Coffee consumption on the rise in India

India has traditionally been a tea drinking nation but the popularity of coffee shops has increased with the expansion of the middle class.

Domestic consumption of coffee shows a steady increase, according to a market research study initiated and sponsored by the Coffee Board of India and conducted in association with Mumbai-based Market Probe and Research International. From being a traditional beverage consumed mainly in South India, coffee now has a national presence, consumed in several forms and retail formats.

The findings of the research study based on fieldwork conducted in 2003, builds on a 2001 survey, and provides analysis of the domestic consumer market at a crucial phase of its evolution.

It provides some interesting insights of coffee consumption in India. For example, in 2003 total coffee consumption was estimated at 70,300 MT, with an urban-rural divide of 70% and 30% respectively. It also confirmed that the Indian market has been attracting big coffee brands such as Coffee Day and Italian Lavazza, as well as coffee export countries such as Brazil.

Significant opportunities for coffee producers to develop relationships with India exist today and will no doubt increase. Not only is coffee consumption increasing, but there are opportunities for Indian coffee imports to be re-exported as instant coffee.

Under the Indian 100% Export Oriented Unit (EOU) scheme whose aim is to boost exports by creating additional production capacity, coffee imports pay no duty as long as they are processed in India and a value added tariff for exports of instant coffee are levied. This dynamic policy initiative has increased export opportunities and has been attracting international coffee producers interested in selling coffee to India.•