The country’s fragrance and flavour industry is expected to grow by 12 per cent per year and reach USD 5.2 billion in three to four years, according to an industry apex body.
Rising disposable incomes and changing consumer preferences, according to Fragrances and Flavours Association of India (FAFAI) president Risabh Kothari, will drive this growth.
“The fragrance and flavour industry in the country is rapidly expanding. According to Kothari, the country’s industry is currently worth USD 3.7 billion.
According to the FAFAI president, the major user industries of this segment are food and beverages, personal care, home care, pharmaceuticals and cosmetics, and these include major MNCs, domestic companies, and small businesses.
Consumers are increasingly opting for natural and organic products, which presents an opportunity for the fragrances and flavours industry, he said.
In addition, with rising disposable incomes, consumers are willing to spend more on premium products, according to Kothari.
According to him, the personal care industry is rapidly expanding, presenting a good opportunity for this segment.
However, Kothari stated that the biggest threat to this industry is cheap imports dumped by overseas players due to the inverted duty structure.
Natural essential oils, which have a higher import duty than fragrances, are a major ingredient for the industry.
“We have made several requests to the government to correct this anomaly by increasing duty on finished fragrance compounds, which will protect the domestic industry,” he said.
According to Kothari, the current duty structure is harmful to the domestic industry.