, while the decision to allow the RBI to import gold without paying import levies brings significant advantages, it also brings a set of challenges that need to be carefully addressed. By proactively addressing these challenges and implementing effective mechanisms to mitigate any potential drawbacks, India can harness the benefits of this policy change while safeguarding the integrity and stability of its gold market and economy.

    While the implications of this exemption are still unfolding, it is evident that this move will have a profound impact on various stakeholders, from consumers and investors to policymakers and experts.

    As India navigates through the complexities of this policy change, it is essential to closely monitor its effects on the economy and assess the long-term implications for the country’s financial well-being.

    FAQs

    What is the recent announcement regarding gold import by RBI?

    The Indian government has allowed the Reserve Bank of India (RBI) to import gold without having to pay customs duty and the Agriculture Infrastructure and Development Cess (AIDC).

    What are the implications of this exemption?

    This exemption has significant implications for the Indian economy, gold market, and financial stability. It opens up new opportunities for RBI to manage its gold reserves more efficiently.

    How will this exemption impact the Indian economy?

    The exemption is expected to have a positive impact on the Indian economy by potentially boosting the gold market, increasing financial stability, and enhancing RBI’s ability to manage its gold reserves effectively.

    What is the rationale behind this significant policy shift?

    The rationale behind this exemption is to streamline the process of gold import by RBI, enhance its operational efficiency, and align with the government’s efforts to promote economic growth and stability.

  • Unlocking Potential: Indian Furniture Market’s Multifold Growth Journey

    In 2024, the Indian furniture business is getting ready for a revolutionary ride to create the rooms of tomorrow so people can live better. The sector is poised for unprecedented expansion due to factors like changing consumer tastes, advancements in technology, and an increasing demand for new ideas. It is becoming increasingly clear that global manufacturers have a significant impact on the industry’s trajectory.

    In 2023, the size of the Indian furniture market reached $23.9 billion. The forecasted market size, according to IMARC Group, is US$ 54.3 billion in 2032, with a compound annual growth rate (CAGR) of 9.3 percent from 2024 to 2032. A growing emphasis on home spaces, driven by shifting lifestyle patterns and trends in remote work, has increased the demand for furniture that is both useful and visually beautiful, according to the report.

    Strategic Expansion and Innovation
    The Indian Online Furniture Market: Looking Ahead
    Global Powers vs. India
    Key Rivals and Future Prospects

    Strategic Expansion and Innovation

    To make 2024 a more inviting year, it’s important to be aware of the innovations and strategic expansions that global furniture makers are planning to provide to the Indian market. Many multinational corporations are preparing to enter or increase their footprint in the Indian market, thanks to the country’s rising middle class and strong economy, according to research.

    In addition, cutting-edge innovations like AR and VR integrated into the furniture shopping experience are predicted to become more popular. This innovation will bring in manufacturers from around the world, making the business even more engaging, and it will also improve the shopping experience for customers.

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    The Indian Online Furniture Market: Looking Ahead

    As a result of pent-up and deferred demand, an analysis by RedSeer Strategy Consultants predicts that the online furniture and home market share in India will reach $40 billion by 2026. The research also predicted that the online home furnishings market will expand at a CAGR of 39% between 2018 and 2026. Lights, mattresses, home furniture, and décor are all part of the home category on the internet. In the online furniture business, RedSeer Strategy Consultants predicts a tripling of shoppers by 2026, accompanied by an anticipated 1.8-fold increase in annual expenditure per client. 1Lattice projects that by 2025, the online furniture industry will have grown to Rs. 16,000 crore ($1.92 billion), a compound annual growth rate (CAGR) of 27%.

    Established participants in India’s organized furniture retail industry are either reorganizing their operations or just cutting back on their presence, while a new group of enterprises is entering the market. When it comes to food, fashion, and fast-moving consumer goods, for instance, the Kishore-Biyani-led Future group has decided to concentrate on those areas, while separating its home furnishings segment into its own company. In addition, companies like Urban Ladder aim to increase earnings, become Amazon vendors, and reach more customers at a lower cost by creating experience zones.

    Size of Furniture Market in India in 2022, With Estimates Until 2027
    Size of Furniture Market in India in 2022, With Estimates Until 2027

    Global Powers vs. India

    The worldwide furniture industry is expected to have grown from its current size of $860.5 billion, expanding at a CAGR of 6% from 2021 to 2030. With a market value of $3.5 billion in 2022 and a compound annual growth rate (CAGR) of 15% from 2018 to 2022, India’s share in global furniture exports is approximately 1.12%. When looking at global furniture imports in 2022, the top four countries were the United States ($86.76 billion), Germany ($24.44 billion), the United Kingdom ($14.54 billion), and France ($13.8 billion). India has a lot of untapped market potential, according to these numbers. Among the countries that import furniture to the US, Germany, and the UK, India currently accounts for 2.48%, 1.99%, and 1.66%, respectively. These percentages show that these potential markets have room for growth and that India may take advantage of it by increasing its presence there.

    Key Rivals and Future Prospects

    In 2022, according to the ITC Trade Map, the top countries for furniture exports were China with $130.89 billion, Vietnam with $21.08 billion, Germany with $18.4 billion, Italy with $17.17 billion, Mexico with $12.78 billion, Poland with $12.08 billion, and the US with $10.1 billion.

    When it comes to export supremacy, China and Germany couldn’t be more different. Several factors, including cheap labor, increased innovation and technology, and government subsidies and incentives, have contributed to China’s furniture sector’s rapid expansion. Germany, on the other hand, has been rather successful thanks to its innovative technologies, commitment to environment-friendly practices, and well-deserved reputation for superior craftsmanship.

    On the other hand, India has a few benefits over China, like cheaper labor, which means its products can be priced more competitively. The expanding purchasing power of India’s middle class also bodes well for the country’s furniture industry. Also, the nation can offer some distinctive furnishings to the global market by capitalizing on its design prowess and wealthy cultural history.

    The sector may concentrate on building upon its strengths while tackling problems and opportunities for growth if it first identifies where India has a competitive advantage. With this plan, India may become a major player in the international furniture industry.

    When these factors are considered, the Indian furniture sector is poised for a historic year in 2024, one that will be defined by collaboration, sustainability, and innovation. The research-based findings highlight the importance of being flexible and strategic as the industry deals with a world where customer expectations are always changing and global factors have an impact. We are on the cusp of an exciting new period of transition in the Indian furniture sector, thanks to the global manufacturers that are investing in our growth.

    FAQs

    Which are the top countries for furniture exports?

    According to ITC Trade Map, the top countries for furniture exports were China with $130.89 billion, Vietnam with $21.08 billion, Germany with $18.4 billion, Italy with $17.17 billion, Mexico with $12.78 billion, Poland with $12.08 billion, and the US with $10.1 billion.

    What will be the Indian market size by 2027?

    The Indian furniture market is expected to be $39 billion by 2027.

    What will be the worldwide furniture industry by 2030?

    The worldwide furniture industry is expected to have grown from its current size of $860.5 billion, expanding at a CAGR of 6% from 2021 to 2030.

  • Honda Activa: A Real Game Changer in India’s Scooter Market

    Becoming successful is not a random occurrence. Being prepared is key when opportunities arise; this was also true for Honda, a business that revolutionized the motorcycle industry. Introduces gearless four-stroke scooters to the market. The company is captivated by the incredible growth. The majority of participants were suspicious of the community’s decision to jump on the bandwagon and usher in a new era in the car industry as the scooter market crashed and burned, but eventually, businesses caught on. Because of the lackluster reception it received, Bajaj Automobiles—the pioneer in the scooter industry in India—decided to put it out of business. Honda iActiva eventually became just another generic scooter brand. Rivals benchmarked Honda Motors’ marketing strategies when they snatched on those strands and turned the mystery into a gold mine. The version of gearless scooters that has been extremely successful. Activa is now the best-selling two-wheeler globally, surpassing even the legendary Splendor in terms of sales. The complaint seeks to shed light on Honda’s plans by investigating the causes behind the company’s meteoric rise.

    How HONDA ACTIVA Became the Worlds Best Selling Scooter

    The Prometheus
    An Enduring Foe
    Striking Positively Rural Market Unexpectedly

    The Prometheus

    Consumer preference shifted from scooters to motorcycles, putting the scooter manufacturer in a tough spot after they had positioned themselves as the official mode of transportation for the Indian middle class. The idea that motorbikes will eventually rule the market and that scooters will occupy a supporting role began to take root. Bajaj Auto‘s announcement that it will be leaving the scooter industry to concentrate only on motorcycles effectively clinched the deal. With an explicit agreement with its former partner Hero Moto Corp, Honda launched its wholly-owned company in 1999 with the sole intention of concentrating on the autonomous scooter market and delaying the production of competing motorcycle goods until a much later date. After the joint venture dissolved in 2010–2011, the two companies were free to compete in their own markets, albeit with distinct areas of expertise. Hero Group became the biggest two-wheeler producer in the world, dominating the motorcycle category. In the four-stroke automated scooter business, Honda Motorcycle & Scooter India Pvt. Ltd. (HSMI) became the leader, with Activa sharing a lion’s share of the market, and capturing over 60% of the market.

    Activa is as dominant in the scooter sector as Hero Splendor is in the motorbike market. Through its gender posture, Activa was able to redefine the way the industry perceived the scooter business and tap into an entirely new market.

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    An Enduring Foe

    Scooters’ market share increased from 11% in 2009 to 30% in just a decade, and they show no signs of slowing down. Scooters dominated the minds of the Indian middle class for a long time, but when technology improved, motorcycles became the preferred mode of transportation for the country’s youth, leaving a noticeable gap. Scooters were more in line with the idea that mobility was defined by one’s personality, whereas motorcycles represented the mobility of the people.

    Scooters were more popular than motorcycles because of the increasing number of working women who valued convenience more than speed. Scooters also scored points for their excellent fuel economy, which was a selling advantage for buyers in both urban and rural areas. Customers thought Activa was a simple product.

    It may be utilized with relative ease by every member of the family for local tides. Gearless scooters didn’t do well at first, but they started to catch on in subsequent years. Others were captivated by Activa’s success and entered the scooter sector as well. These included TVS, HeroMotoCorp, Yamaha, Piaggio, and Suzuki.

    Compared to 1,224,379 units sold in 2011–12, HMSI’s scooter sales exploded to 3,189,102 units by the end of 2016–17 (SLAM). During the same period, sales of TVS scooters increased from 496,892 units in 2011–12 to 826,291 units.

    In 2017–18, Hero Moto Corp.’s sales increased from 414,389 to 789,974 units, a nearly 100% increase (SIAM).

    Sales of two-wheelers, of which scooters are a major part, surpassed the astonishing 20 million unit milestone, according to a SIAM report. In comparison to the same period in 2017, sales of two-wheelers increased by 14.80 percent in April–March of 2018.

    Market Share of Two-Wheelers Across India in Financial Year 2023, by Leading Manufacturers
    Market Share of Two-Wheelers Across India in Financial Year 2023, by Leading Manufacturers

    Striking Positively Rural Market Unexpectedly

    The demand for scooters in rural areas has exceeded all expectations, challenging the concept that they would only be popular in metros and big towns due to the small wheels and poor road conditions in India. Tuff Up Tube, a unique feature given by Honda, is a double-layered tube with a sealant that prevents tire punctures. This is one reason why demand from the rural market increased. This allowed them to address the issue of poor road conditions and high maintenance costs for two-wheelers, which were concerns of their rural clients.

    The fact that Honda didn’t dabble in anything else than scooters was a major contributor to their meteoric climb to fame.

    While the rest of the car industry was busy diversifying its offerings in 1990, Honda was bound by a contract with the Hero group to avoid the motorcycle business and instead concentrate on improving the scooter market. The foundational principles of modern scooterization were the driving force behind their dealer partnerships, design refinement, attempts to appeal to products with unisex appeal, etc. The gradual incorporation of scooters into ASEAN culture also helped their case gain traction.

    Honda was so encouraged by the early success of Activa that it released two more scooter models, the DIO, and the Eterno, in a very short period. It didn’t take long for Honda to make its dominance in scooter production and send a message that it meant business in the scooter industry. Honda resurrected the scooter market and captured over half of the share by year’s end 2005.

    FAQs

    Is Honda a Japanese company?

    Honda Motorcycle & Scooter India, Pvt. Ltd., abbreviated as HMSI, is the wholly owned Indian subsidiary of Honda Motor Company, Limited, Japan.

    Which is the best-selling scooter in India?

    The Honda Activa stands as a top contender among scooter sales in India, owing to its unmatched convenience, efficiency, and practical design. These qualities are the driving forces behind its widespread popularity.

    How many HMSI scooters were sold in 2016-2017?

    Compared to 1,224,379 units sold in 2011–12, HMSI’s scooter sales exploded to 3,189,102 units by the end of 2016–17 (SLAM). During the same period, sales of TVS scooters increased from 496,892 units in 2011–12 to 826,291 units.

  • Amul Teams Up with Michigan Milk Producers: Pioneering Global Dairy Solutions

    Amul, the renowned brand synonymous with quality dairy products in India, is making waves in the United States with its latest venture. Amul is set to revolutionize the dairy sector by introducing its fresh milk to the US market soon.

    This will be the first time Amul’s ‘fresh’ milk, a product from the Gujarat Cooperative Milk Marketing Federation (GCMMF), will be available outside India. 

    Amul Gold (with 6% milk fat), Amul Shakti (with 4.5% milk fat), Amul Taaza (with 3% milk fat), and Amul Slim n Trim (with 2% milk fat) will be sold in the US. 

    The Gujarat Cooperative Milk Marketing Federation (GCMMF) has teamed up with America’s tenth-largest dairy cooperative, the Michigan Milk Producers Association (MMPA), to introduce ‘fresh milk’ to the American market. 

    This partnership with Amul allows us to work with another cooperative to help them grow their brand in the United States, benefitting not only our own dairy farmer members, but those in India as well, MMPA President & CEO Joe Diglio has said. MMPA’s strategic partnership with Amul will continue to enhance MMPA’s growing and diversified product mix while utilizing our state-of-the-art technology.

    After the launch of locally sourced ‘fresh milk’ in the US, the Gujarat Cooperative Milk Marketing Federation also plans to expand this business to additional countries. 

    Jayen Mehta, GCMMF’s managing director, has stated to a media firm, “We are exploring various opportunities to reach untapped markets and will make announcements regarding fresh milk sales in other countries in the coming months.”

    Amul’s impressive Rs 55,000 crore turnover in fiscal year 2022-23, up 18.5% from the previous year, along with its extensive export history to over 50 countries, underscores its global dairy dominance. Its partnership with the Michigan Milk Producers Association further emphasizes its strategic international expansion. 

    Amul Set to Make U.S Debut with Fresh Milk | Four Variants to Be Made Available | MD Jayen Mehta

    What Does This Partnership Mean for Amul?
    Amul’s Rich Legacy in the Dairy Industry
    Expertise in Dairy Exports to Over 50 Countries
    Strategic Partnership With Michigan Milk Producers Association
    Driving Innovation and Growth in the Dairy Sector
    Partnership With Michigan Milk Producers Association
    Market Potential in the US
    Product Offerings and Packaging
    Impact on the Milk Industry

    What Does This Partnership Mean for Amul?

    This entry into the US market is not just another feather in Amul’s cap but a carefully orchestrated move to tap into the vast American dairy market with its array of products including milk, ice cream, ghee, cheese, and other dairy products.

    This collaboration marks a significant milestone for Indian milk cooperatives, as Amul becomes the first to sell fresh milk in the East Coast and Midwest regions of the US. This development paves the way for a new era of opportunities and growth for Amul, promising a unique blend of Indian tradition and global innovation in the dairy industry. 

    Let us delve into the details of the partnership and explore the potential impact of Amul’s fresh milk on the American market.

    Amul’s Rich Legacy in the Dairy Industry

    With a history spanning several decades, Amul has solidified its position as a key player in India’s dairy sector. The Gujarat Cooperative Milk Marketing Federation has been at the forefront of promoting dairy products under the iconic Amul brand. While the brand has a strong presence in the domestic market, its foray into the United States marks a significant expansion into international territories.

    The India Dairy Market is projected to achieve a valuation of USD 26.11 billion by 2024, with further growth anticipated. It is expected to expand at a Compound Annual Growth Rate (CAGR) of 6.61%, reaching USD 35.96 billion by 2029, according to a report by Mordor Intelligence.

    The major players in the India Dairy Market include Gujarat Cooperative Milk Marketing Federation Ltd, Karnataka Cooperative Milk Producers Federation Ltd, Mother Dairy Fruit & Vegetable Pvt. Ltd, Rajasthan Co-operative Dairy Federation Ltd, and Tamil Nadu Cooperative Milk Producers Federation Ltd. 

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    Expertise in Dairy Exports to Over 50 Countries

    Amul’s experience in exporting dairy products to more than 50 countries has been a testament to its quality and global competitiveness. 

    The brand’s success in international markets has laid the foundation for its venture into the US market. By leveraging its expertise in exporting dairy products, Amul aims to establish a strong foothold in the American dairy industry.

    Strategic Partnership With Michigan Milk Producers Association

    The collaboration between the Gujarat Cooperative Milk Marketing Federation and the Michigan Milk Producers Association signifies a strategic move to introduce Amul’s fresh milk to American consumers. 

    The partnership allows for the seamless distribution and marketing of Amul’s products in key regions of the United States, highlighting a shared commitment to quality and innovation in the dairy sector.

    Driving Innovation and Growth in the Dairy Sector

    Amul’s foray into the US market showcases its drive for innovation and growth in dairy. Introducing fresh milk in America not only expands its product range but also leads Indian dairy cooperatives to explore global markets. This strategic step elevates Amul’s global presence and establishes it as a pioneer in introducing Indian dairy to diverse consumers.

    Sales Turnover of Amul From Financial Year 2011 to 2023
    Sales Turnover of Amul From Financial Year 2011 to 2023

    Partnership With Michigan Milk Producers Association

    This collaboration signifies a momentous step for Indian milk cooperatives, as they venture into uncharted territory by selling fresh milk in the US. The partnership between Amul and MMPA promises a blend of expertise and innovation, setting the stage for a groundbreaking foray into the East Coast and Midwest markets of the United States.

    Key points of the partnership between Amul and the Michigan Milk Producers Association include:

    • GCMMF will provide the renowned Amul brand and expertise in dairy marketing, while MMPA will handle the collection and processing of fresh milk.
    • The collaboration aims to leverage the strengths of both entities to ensure the high quality and authenticity of Amul’s fresh milk in the US market.
    • By tapping into MMPA’s extensive network and infrastructure, Amul can effectively penetrate key regions in the US and establish a strong foothold in the competitive dairy landscape.

    With the combined expertise and resources of Amul and MMPA, consumers in the US can look forward to experiencing the rich tradition and quality that Amul’s fresh milk embodies, marking a significant milestone in the global dairy landscape.

    “The launch of liquid milk serves as a gateway for introducing other products, especially considering the decline in liquid milk consumption observed in the US market,” said Jordbrukare in an article on professional networking site LinkedIn. Jordbrukare specializes in providing market access, business strategy, and consulting services tailored to the dairy industry. 

    “One of the other reasons behind milk’s decline in the USA is the rise of ‘breakfast bars’. Being a part of fast moving life, people in the US are gradually preferring grab & go breakfast bars over cereals. Since milk is a complementary product to cereals, it’s a concern,” Groww, India’s financial services platform said in a post on X.

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    Market Potential in the US

    The decision to target the Indian diaspora and Asian population residing in major US cities like New York, Chicago, and Washington D.C. aligns perfectly with the demographic preferences for quality dairy products. This strategic move not only caters to the existing demand for authentic Indian flavors but also opens doors for expanding Amul’s reach to a broader consumer base.

    1. The presence of approximately 4.5 million Indians in the United States provides a solid foundation for Amul to establish its brand and carve a niche in the competitive dairy market. By offering a taste of home through its fresh milk varieties, Amul aims to capture the hearts and taste buds of the diaspora, creating a loyal customer base that values quality and authenticity.
    2. Beyond targeting the Indian community, Amul’s foray into the US market presents an opportunity to tap into the high per-household milk consumption in the country. With an average annual consumption of 75-100 gallons per household, the US market offers a significant volume of potential customers eager to explore new and premium dairy options. Amul’s fresh milk, known for its rich flavor and nutritional benefits, is poised to make a mark among discerning American consumers.

    By offering a diverse range of milk fat content options and packaging sizes, Amul caters to the varied preferences of consumers, showcasing its commitment to quality and customer satisfaction. This strategic move not only enhances Amul’s brand visibility but also sets a precedent for other Indian dairy businesses to explore international markets and unlock new growth opportunities.

    Product Offerings and Packaging

    Amul’s fresh milk will be available in convenient one-gallon and half-a-gallon packs, catering to the diverse needs of consumers in the United States. 

    This variety of pack sizes offers flexibility and convenience for individuals and families alike, allowing them to choose the option that best suits their preferences and consumption patterns. Whether it’s for daily use or occasional indulgence, Amul’s fresh milk packaging aims to provide a seamless and enjoyable experience for consumers.

    The product line of Amul’s fresh milk includes different variations with varying levels of milk fat content, appealing to a wide range of consumer tastes and preferences. By offering this diverse range of milk fat content options, Amul aims to cater to the specific dietary needs and preferences of its American customers, ensuring that everyone can enjoy the rich taste and nutritional benefits of Amul’s fresh milk. This thoughtful approach to product offerings reflects Amul’s commitment to providing quality dairy products that meet the needs of a diverse consumer base.

    Amul gets ready to give ‘The Taste of India’ to the United States

    Amul’s fresh milk will stand out on the shelves, enticing consumers with its promise of authentic Indian flavor and superior quality. 

    Impact on the Milk Industry

    Disruption and Competition

    Amul’s entry into the United States market signals a potential disruption in the milk industry, both in India and the US. As a dominant player in the Indian dairy sector, particularly with its renowned Amul brand, the expansion into the US market signifies a strategic move to diversify revenue streams and establish a global presence. 

    The partnership with the Michigan Milk Producers Association introduces a new competitor in the fresh milk segment, which could lead to increased competition among existing producers and suppliers. This increased competition may drive innovation, improve quality standards, and potentially result in more competitive pricing for consumers.

    Consumer Choice and Market Diversification

    Amul’s fresh milk debut in the US broadens consumer choices and introduces a new industry player. Through the partnership with the Michigan Milk Producers Association, consumers gain access to diverse fresh milk products, catering to various preferences and diets. This expanded variety may shape new consumption patterns and preferences in the industry.

    Innovation and Quality Standards

    Amul’s entry into the American market emphasizes innovation and top-quality standards. Teaming up with the Michigan Milk Producers Association guarantees that Amul’s fresh milk meets rigorous US market standards. This dedication not only benefits consumers with superior dairy products but also sets a benchmark for industry excellence, inspiring others to follow suit.

    Market Dynamics and Global Expansion

    The Amul-Michigan Milk Producers Association partnership marks a significant shift in market dynamics, introducing a well-established Indian dairy brand to the US market. This move not only unlocks growth opportunities for Amul but also serves as a blueprint for other Indian dairy firms eyeing global expansion. Venturing abroad enables Indian dairy businesses to reach new consumer segments, diversify revenue streams, and reduce reliance on domestic markets, fostering a more competitive global dairy industry.

    Collaborative Growth and Industry Impact

    The introduction of Amul’s fresh milk in the United States, in partnership with the Michigan Milk Producers Association, promises a significant impact on the milk industry. This collaboration not only expands market reach and revenue for both parties but also advances the dairy sector. It sets a precedent for future partnerships, fostering innovation and competition, and driving the industry toward growth and development.

    Conclusion

    The collaboration between Amul and the Michigan Milk Producers expanded their reach into the American market.

    The introduction of ‘fresh milk’ under the Amul brand in the East Coast and Midwest regions signifies a new chapter in the dairy industry, blending Indian tradition with global innovation.

    With a focus on quality products and strategic partnerships, Amul is poised to make a significant impact on the American milk industry. This partnership not only opens doors for Amul but also sets a precedent for other Indian dairy brands looking to enter the international market. The future looks bright for Amul as it continues to push boundaries and redefine the standards of excellence in the dairy industry.

    FAQs

    What prompted Amul to collaborate with the Michigan Milk Producers Association?

    Amul sought to expand its presence in the US market and identified the Michigan Milk Producers Association as a strategic partner to introduce its ‘fresh milk’ products.

    What specific regions of the US will Amul target for its fresh milk launch?

    Initially, Amul plans to introduce its fresh milk products in the East Coast and Midwest regions of the United States.

    What types of products will Amul initially offer in the US market?

    Amul will introduce its ‘fresh milk’ under its brand name, with potential plans to expand its product offerings in the future.

    What are the anticipated benefits of Amul’s entry into the US market?

    The collaboration is expected to facilitate market expansion opportunities for both Amul and the Michigan Milk Producers Association, potentially leading to increased revenue streams for both entities.

    How does this collaboration contribute to the global presence of Amul?

    By entering the US market, Amul establishes itself as a significant player in the global dairy industry and showcases the potential for Indian dairy brands to expand internationally.

    How extensive is Amul’s dairy cooperative network?

    Amul operates one of the largest dairy cooperatives globally, comprising over 18,000 village-level cooperatives. These cooperatives involve millions of farmers in milk production activities.

    What is the daily milk collection capacity of Amul?

    Amul’s daily milk collection surpasses 3.5 crore liters, highlighting its substantial contribution to the global dairy industry. This impressive volume underscores Amul’s significance as a major player in the dairy sector.

  • The Role of YouTube Influencers in Driving Sales for Brands

    On YouTube, several youthful content creators have amassed a massive following by posting videos in which they try on clothes, evaluate products, or demonstrate new makeup looks. A Delhi-based YouTuber named Sejal Kumar has 883,000 subscribers. In a video called “How I get ready for a shoot,” she walks her viewers through her procedure for getting ready, all the while gently promoting the Veet electric trimmer and how it saves her from having to rush to the salon at the last minute. The owner of the brand, Reckitt Benckiser (India) Ltd., funded the video’s production.

    In the ever-changing realm of online video creation, YouTube stars from India have emerged as powerful advocates for many brands. Several factors, including the influencer’s subscriber count, average views, engagement rate, and the brand’s unique requirements, determine the charges for these promotional services. To give you an idea, a promotional video from an Indian YouTuber with a moderate following of about 50,000 subscribers would cost anything from 20,000 to 50,000 INR.

    Putting the Price Cap
    Brands Opting for YouTube Influencers
    Developments and Data Regarding the Market

    Putting the Price Cap

    On the flip side, famous YouTubers with millions of fans can charge 2 lakhs INR or more for just one ad. But brands must not limit themselves to only subscriber counts. When comparing influencers, it’s usually better to go with one with a smaller but more engaged audience because they tend to deliver more value for money. The promotional fees are heavily influenced by the type of content and the intended audience.

    Consider a firm that is trying to reach tech-savvy consumers with an ad for their product. In such instances, they may choose an influencer whose audience consists primarily of young adults and whose content is centered on technology. The opposite is true for household goods brands; they may favor influencers who cater to stay-at-home moms and their families.

    To meet the unique requirements of brands and work within their budgets, YouTubers may sometimes provide bespoke promotional packages. Reviews, sponsored videos, shoutouts, and product placements in their normal material are all examples of what can be considered these.

    Influencers may negotiate for free goods and services in addition to monetary remuneration as part of their promotional contract. For startups or smaller firms on a tighter budget, this could be a great way to contact their customers without breaking the bank.

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    Brands Opting for YouTube Influencers

    Influencer marketing is a significant deal for Amazon India, one of the largest eCommerce platforms in the country. Actors, singers, and YouTubers from India are among the influencers that the brand has teamed up with to market its wares. Influencer marketing is another strategy that Amazon India employs to boost sales and awareness of the business. Indian influencers have been working with Myntra, a leading fashion shop in India, to promote the brand’s wares. Myntra has collaborated with numerous influencers, including Bollywood stars and fashion bloggers, to produce content that speaks to its demographic.

    The top Indian eCommerce platform, Flipkart, has been advertising its wares through the use of influencers. To reach its demographic, the brand has collaborated with a wide range of prominent figures, including Bollywood actors and lifestyle influencers. Influencer marketing is nothing new for L’Oréal India too; the company has been doing it for some time. The business has teamed up with several popular Indian artists, musicians, and YouTubers to produce material that speaks to its demographic.

    Developments and Data Regarding the Market

    In 2025, the influencer marketing sector in India is projected to be worth Rs 2,200 crore, with a compound annual growth rate of 25%, according to the Influencer Marketing Report.

    Influencer Marketing Market Size Worldwide
    Influencer Marketing Market Size Worldwide

    The rise of short-form video formats on sites like YouTube, Facebook, and others has contributed to the explosion in social media consumption, and marketers’ increased efficiency in gathering data for social media marketing is a major factor in this trend. On average, Indians spend 2 hours and 25 minutes each day on social media, and there are more than 448 million active users in the country.

    From being a fad to an essential tool for modern brands, influencer marketing has gone a long way. Now considered an essential advertising approach, influencer marketing has been incorporated into 93% of marketing efforts.

    There will be no stopping the growth and change of influencer marketing in India. Brands can get enormous benefits from utilizing influencers in certain industries. The top four categories that account for 70% of influencer marketing volume are personal care (25% of the total), food and beverage (20%), fashion and jewelry (15%), and mobile and electronics (10%), according to “The Indian Influencer Marketing Report” by INCA.

    There is a lot of space for innovation and participation in influencer marketing in India, thanks to the country’s thriving startup ecosystem and the fact that larger brands are also trying to reach their target audience.

    FAQs

    What are the top categories that account for the maximum percentage of influencer marketing?

    The top four categories that account for 70% of influencer marketing volume are personal care (25% of the total), food and beverage (20%), fashion and jewelry (15%), and mobile and electronics (10%).

    What will be the anticipated worth of influencer marketing in 2025?

    In 2025, the influencer marketing sector in India is projected to be worth Rs 2,200 crore.

    What is influencer marketing?

    Influencer marketing is a strategy where brands collaborate with individuals with a large and engaged following on social media to promote their products or services to a targeted audience.

  • A New Era Is Dawning for India’s Drone Industry

    Ever since drones first appeared on the scene, people all over the globe have been enamored with this new way of surveying the planet. Inspired by the rapid development of this industry, India is aiming to become the world’s leading drone manufacturer by 2030. In addition to making the country more technologically advanced, this transition will reportedly add roughly 1.15 percent to the GDP and create five lakh employment in the next years, according to media sources. The use of drones has been hailed as a crucial component of the ecosystem surrounding Industry 4.0. The government’s Production Linked Incentive (PLI) program, which was launched in 2021, is being requested by the drone sector to be expanded.

    While speaking with the media recently, Indian Minister of State for Civil Aviation Gen. VK Singh (Retd.) predicted that the drone manufacturing industry’s yearly sales turnover might increase from around Rs 60 crore in 2020-21 to around Rs 900 crore in 2024-25.

    Boosting the Sector
    Reasons to Elevate This Sector
    Problems Impeding Expansion

    Boosting the Sector

    By announcing liberalized drone regulations in August 2021, the Indian government ushered the drone sector into what it called “an era of supernormal growth.” Since then, the industry has skyrocketed. These rules simplified the red tape by doing away with security clearances during licensing and registration and cutting the number of documents and permissions needed from 25 to 5.

    Adding more manure to foster the growth of this sector, the Ministry of Civil Aviation has implemented the following five measures—the Ease of Doing Business (Drone Rules 2021), financial incentives (PLI scheme), government procurement, export liberalization, and domestic industry promotion.

    In September 2021, the ministry released the drone airspace map and a PLI scheme following the drone rules. In October 2021, the ministry released the UAS Traffic Management (UTM) policy framework. Drones flying up to 400 feet are now allowed across approximately 90% of Indian airspace according to a map released on September 24, 2021.

    PLI has distributed Rs 30 crore so far; it is regarded as a spearhead for boosting the drone sector. The government launched the program with an incentive package of Rs 120 crore, to be distributed over three fiscal years at a rate of 20% of the value addition. A total of twelve drone manufacturers and eleven drone component manufacturers were chosen as PLI beneficiaries under the program.

    Size of Drone Service Market in India for 2020 and 2021, With a Forecast Until 2030
    Size of Drone Service Market in India for 2020 and 2021, With a Forecast Until 2030

    Reasons to Elevate This Sector

    Drones have many practical applications in many fields, including cinematography, building, defense, mining, telecommunications, oil and gas exploration, monitoring sites, aerial photography, and land surveys. They are also useful for keeping an eye on infrastructure like roads and highways. As technology advances and cost efficiencies rise, solutions like drone-facilitated last-mile deliveries and other support for retail, healthcare, logistics, and other sectors may soon become more commonplace in consumer market applications.

    This can only happen in India if the country’s drone industry grows. This calls for more expenditures in research and development, more local production to meet demand, and solutions that can handle both general-purpose and hyperlocal needs. Significant cost reductions will only occur in the industry after that. Businesses of all sizes, from large conglomerates in related industries to fledgling tech companies and micro, small, and medium enterprises (MSMEs)—can benefit from this industry-ecosystem-based approach. These businesses can manufacture components, create software applications, enterprise solutions, and counter-drone technology, and even design and assemble finished goods. Diversified product lines that are finally appealing to consumers will be the final result.

    Problems Impeding Expansion

    This industry is facing several obstacles that are preventing it from reaching its full potential, even though all of the bots have been correctly positioned. Access to necessary parts is one of the most significant challenges in this regard. As a result of the limited availability of these components in India, drone makers are forced to rely largely on suppliers from other countries. Components were exempt from the import embargo that the government imposed to encourage domestic drone production.

    The local ecosystem is starting to see a lot of investment, and it will start to take shape in the next few years. India’s largest drone manufacturer, IdeaForge, is collaborating with several suppliers to “indigenize” numerous drone subsystems. It is equally critical to set up testing facilities and cultivate a talent pool for piloting these UAVs. Inadequate oversight is a risk that the PLI system poses to the drone business. The sector is requesting a merger of production-linked and service-linked incentives in addition to a larger PLI system.

    Emerging Drone Startups In India
    Revenue in the Indian Drones market is $23.62 Mn in 2023 and will grow by 8.12%(CAGR 2023-2027). Here are the emerging drone startups in India.
    StartupTalkyTanusha Verma