Source: Financial Express, 14 March 2023
The fragrance and flavour industry of the country is likely to grow around 12 per cent each year and touch over USD 5.2 billion in three to four years , an apex body of the industry said. This growth will be driven by factors like rising disposable incomes and changing consumer preferences, Fragrances and Flavours Association of India (FAFAI) president, Risabh Kothari, said. “The fragrance and flavour industry is growing very fast in the country. The present size of the industry is USD 3.7 billion in the country”, Kothari said.
The major user industries of this segment are food and beverages, personal care, homecare, pharmaceuticals and cosmetics, and these include major MNCs, domestic companies and small businesses, the FAFAI president said. Given the growing demand for natural and organic products, consumers are increasingly opting for them which present an opportunity for the fragrances and flavours industry, he stated. Coupled with this, consumers are willing to spend more on premium products with rising disposable incomes, Kothari said.
According to him, the personal care industry is growing at a rapid pace which also presents a good opportunity for this segment. However, Kothari said the biggest threat which this industry is facing is that of cheap imports dumped by overseas players owing to inverted duty structure.
A major ingredient for the industry is natural essential oils which attract higher import duty compared to fragrances, the end product. “We have sent several representations to the government to correct this anomaly by increasing duty on finished fragrance compounds which will protect the domestic industry”, he said. The present duty structure is detrimental to the domestic industry, Kothari claimed.
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