Source: Taiwantrade | Updated: 17 August 2015
Taiwan External Trade Development Council
Market Research, Kyle Chiu
According to the 2015 World Economic Outlook report by the International Monetary Fund, the Indian government’s economic reforms have yielded positive results, including a more favorable local business environment and higher quality public expenditures. The report suggested that if continued, the reforms can help enhance India’s production capacity and create more jobs, which in turn will raise the country’s overall competitiveness. The report also predicted that if the reforms induced an 11% increase in foreign direct investments, the economy will see sustained, rapid GDP growth rate of 7.5%, 7.9%, and 8% in the fiscal years of 2016, 2017, and 2018, respectively.
Although there are still regional imbalances in India, the country’s major cities already possess sound industrial infrastructure and comprehensive supply chains. India has also achieved self-sufficiency in many types of industrial goods and raw materials. Compared to Taiwan, India has relatively lower levels of consumption, lower quality demands, and lower technical demands. However, this has led to a fiercely competitive market with extremely low-priced, entry-level products. It is advised that Taiwanese exporters use market segmentation to market their products in India. As Taiwanese products are generally considered as middle to upper tier products in India, their qualities are regarded by shoppers as somewhere in between European/Japanese products and Chinese products. Taiwanese exporters are advised to select their target customers accordingly.
The market demands in India can be broken down into two main categories: industrial goods and consumer goods. In terms of industrial goods, the quality of Taiwanese machinery is highly approved by Indian operators. Taiwanese exporters can consider introducing machinery that meet the needs of India’s mainstream industries, which includes textiles, shoemaking, and fastener manufacturing.
In terms of consumer goods, given that India has a significant number of low income families, particularly in the northeast area, the price of Taiwanese products may not be the most ideal for the local consumers. However, the emerging Indian middle class has created a growing market for middle to upper tier products. Therefore, products that meet the needs and quality demands of middle class consumers can potentially do well in the market, such as electronic devices, health foods, cosmetics, small electronic appliances, and daily necessities.