“Imports Have Been Increasing Steadily”

A. K. Saxena President, India, Importers Chambers Of Commerce And Industry (IICCI)

TDB: How has the apple import been faring over the last few years?

A. K. Saxena (AKS): Imports of fresh fruits is a new concept to India. Though banana is the most consumed fruit in the country, followed by apple, apple takes the No.1 spot of all the fresh fruits imports. It cannot be grown in the southern part of the country; thus, the region has to rely on imports. Also, the cost of transporting apples from Kashmir to Kanyakumari is pretty high. For instance, a container of apples (16-20 tonne) from Washington or West Coast to Chennai at present costs roughly $3,000 or Rs.1,80,000, which works out the same from Kashmir to Kanyakumari. And, imports keep the apple market alive throughout the year! As per our estimates, India’s total apple market, both domestic and international, is worth Rs.10,000 crore.

TDB: How aware is the Indian consumer about imported apples?

AKS: Consumer awareness has definitely increased over the years. Nowadays, people are privy to various food products, including fresh foods that are available in the markets – with that said, a large section of Indian consumers is still learning. The market has flourished because people can afford them and they come in handy during the off-season. And because of the increase in awareness, apple is no longer a winter fruit.

TDB: What is your projection and outlook for apple imports in the current season?

AKS: Imports have been increasing year-on-year. But this year, we expect larger imports because of the instability in Kashmir. The increase in demand is also triggering the imports, just like all the other fresh fruits imports. We have seen a significant amount of kiwifruit and cherries coming into India this year.

TDB: What are the major challenges faced by Indian apple importers?

AKS: The Government of India has placed restrictions on the imports of apples. Firstly, they have fixed the minimum import price to support the domestic pricing structure. For instance, in the case of Washington apples, the import price has been fixed at $.8 per kilogram. Secondly, we have to deal with strict phytosanitary norms, whereby, the exporting country has to follow certain norms ensuring compliance with Indian food safety standards and regulations.

TDB: What kind of logistic issues do you have to deal with in this business?

AKS: Most importantly, I think the clearance at the ports should be improved. A container cleared in Mumbai should ideally reach Delhi within a day, but it takes six days because of our poor roads. Lack of warehouses and cold chain facilities are other issues. The overall infrastructure needs to be revamped.

“Harmonise India’s Food Standards With Codex”

Amit Gidwani Co-owner, G T Fruitech Pvt. Ltd.; And VP, Fresh Fruit Importers Association, Delhi

TDB: How do you weigh this year’s apple imports against last year?

Amit Gidwani (AG): The imports volume depends on several domestic and global factors, such as the size and quality of the crop in India and abroad, amount of apples that go into the cold stores in India, currency rates, etc. Last year (September 2015 to August 2016), imports were less compared to the previous years because of significant domestic production. As a result, a huge stock went into cold storages. But Indian growers and traders were not able to store the fruit longer because of lack of technology and development of adequate cold storages in India. Domestic apple production is expected to be lower this year, so we do see more room for imports. Consumption is high in India. It is evident from the fact that despite our high production and imports tax, we buy a lot of imported apples. So, even as the Indian apple industry is growing and infrastructure is improving, we still see a market for imported apples.

TDB: The government has relaxed import restrictions on apple to allow inbound shipments of the fruit through more ports. How has the move impacted the imports?

AG: The government had imposed restriction on imports of apples into India through all ports, except Mumbai, for a brief period of time. The move was seen as a measure to control the imports of apples into India. The aforesaid restriction was in place for just around four months, from mid-September 2015 to mid-January 2016. We, however, did not see a major impact because this is a period when we do not import large quantities as Indian apples are in abundant supply during this period.

TDB: What kind of margins can one expect in this business?

AG: Margins are very unpredictable in the fresh fruits business. Apples are perishable in nature so they must be sold within a time frame, whether at a loss or a profit. The fluctuation is too high and too quick at both buy or sell sides, and, of course, currency fluctuations too come into play. Compared to other importing countries around the globe, India has one of the highest tariff rates on imports of apples. This is kept in the interest of our domestic apple producers, but if we look at it from the consumer’s point of view, they can surely benefit if the tariff rates are lowered, thereby boosting the apple import business.

TDB: What is the percentage share of imported apples in the total imported fresh fruits basket? And what about other exotic fruits? 

AG: We can say that apples constitute about 50% of the total fresh fruits imports, followed by citrus (about 15-20%), pears and kiwifruit (10-15% each), and then grapes, plums and
other varieties.

TDB: In your opinion, what is the level of consumer awareness on imported apples? Can they differentiate between the imported and domestic varieties?

AG: Of late, there has been a lot of misunderstanding among consumers regarding imported apples. Issues like wax coating had surfaced due to some malicious videos being circulated on the social media. In fact, it’s totally a food-graded wax, approved by food and health safety regulators like WHO and FDA, and is absolutely safe to consume. Actually, waxing helps the fruit stay fresh longer and retain the juice. So, I strongly feel that there is still a need to create awareness among consumers.

Indian market is dominated by Red Delicious apples (from USA and Chile), Fuji apples (from China) and Royal Gala apples (from New Zealand and Chile). But since the last few years, Indian consumer have also developed liking for other varieties such as Granny Smith (USA and Italy), NZ Queen/Rose (New Zealand) and Qinguan apples (China). So, imports of several varieties have been substantially rising.

TDB: India mostly imports apples from US, China and Chile. How about sourcing from other apple suppliers?

AG: Well, in the recent times, many new Latin American and European countries have become our suppliers – acceptability of their apples is also on the rise in the Indian market. Apples, especially from Italy, Spain, Belgium and Poland seem to have a lot of potential in future due to their low pricing and a wide range.

TDB: What kind of regulatory barriers do you face while importing apples? What are the changes that you wish for smoother trade?

AG: Over time, the fresh fruits import in India has come under the scanner and is now being regulated by the Food Safety & Standards Authority of India (FSSAI). Nowadays, all imported fruits are first tested by FSSAI-nominated labs and then granted clearance. In a way, this is good for the consumers and also for the industry. After all, it is importer’s responsibility to bring in good quality fruit for consumers. On the other hand, there are certain issues that need to be fixed. One key issue is the acceptance of the International standards of Codex (which is approved by WHO). Indian authorities still follow their own Codex standards for granting approval, which are very different from the internationally accepted standards. This creates a sense of uncertainty among exporters worldwide.