International institute of foreign trade and research

CERTIFICATE BY STUDENT

I Anil Shrivastava hereby certify that the project titled “Export Potential of Coffee Beans to U.K” has been undertaken under the supervision of Prof Nidhi Bajaj, towards the partial fulfillment of degree Master of Foreign Trade (integrated)

It is further certified that the project complied by me is my own work and to the best of my knowledge, it does not contain any part of any work, which has been submitted for the award of degree in this university, or any other university/deemed university without proper citation.

Place Indore Name: Ravi katariaDate: Roll No: MFT ( 5years) 6th SEM

International institute of foreign trade and research

CERTIFICATE BY THE SUPERVISION

This is to certify that the project titled “Export Potential of Coffee Beans from India to U.K is a piece of research work has been by Anil Shrivastava under my guidance& supervision towards the partial fulfillment of degree of Master of foreign trade & research. I recommend that the project to be submitted to DAVV Indore.

It is further certified that the project report complied by him is his own work & I recommend that the project to be submitted to DAVV Indore.

Prof: Nidhi Bajaj Director/Principal (signature of project guide) (signature) Date: Date:

OBJECTIVES

Promoting the development of consumption and markets for allTypes and forms of coffee, including in coffee producing countries;

Promoting coffee quality with a view to enhancing consumerSatisfaction and benefits to producers;

Promoting international cooperation on coffee matters;

To study scenario of coffee beans exports.

To study the export potential of coffee beans to U.K

To study different types of coffee beans to be exported.

To know about the major coffee producing area in India

International institute of foreign trade and research

METHODOLOGY

I have used the secondary data for the preparation of this project. Sources of secondary data being the books, websites & search engines, report magazines & news paper articles.

The conclusion of the project has been drawn out on the basis of all the secondary data collected. It is been observed that promoting Indian coffee& services as export items calls for integration effort from

government, industry and educational & research institutions.

International institute of foreign trade and research

PREFACE

The world of export and import has always been my area of interest since long time & my study at the I.I.F.T.R, Indore helped me to understand this fascinating world of international trade.

Agriculture industry being my sector of interest, so I have utilized this opportunity of research project for the study of agro-based industry & its export potential in UK.Government of India has started giving incentives to the exporters to boost the export of coffee& coffee beans.

Though the limitations of cost, time & non availability of primary data have been their, I have tried my

level best to add most relevant data & information related to the topic.

ACKNOWLEDGEMENT

People rarely get the opportunity to do special work in their life

But I got this opportunity to work on the topic “Export potential of coffee beans”

For this first of all I want to thanks “Devi Ahilya Vishwa Vidhyalaya” for giving me opportunity.

I am very grateful to “Lt.col (retd) Dr.V.K Gautam” director I.I.F.T.R, for allowing me to work on this project.

Especially I am thankful to “Prof: Nidhi Bajaj faculty, I.I.F.T.R, under whose kind guidance I have completed the project & who helped me at the every stage of my project work by giving me her precious time.

I am also thankful to”Mr.Anurag Khare” library in charge, I.I.F.T.T, who allowed me to use the books during the work of my project.

Anil Shrivastava MFT (5 years) 6th SEM I.I.F.T.R

Chapter 1

COFFEE BEAN

1.1 INTRODUCTION

A coffee bean is a seed of the coffee plant. It is the stone insidered or purple fruit of the coffee plant. The fruits, coffee cherries or coffee berries, most commonly contained two stones lying with their plant sides together. The coffee beans consist of mainly endosperm which contains 0.8-2.5% caffeine, a main reason for cultivating the plants. Coffee beans are an important export product for some countries.

Structure of coffee berry & beans: 1.center cut 2. Bean (endosperm) 3. Silver skin (testa, epidermis) 4. Parchment (hull endocarp) 5. Pectin layer 6. Pulp (mesocarp) 7. Outer skin (pericrap, exocrap).

ETYMOLOGY

Coffee beans are botanically not beans the name derives from Arabic language (Quhwa) “ coffee” and Bunn “Berry” coffee cherries on coffee plant ( coffee Arabic)

1.2 History Of Coffee

Myth has it that coffee was first discovered in or around the 9th century in Abyssinia (Ethiopia) by a young goatherd. He noticed that his goats liked to graze upon berries that seemed to have interesting side effects! The goats jumped around seemingly full of energy and realizing that the berries must have some magical property the young goatherd took some back to the village elders. They boiled them with water and soon realized the stimulating potential of the brew. From this point on coffee plants were cultivated by man purely for their precious crop.

The Ethiopians traded with the Arabs and coffee spread eastwards. The Arabs jealously guarded the coffee plant and although they traded widely across the Islamic world all beans for export were boiled to prevent any chance of transplantation. However the Dutch managed to transplant some to Java (Indonesia) in late 1600's, and this was the catalyst for the worldwide growth of coffee cultivation. In the late 17th Century coffee came to the masses of Europe and the first coffee houses opened in Italy, Austria and England. Lloyds of London and the London Stock Exchange are just two of the key institutions whose roots can be traced back to a 17th Century coffee house.

By the 18th Century the French had introduced coffee cultivation to Martinique, and by the end of the century there were between 18 and 19 million coffee bushes firmly establishing Central America and South America as important coffee producers.

Today coffee is grown on five continents, is consumed worldwide, and is one of the most important commodities traded on the world markets.

Scientific classification: Coffee makes up the genus Coffea of the family Rubiaceae. Arabian coffee is classified as Coffea Arabic, robusta coffee as Coffea canephora, and Liberian coffee as Coffea liberica

Movement of coffee

From Ethiopia coffee berries were brought to the Arabian Peninsula, and were initially grown in what at present is known as the country of Yemen.

From Yemen, coffee moved to Turkey.

Here, coffee beans for the first time were roasted over open fires.

The roasted beans after being crushed were boiled in water, producing a simple adaptation of the beverage that is consumed at present.

Coffee initially reached the European continent through Venetian trade merchants.

As soon as it arrived in Europe this new beverage attracted severe disapproval from the Catholic Church.

A large number of people were of the opinion that the pope should forbid coffee, terming it the devil’s drink.

However much to their chagrin the pope who was a coffee drinker was favorably disposed towards coffee and pronounced it as a genuinely Christian beverage.

In the 1700's, coffee entered the Americas through a French infantry captain who raised one tiny plant on its extended trip across the Atlantic.

This single plant, shifted to the Caribbean Island of Martinique, became the precursor of more than 19 million trees on the island within 50 years.

It was from this modest launch that the coffee plant made its way to the remainder of the tropical areas of South as well as Central America.

1.3 COFFEE SCENARIO OF INDIA

Coffee is a beverage obtained from coffee plants fruits called cherry. The coffee plant refers to any type of tree in the genus madder family which is actually a tropical evergreen shrub that has been potential to grow 100 feet tall.

Coffea Arabica & coffea Robusta are the two commonly cultivated species of caffea plant having economic significance. Robusta bean is smaller & rounder than a Arabica bean. Robusta beans produce a bitter toasting coffee with about 50% more caffea than Arabica.

Arabica accounts for about 70% of the world coffee production. Robusta coffee trees represent about 30% of the world market.

The coffee trees grow well in tropical region with abundant rainfall, year round warm temperature with no frost. The coffee tree needs an average tree between 17c to 23c with abundant precipitation and good soil conditions for growth. Robusta can withstand warmer temperature upto 29c and can also thrive at lower altitude than Arabica

The coffee plants produce its first full crop of beans at about 5 years old and then remain productitive for about 15 years.

The average coffee trees produce enough beans to make about 0.45 kg to 0.7 kg of roasted coffee per year.

it takes approximately 9000 handpicked green coffee beans to make a kg of coffee.

This is usually one coffee harvest per year north of equator, harvest takes place between September and March and south of the equator between April and May.

90% of the world coffee trade is in green (unroasted) coffee beans. In most countries there is a one main harvest a year. Coffee is usually shipped unroasted (green coffee) in 60 kg jute or sisal/hemp bags marked with the grade, country of origin, and method of processing

1.4 PRODUCTION SCENARIO.

India is worlds 5th largest producer of coffee producing around 3 lakh tones annually. Indian coffee is considered to be one of the most stimulating coffees in the world being mild in nature i.e. having a low acid content. India is the only country, which grew all of its coffee shade. India currently exports about 70% of its total coffee production to around 44 countries across the globe.

The crop year of Indian coffee lies between Octobers to September.

Coffee growing regions in India can be grouped under 3 district categories, traditional areas representing the southern state of Karnataka, kerala, and Tamil nadu, & non traditional areas comprising Andhra Pradesh, orrisa in the north eastern ghats of the country. The north eastern region comprises the seven sisters, seats of Assam, Manipur, Meghalaya, Mizaram, Tripura, Nagaland and Aranachal Pradesh.

In Karnataka, Chikmagalur, coorg & Hassan are the major coffee producing districts producing around 76300 tons & 119975 tons annually of Arabica and Robusta coffee respectively.

In kerala, wyanand, travancore & Nellianpathy are the major coffee producing districts producing around 13750 to 55450 tons annually of Arabica and Robusta respectively.

In Tamil nadu, pulney, nilgiri, shevray (salen) & Anamalias (Coimbatore) producing around 14375 to 4450 tons of Arabica and Robusta respectively.

Among non-traditional areas, Andhra Pradesh, Orrisa and northeastern regions produce around 1950 to 125 tons of Arabica and Robusta respectively.

1.5 CHARACTERSTICS OF COFFEE

An appreciation of fine coffee is much like an appreciation for fine wine. The greater your knowledge, the greater the magnitude and satisfaction of your experience. Many claim to know what makes a truly great cup of coffee—but do they?. To qualify as a true connoisseur, there are at least five main elements that you must understand—acidity, body, aroma, finish and flavor. A coffee that is rich in these characteristics will most certainly please even the most discerning coffee drinker.

AcidityCoffee’s acidity is a highly desirable quality. It is the pleasant snap, sparkle or sensation that is most often experienced toward the back of the mouth or around the edges of the tongue. Coffee’s acidity may be defined as lively, flat, dull, moderate, bright, and in many other ways. It is most often the characteristic that brings life to a coffee’s flavor.

BodyThis is most often referred to as the feeling of lightness or heaviness that is experienced in the mouth when drinking coffee (also known as texture).

AromaAroma is simply the fragrance of the coffee. Oftentimes, this is referred to as the bouquet, which is actually aroma of the grounds themselves. Coffee aroma may be easily identifiable or involve a complex combination not dominated by any one fragrance in particular.

FinishFinish describes the distinct and highly pleasant aftertaste that lingers in the mouth long after the coffee has been swallowed.

FlavorFlavor refers to the actual taste of the coffee. This can be straightforward or rich and complex. Factors that influence flavor include richness or fullness, complexity—a depth of flavors—and balance, a harmony of pleasurable elements.

Chapter 2

2.1 Types of Coffee Beans

First of all, coffee beans are not actually beans, but the seed of a cherry from a coffee tree. These trees grow in subtropical climates from sea level to around 6000 feet.

Harvesting Coffee Beans

Coffee is a very labor-intensive commodity. The cherries ripen at different times so they must be picked by hand. Since there are about 4000 coffee beans in a pound, 2000 cherries must be hand picked (there are two beans per cherry). The average coffee tree will produce only about 2 pounds of roasted coffee per year.

Robusta:

Robusta coffee is a lower grade of coffee that is typically grown at lower elevations. It has more of an astringent flavor and contains a higher amount of caffeine.

The Robusta trees are easier to grow and maintain. They are also more disease resistant and produce a higher yield. This type of coffee is typically used to achieve a lower price.

Robusta is grown at lower altitudes, 0 to 700 meters, and has a high yield per plant and high caffeine content (1.7 to 4.0%). It accounts for about 30% of world production. Robusta has stronger flavors than Arabica with a full body and a woody aftertaste that is useful in creating blends and especially useful in instant coffee.

Robusta is mainly grown in the following regions:

Western and Central Africa (Ivory Coast, Cameroon, Uganda, Angola, etc.) Malaysia (Vietnam, Sri Lanka, Sumatra, Java, etc.) Brazil India

Arabica:

Arabica coffee is the superior grade of coffee that most people usually refer to as gourmet coffee. They contain about half of the caffeine of Robusta and have more desirable flavors and aromatic properties.

Much of the coffee grown world wide is of the Arabica species, but only a fraction meets standard set by the Specialty Coffee Association of America.

Arabica grows at higher altitudes, 1000 to 2000 meters, and while it has a lower yield and less caffeine content (0.8 to 1.4%) it is widely recognized to be superior to Robusta. Arabica accounts for about 70% of world production, although only about 10% of this yields "grand cru" beans. Arabica has a delicate acidic flavor, a refined aroma and a caramel aftertaste.

Arabica is mainly grown in the following regions:

Central America (Mexico, Guatemala, El Salvador, Nicaragua, Costa Rica, Panama)

South America (Venezuela, Colombia, Ecuador, Peru, Bolivia, Paraguay, Argentina)

India Eastern Africa (Ethiopia, Kenya, Tanzania, Zambia, Mozambique) Papua New Guinea

2.2The Comparison between Arabica and Robusta Coffee Beans

While there are several different coffee species, two main species of coffee are cultivated today.  Coffea Arabica, known as Arabica coffee, accounts for 75-80 percent of the world's production.  Coffea canephor, known as Robusta coffee, accounts for about 20 percent and differs from the Arabica coffees in terms of taste. While Robusta coffee beans are more robust than the Arabica plants, but produce an inferior tasting beverage with higher caffeine content.  Both the Robusta and Arabica coffee plant can grow to heights of 10 meters if not pruned, but producing countries will maintain the coffee plant at a height reasonable for easy harvesting.

Coffee Plant Growth and Development

Three to four years after the coffee is planted, sweetly smelling flowers grow in clusters in the axils of the coffee leaves.  Fruit is produced only in the new tissue.  The Coffea Arabica coffee plant is self-pollinating, whereas the Robusta coffee plant depends on cross-pollination.  About 6-8 weeks after each coffee flower is fertilized, cell division occurs and the coffee fruit remains as a pinhead for a period that is dependent upon the climate.  The ovaries will then develop into drupes in a rapid growth period that takes about 15 weeks after flowering.  During this time the integument takes on the shape of the final coffee bean.  After the rapid growth period the integument and parchment are fully grown and will not increase in size.  The endosperm remains small until about 12 weeks after flowering.  At this time it will suppress, consume, and replace the integument.

The remnants of the integument are what make up the silver skin.  The endosperm will have completely filled the cavity made by the integument nineteen weeks after flowing.  The endosperm is now white and moist, but will gain dry matter during the next several months.  During this time the endosperm attracts more than seventy percent of the total photosynthesizes produced by the tree.  The mesocarps will expand to form the sweet pulp that surrounds the coffee bean.  The coffee cherry will change color from green to red about thirty to thirty-five weeks after flowing. 

2.3 MAJOR GRADES OF COFFEE BEANS

A. Arabica Coffee

Arabica Coffee

 I. Washed Arabica - 'Plantation'      1. Plantation PB      2. Plantation A      3. Plantation B      4. Plantation C      5. Plantation Blacks      6. Plantation Bits      7. Plantation Bulk

  II. Unwashed Arabica - 'Arabica Cherry'      1. Arabica Cherry PB      2. Arabica Cherry AB      3. Arabica Cherry C      4. Arabica Cherry Blacks/Browns      5. Arabica Cherry Bits      6. Arabica Cherry Bulk

B .ROBUSTA COFFEE

  I. Washed Robusta 'Robusta Parchment'      1. Robusta Plantation PB      2. Robusta Plantation AB      3. Robusta Plantation C      4. Robusta Plantation Blacks/Browns      5. Robusta Plantation Bits      6. Robusta Plantation Bulk

  II. Unwashed Robusta 'Robusta Cherry'      1. Robusta Cherry PB      2. Robusta Cherry AB      3. Robusta Cherry C      4. Robusta Cherry Blacks/Browns      5. Robusta Cherry Bits      6. Robusta Cherry Bulk

  III. Monsooned Coffees      A. Arabica Monsooned Coffee          1. Monsooned Malabar AA          2. Monsooned Basanally          3. Monsooned Arabica Triage      B. Robusta Monsooned Coffee          1. Monsooned Robusta 'AA'          2. Monsooned Robusta Triage

  IV. Instant Coffee

  V. Ground Coffee

  VI. Roasted Seeds

  VII. Specialty Coffee      1. Monsooned Coffee      2. My sore Nuggets EB (Extra Bold)      3. Robusta Kaapi Royal

SPECIALITY COFFEE IN INDIA

Introduction

Specialty coffees are high quality coffees that differ from normal coffee with relevance to visual quality or cup or both. Specialty Coffees are getting increasingly popular in the world coffee market. Specialty coffees are broadly classified into five categories based on their unique features:

VARITIES

.

Monsooned coffee Monsooned coffee has a story to tell. The "Monsooning" of coffee first happened quite by accident in the deep of sailing ships - a shipload of coffee bound for Europe acquired a mellow yet unique taste en route, with the coffee beans 'swelling' due to the moisture in the air. A new kind of coffee was born - Monsooned Coffee.

Even today, India offers the same golden quality Monsooned Coffee. Prepared by the unique natural elements of yester years and the special process of today, the Monsooned Coffee still has the monsooned flavor, mellow taste and golden look. Consumers in Scandinavian countries love it for its special co lour and flavors.

Main grades:

Monsooned Malabar AAMonsooned Basanally Monsooned Robusta AA

My sore Nuggets Extra Bold

This coffee is a premium coffee that represents the best quality coffee from India. The beans are very large, uniform blush green in co lour with a clean polished appearance. In cup, the coffee exhibits full aroma, medium to good body, good acidity and fine flavor with a hint of spice

Arabica Plantation Coffee (Washed coffee) grown in the My sore, Coorg, Biligiris and Shevaroys regions.

Robusta Kaapi Royal This coffee is prepared from Robusta Parchment AB from the regions of my sore, Coorg, Wynad, Shevaroys, Pulneys and Barbabudans.

The beans appear to be bold, round with pointed ends and gray to bluish gray in co lour. This cup ensures full body, soft, smooth and mellow flavor.

WHY SPECIALITY COFFEE?

Today, consumers around the world demand the best coffee. Planters in producing countries are now developing finer strains of coffee to the custom-requirement of the gourmet coffee drinker.

In essence, over the years, coffee is no longer a humble bean of indistinct origin. Coffee today, is better valued as Specialty coffee. "Specialty'' spelt in the true-blue American manner!

Specialty coffee is distinguished by its clear origin, distinction made by careful cultivation practices, careful routine of plucking, special processing and of course, special branding and special handling and appearance thereafter.

Consumers have come to appreciate gourmet coffees in their discerning cups; As a result, specialty coffees fetch better prices, attract premiums and attract custom. These coffees have a personality, aura, craving, and branding of their own. Specialty branding that brings in the bigger bucks for the grower!

IMPORTANT VARITIES

Kent: Kent’s is the earliest variety of Arabica, selected by an English planter of the same name during the 1920s. This variety remained popular with the planting community till the 1940s, because it was less susceptible to rust. Today, it is grown in a few areas but it is still known for its exceptional cup quality.

S.795: This is by far the most popular Arabica selection released during the 1940s with high yields, bold beans, superior quality and relative tolerance to leaf rust. This selection was developed using ‘Kent’s’ Arabica, known for its high quality. Even today, the S.795 is a favorite with the planters and is a widely cultivated Arabica variety. S.795 has a balanced cup with subtle flavor notes of Mocca.

Cauvery: Popularly known as Catimor, Cauvery is a descendant of a cross between ‘Caturra’ and ‘Hybrids-de-Timor’. Caturra is a natural mutant of the famous Bourbon variety. Thus, Cauvery inherited the high yielding and superior quality attributes of Caturra and the resistance of ‘Hybrido-de-Timor’.

Sln.9: Selection 9 is a derivative of a cross between an Ethiopian Arabica collection, ‘Tafarikela’, and ‘Hybrido-de-Timor’. Sln.9 has inherited all the superior cup quality traits of Tafarikela. This variety has won the Fine Cup Award for best Arabica at the ‘Flavors of India - Cupping Competition 2002’ organized by Coffee Board of India.

2.4 FAIR TRADE & COFFEE AND ITS IMPORTANCE

WHY IS FAIR TRADE IS IMPORTANT TO COFFEE PRODUCING REGIONS?

Chapter 3

3.1 COUNTRY PROFILE---UNITED KINGDOM

Flag of United Kingdom

OVERVIEW OF UNITED KINGDOM

United Kingdom, constitutional monarchy in northwestern Europe, officially the United Kingdom of Great Britain and Northern Ireland. Great Britain is the largest island in the cluster of islands, or archipelago, known as the British Isles. England is the largest and most populous division of the island of Great Britain, making up the south and east. Wales is on the west and Scotland is to the north. Northern Ireland is located in the northeast corner of Ireland, the second largest island in the British Isles. The capital of the United Kingdom is the city of London, situated near the southeastern tip of England.

People often confuse the names for this country, and frequently make mistakes in using them. United Kingdom, UK, and Britain are all proper terms for the entire nation, although the term Britain is also often used when talking about the island of Great Britain. The use of the term Great Britain to refer to the entire nation is now outdated; the term Great Britain, properly used, refers only to the island of Great Britain, which does not include Northern Ireland. The term England should never be used to describe Britain, because England is only one part of the island. It is always correct to call people from England, Scotland, or Wales British, although people from England may also properly be called English, people from Scotland Scottish and people from Wales Welsh.

The United Kingdom is a small nation in physical size. At 244,110 sq km (94,251 sq mi), the United Kingdom is roughly the size of Oregon or Colorado, or twice the size of New York State. It is located as far north in latitude as Labrador in North America, but, like the rest of northern Europe, it is warmed by the Gulf Stream flowing out of the North Atlantic Ocean. The climate, in general, is mild, chilly, and often wet. Rain or overcast skies can be expected for up to 300 days per year. These conditions make Britain lush and green, with rolling plains in the south and east and rough hills and mountains to the west and north.

Despite its relatively small size, Britain is highly populated, with an estimated population density of 252 persons per sq km (652 per sq mi) in 2007. It is highly developed economically, preeminent in the arts and sciences, sophisticated in technology, and highly prosperous and peaceful. In general, British subjects belong to one of the more affluent states of Europe and enjoy a high standard of living compared to the rest of the world

ECONOMY OF UNITED KINGDOM

The United Kingdom has the fifth largest economy in the world in terms of market exchange rates and the sixth largest by purchasing power parity (PPP). It has the second largest economy in Europe after Germany.

The United Kingdom is one of the world's most globalised countries, ranking fourth in one recent survey. The capital, London (see Economy of London), is one of the three major financial centres of the world, along with New York City and Tokyo.

The British economy is made up (in descending order of size) of the economies of England, Scotland, Wales and Northern Ireland. The UK has been a member state of the European Union since 1973.

In the 1980s, under the Government of Margaret Thatcher, most state-owned enterprises in the industrial and service sectors, which since the 1940s had been nationalised, were privatised. The British Government now owns very few industries or businesses - Royal Mail is one example.

The UK Economy is the largest in Europe after Germany; at the same time it is also ranked as the fifth worldwide as per the market exchange rates, that is, in terms of GDP.

The GDP of the UK Economy grew by around 3 percent in the preceding fiscal (2006). London, the Capital UK is one of the most important centers of trade and commerce in the world along with New York City and Tokyo. The UK Economy is characterized by a free market involving a low taxation and regulation on the part of the administration.

United Kingdom (UK) is ranked 21st in the world in terms of population with 61.28 million people residing there in mid 2004. According to data obtained from UNDP HD Indicators, national growth rate in UK during the 1975-2002 was 0.3%. This was much lower than the high-income countries' growth of 0.6 %.

UK (United Kingdom) estimate of population density is 243 persons per sq km for July 2005. Almost 89% of the people live in urban areas and enjoy high life expectancy at birth of 77 years, according to (1997-2003) World Bank figures.

The UNDP 2004 report shows that 12.5% of UK's population lives below income poverty line (50% of median household income). All the people in UK enjoy access to an improved water source.

Gross primary enrollment, which denotes the percent of school-age population, is 101%, with both male and female enrolled equitably. Adult Literacy rate is 99%. UK is ranked 12th in 177 countries of the world in terms of human development index.

UK's labor force growth rate of 0.2% in last six years was lower in comparison to the other high-income countries' where workforce has grown at a rate of 0.7% during these years.

Unemployment rate was estimated to be 5.10 % in 2004.

The United Kingdom is the world's leading trading power and financial center. Over the past couple of decades, the government has greatly reduced public ownership and contained the growth of social welfare programs. The production of about 60% of food needs by 1% of the labor force indicates that agriculture is intensive, highly mechanized and efficient. The country is one of the leading industrial and exporting nations. Services, particularly banking, insurance, and business services, are gaining ground as their share is gaining ground in the national GDP. The economy of United Kingdom is the strongest in Europe and it is this relatively good economic performance that has complicated the government's efforts to join the European Economic and Monetary Union (EMU). A majority of Britons are opposed to the single currency as they feel they are doing well without any alliance.

The flag of United Kingdom has a blue field with a red cross of Saint George (patron saint of England) edged in white superimposed on the diagonal red cross of Saint Patrick (patron saint of Ireland), which is superimposed on the diagonal white cross of Saint Andrew (patron saint of Scotland.

The arts section of United Kingdom has a long drawn rich history of excellence. For centuries, arts and music were considered to be a part of nobility.

3.2MARKET OVERVIEW (FACT AND FIGURE)

Currency cy 1 Pound Sterling (£) = 100 pence (p)

Fiscal year 6 April – 5 April

Trade organizations

EU, BCN, WTO and OECD

Statistics

GDP (PPP) ranking (2006)

6th

GDP (PPP) per capita ranking (2006)

11th

GDP (PPP) (2006) $2.1 trillion

GDP growth rate (2007)

3.1%

GDP (PPP) per capita (2006)

$35,000

GDP (PPP) per square kilometer (2006)

$8,577,750

GDP per barrel (2005)

$3,400

GDP by sector (2006)

Agriculture (1%), industry (26%), services (73%)

Inflation rate on CPI (2006)

2.3% (2006)

Poverty rate (2002) 17%

Labor force (2006) 31m

Labors force by occupation (2006)

Services (81%), industry (18%), agriculture (1%)

Unemployment rate (2007)

5.4%

Main industries machine tools, industrial equipment, scientific equipment, shipbuilding, aircrafts, motor vehicles and parts, electronic machinery, computers, processed metals, chemical products, coal mining, oil production, paper, food processing, textiles, clothing, and other consumer goods

Trading Partners

Exports (2006) $470 billion

Main partners (2004)

USA 15%, Germany 11%, France 10%, Ireland 7%,Netherlands 6%, Belgium 6%, Spain 5%, Italy 4%

Imports (2006) $600 billion

Main partners (2004)

Germany 14%, USA 9%, France 8%, Netherlands 7%, Belgium 6%, Italy 5%, the People's Republic of China 4%, Ireland 4%

Public finances

Public debt / public sector net cash requirement (PSNCR) / public sector borrowing requirement (PSBR) (2006)

$39 billion

Public debt (2007 est.)[2]

$864 billion (36% of GDP) (2006)

Revenues (2006) $0.97 trillion

Expenses (2006) $1.04 trillion

Economic aid donor (2006)

$8 billion

FDI FROM UNITED KINGDOM

The United Kingdom continues to be the largest cumulative investor in India, and the third largest investor post-1991. Since 1993, almost 1800 new joint ventures / foreign collaborations between Indian and UK companies have been approved, at the rate of roughly 200 every year. British investment approved by India in 2002 was $375.9 million, well below the $1.11 billion in 2001. Approved FDI in 2003 reduced further, but actual inflows in this period increased substantially. Some major UK insurance companies commenced their operations in India in 2002. Leading British oil and gas companies, including British Gas, Shell and Cairns Energy, have announced plans to expand their operations and increase their investments in India. An increasing number of British companies are moving to India for setting up IteS/BPO operations.

FDI FROM INDIA

There has also been a surge of investments into the UK from India, which has moved into the top ten investors bracket (8th largest) in the UK in terms of number of projects, and the 2nd largest from Asia, creating a number of local jobs. Reliance Infocomm's $207 million acquisition of Flag Telecom and Wockhardt's £10.85 million acquisition of CP Pharmaceuticals were the two largest Indian investments in 2003. A majority of the other investments continue to be in the IT sector, including in an FDI pilot project in Wales .which specifically sought to attract Indian companies.

To date, over 450 Indian companies have established resident presence in the UK, out of which more than 75% are in the IT sector. The High Commission has consciously encouraged this trend. An "India Business Group" (IBG) comprising all Indian companies in the UK, created by the Indian High Commission in December 1999, holds meetings in the High Commission on a regular basis. It brings together senior executives and professionals of Indian companies in the UK, as also leading consultants and solicitors from British firms who advise clients on doing business in India and the UK. The interactive IBG meetings discuss business-related developments, as also problems, ideas and suggestions on how to improve trade, investment and business links between India and the UK. In December 2002, three sect oral core groups were created for focused targeting, one each on IT, Pharmaceuticals,Biotechnology&Healthcare,andInfrastructure&Finance.

BUSINESS OPPOURTUNITIES FOR UK COMPANIES IN INDIA

India is the UK’s 18th largest export market, and its second largest export market in the developing world after China. In 2004, the UK exported £3.05bn of goods and services to India. In 2005 the UK exported £3.9bn of goods and services to India.

India is designated one of UKTI's High Growth Markets; details of the High Growth Markets Programme is available in Related Content.

What are the opportunities?

India’s economy is one of the fastest expanding in the world, with a  rapidly expanding consumer class. The UK has strong ties with India, and UK companies are well positioned to take advantage of this growing export and investment market.

Liberalization of the economy continues apace, with trade barriers largely removed and the peak tariff down from 350% in 1991 to 20% in 2005. Privatization programmes are gradually reducing the still-significant role of the public sector in the production and consumption of goods.

There are 16 broad sectors in which proactive UK companies can increase their profitability and international competitiveness:

Aerospace (civil) Automotive Agribusiness Biotechnology and pharmaceuticals Construction Creative and media Education, skills and leisure Engineering Environment Financial and legal services Healthcare and medical ICT Oil and gas Power Transport Water

India is one of the largest recipients of Foreign Direct Investment in the world, receiving $3.75 billion in 2004-2005.

BUSINEE OPPOURTUNITIES FOR INDIAN COMPANIES IN UK

India is the fastest growing market economy in the world. The rapid economic reform underway in India offer tremendous potential for UK companies. The UK has long established links with India. the UK is the one of the largest economy in the world. And there is a wealth of opportunities available to Indian exporters.

The UK is the major export market for India. India is UK’s largest export market in the developing world.

BUSINESS OPPOURTUNITY TO INDIA IN UK

Jewellery & precious stone

Paper and stationary

Sports goods

BPO/KPO

Biotechnology

Food products

Tea and Coffee

Tourism

Finance

Information technology

Film, TV, Media

3.3 INDIAN EXPORTS OF COFFEE TO UK

Department of Commerce Export Import Data Bank

Export: Commodity x Country - wise

Commodity:  0901

COFFEE, WHTR/NT ROASTED OR DECAFFIENATED; COFFEE HUSKS & SKINS; COFFEE SUBSTITUTES CONTAINING COFFEE IN ANY PROPORTION

Country:  U K

S.No. \Year2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

1. Values in US$ Million 0.85 1.20 1.48 1.63 1.53

2. %Growth   41.46 23.49 9.92 -5.77

3. Total export of commodity 146.32 162.42 169.57 254.05 316.22

4. %Growth   11.00 4.40 49.82 24.47

5. %Share of country (1 of 3) 0.58 0.74 0.87 0.64 0.48

6. Total export to country 2,496.41 3,023.25 3,681.09 5,059.28 5,613.63

7. %Growth   21.10 21.76 37.44 10.96

8. %Share of commodity (1 of 6)

0.03 0.04 0.04 0.03 0.03

 Exchange rate: (1US$ = Rs.)

48.3953 45.9516 44.9315 44.2735 45.2849

INDIA’S TOTAL EXPORT/IMPORT TO UK

Department of Commerce Export Import Data Bank

Country - wise

Dated:23/4/2008 Values in US$ Million

Country:  U K

S.No. \Year 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

1. EXPORT 2,496.41 3,023.25 3,681.09 5,059.28 5,613.63

2. %Growth   21.10 21.76 37.44 10.96

3. India's Total Export 52,719.43 63,842.55 83,535.94 103,090.54 126,262.68

4. %Growth   21.10 30.85 23.41 22.48

5. %Share 4.74 4.74 4.41 4.91 4.45

6. IMPORT 2,777.01 3,234.33 3,566.20 3,930.30 4,171.21

7. %Growth   16.47 10.26 10.21 6.13

8. India's Total Import 61,412.13 78,149.11 111,517.44 149,165.73 185,604.10

9. %Growth   27.25 42.70 33.76 24.43

10. %Share 4.52 4.14 3.20 2.63 2.25

11. TOTAL TRADE 5,273.42 6,257.58 7,247.29 8,989.58 9,784.85

12. %Growth   18.66 15.82 24.04 8.85

13. India's Total Trade 114,131.56 141,991.66 195,053.38 252,256.27 311,866.78

14. %Growth   24.41 37.37 29.33 23.63

15. %Share 4.62 4.41 3.72 3.56 3.14

16. TRADE BALANCE     114.90 1,128.98 1,442.42

17. India's Trade Balance -8,692.70 -14,306.55 -27,981.49 -46,075.19 -59,341.42

  Exchange rate: (1US$ = Rs.) 48.3953 45.9516 44.9315 44.2735 45.2849

3.4 VOLUME AND VALUE OF COFFEE EXPORT FROM INDIA

3.5 AREA AND PRODUCTION OF COFFEE

State-wise Production (2007-08 post monsoon and post blossom forecast) in metric tonnes

State/District

Post Monsoon Estimation 2007-08

Post Blossom Estimation 2007-08

Arabica Robusta Total Arabica Robusta Total

Karnataka            

Chikmagalur 36,300 27,400 63,700 39,000 32,100 71,100

Coorg 24,750 83,950 108,700 26,000 89,250 115,250

Hassan 12,900 6,275 19,175 17,000 8,900 25,900

Sub total 73,950 117,625 191,575 82,000 130,250 212,250

             

Kerala            

Wyanad 25 40,300 40,325 75 47500 47575

Travancore 675 6,000 6,675 675 6,900 7,575

Nelliampathies 600 1400 2000 600 1400 2,000

Sub total 1300 47700 49000 1350 55800 57150

             

Tamilnadu            

Pulneys 7575 425 8000 7600 400 8000

Nilgiris 1675 3175 4850 1700 3200 4900

Shevroys (Salem) 3150 0 3150 3100 0 3100

Anamalais (Coimbatore) 1650 450 2,100 1600 475 2,075

Sub total 14050 4050 18100 14000 4075 18075

             

Non Traditional Areas            

Andhra Pradesh & Orissa 3100 65 3175 3325 65 3390

North Eastern Region 90 60 150 75 60 135

Sub Total 3,200 125 3,325 3,400 125 3,525

             

Grand Total (India) 92,500 169,500 262,000 100,750 190,250 291,000

HOLDINGS

Area and share of production of coffee under different coffee holdings in India 2003-04

Sr. No.Size of Holdings

(In Hectares)No. of Holdings Area under coffee

Share of productionNumber % to Total Area (in Ha) % to Total

I Small Holdings          

  < 2 138209 77.5 122391 34.49  

  2 - 4 26549 14.9 67155 18.93  

  4 - 10 10717 6.0 65386 18.43  

  Total 175475 98.4 254932 71.84 60%

             

II Large Holdings          

  10 - 20 1734 1.0 28808 8.30  

  20 - 40 537 0.3 14505 4.18  

  40 - 60 208 0.1 10025 2.89  

  60 - 80 126 0.1 9136 2.63  

  80 - 100 61 0.0 5863 1.69  

  Above 100 167 0.1 31571 9.10  

  Total 2833 1.6 99908 28.79 40%

III Total (India) 178308 100.00 354840 100.00 100%

Chapter 4

4.1 GOVERNMENT INITIATIVES FOR INDIAN COFFEE GROWERS

EXPORT REGISTRATION & ISSUE OF REGISTRATION - CUM - MEMBERSHIP - CERTIFICATE (RCMC)

An exporter may, on application, register with Coffee Board as one of the members of Registered exporter of Coffee. On being registered, the applicant shall be granted a certificate of Registration & on request RCMC shall be issued which will be valid for 5 years ending 31st March of the licensing year, unless otherwise specified. Application for registration may be cancelled on payment of Rs 100 towards cost of Application.

ISSUE OF EXPORT PERMITS & CERTIFICATE OF ORIGIN

Coffee Board issues Export permits under Rule 44(2) Coffee Act 1942 amended from time to time along with Certificate of Origins to the registered exporter of coffee against application, for coffee export.

FURNISHING POST-SHIPMENT DOCUMENTS

The registered exporter shall submit the post-shipment documents on export of coffee against each export permits obtained by them. The post-shipment documents viz., copies of export permits, bill of lading with on Board Date Seal and certificate of origin duly endorsed by the concerned Customs Authorities, along with other details viz FOB value etc, shall be submitted to the Coffee Board within 45 days from the date of issue of export permits

INTIMATION REGARDING CHANGE IN CONSTITUTION

In case of change in ownership, constitution, name or address of an exporter shall be intimated voluntarily within one month from the date of such change

DE-REGISTRATION

The registering authority may de-register the registered exporter of coffee for violation of the terms & conditions of registration, after observing norms in this regard. However, the exporter may appeal against their de-registration with the registering authority

OTHER INFORMATION

Providing commercially useful information & assistance to the registered exporter in their developing and increase coffee exports.Offer professional advice such as quality up gradation, standards & specifications of types & grades of coffee and its innovation etc.Organize visits of delegations of its members abroad to explore oversea market opportunity.Organize participation in Trade Fairs exhibitions & buyer - seller meets in India and abroad Other than the above, the Board implements the facilities extended under EXIM POLICY by the Govt. Of India on coffee

IMPORTANT CIRCULAR

QMS

The QMS or Logo scheme has been framed in order to protect the Image and Quality of Indian Coffee in the International Market and to gain the confidence of the overseas buyers. The Board has framed the Quality Marking Scheme w.e.f. 24/11/2000 for issue of Logo Certificate for export of coffee to those who voluntarily opt for the Scheme, for the Coffee cured by the Certified Coffee Curing Works

EPA

Coffee exporters can file for application for Export Permits and Certificates of Origin on the Internet.

ICB Grading Standards

Coffee Board issues Export Permits for export of coffee only to the Specified Types and Grades of coffee

4.2 SCHEME FOR COFFEE GROWER IN INDIA

Role of coffee board under National Programme For organic production

The coffee board has been representing the standing-cum-accreditation committee’ since 1994 and steering committee (NSC)”as well. Under the NPOP, the coffee board has been identified as an “Accreditation Agency” (AA) for the development and promotion of organic coffee in the country. As Accreditation Agency board Accredited three inspection and certification agency under National Programmee for organic production (NPOP) viz, M/S IMO, Bangalore, M/S. SKAL, Bangalore, and M/S APOF, Bangalore.

INCENTIVES SCHEME FOR ORGANIC COFFEE GROWER

NEW DELHI: In a view to increase productivity and quality of tea and coffee, the government has chalked out schemes, which will implement during the XI Five Year Plan.

An amount of Rs 230 crore has been approved for Tea Quality Up gradation and Product Diversification scheme that envisages payment of subsidy @ 25 percent of the actual cost of machinery for modernization of the processing factories by replacement of old & worn out machinery, a Commerce Ministry release said.

Besides it would further go through the value addition by way of creating additional infrastructure for cleaning, blending, co lour sorting and packaging

In the case of machinery for orthodox tea in 100% CTC factories and new factories set up by Self Help Groups the subsidy @ 40 percent would be provided

Besides subsidy @ 50 percent of the certification fee would be provided for ISO/HACCP and organic tea certification.The production of orthodox tea will have a subsidy @ Rs. 3/kg of annual production of leaf grade and Rs. 2/kg for dust grades and an additional incentive @ Rs. 2/kg of the incremental volume over the previous year, it said.The government has approved the of “Development Support for Coffee” for implementation during the XI Five Year Plan by Coffee Board with an outlay of Rs. 310 crore.

The release said that the scheme is aimed to provide support to coffee growers to improve farm productivity by way of replanting senile blocks; to support water augmentation, quality improvement of the product to augment growers realizations and pollution abatement; to support coffee development in North East Region and in non-traditional areasDuring the XI plan the total plantation targeted for replantation is 40,000 hectares where subsidy will be provided @ 25 percent, 30 percent and 40 percent to the coffee growers having holdings of more than 10 hectares, 2-10 hectares and upto 2 hectares respectively. Out of Rs. 310 crore, Rs. 100 crore will be spent for replantation programme

4.3 MAJOR COMPETITOR TO INDIA

BRAZIL (largest coffee producing nation)

VIETNAM

GUATEMALA

MEXICO

ETHIPIOPIA

COLUMBIA

EL-SALVADAR

PERU

KENYA

TANZANIA

CAMERAN

UGANDA

4.4 MAJOR COFFEE MARKET AND CONSUMPTION IN INDIA

Exports of Coffee from India by Countries – FY 2006/2007 * (Quantity, Percentage and Unit Value)

Sl No Destination Quantity (In MT) % to Total Unit Value Rs/Tonne

1 ITALY 62786 25.25 74748

2 RUSSIAN FEDERATION 27288 10.97 88962

3 GERMANY 21835 8.78 87434

4 BELGIUM 13989 5.63 78011

5 SPAIN 11091 4.46 68023

6 SLOVENIA 8049 3.24 63314

7 UKRAINE 6962 2.80 97271

8 FINLAND 6147 2.47 83252

9 GREECE 6023 2.42 67329

10 FRANCE 5837 2.35 78823

11 JAPAN 4644 1.87 94438

12 ALGERIA 4294 1.73 62556

13 U.S.A. 4232 1.70 89392

14 PORTUGAL 3603 1.45 77176

15 ISRAEL 3549 1.43 75836

16 KUWAIT 3452 1.39 106978

17 NETHERLANDS 3445 1.39 88562

18 Australia 3389 1.36 82364

19 SWITZERLAND 3200 1.29 92844

20 SINGAPORE 3091 1.24 74150

21 CROATIA 3075 1.24 67982

22 JORDAN 2980 1.20 89358

23 HUNGARY 2947 1.19 71684

24 EGYPT 2698 1.08 68968

25 LATVIA 2354 0.95 107102

26 UNITED ARAB EMIRATES 2029 0.82 112196

27 CANADA 1850 0.74 71372

28 TAIWAN 1740 0.70 70703

29 LIBYA 1585 0.64 69670

30 MALAYSIA 1560 0.63 70446

31 SYRIA 1383 0.56 84917

32 SAUDI ARABIA 1346 0.54 118631

33 UNITED KINGDOM 1144 0.46 109991

34 ROMANIA 1127 0.45 68308

35 POLAND 1119 0.45 75610

36 NORWAY 056 0.42 82388

37 KOREA, REPUBLIC OF 1030 0.41 67854

38 CHINA, PEOPLE’S R/O 959 0.39 66590

39 AUSTRIA 849 0.34 71449

40 LITHUANIA 765 0.31 102445

41 SULTANATE OF OMAN 676 0.27 71866

42 SOUTH AFRICA 630 0.25 132456

43 BULGARIA 538 0.22 65272

44 OTHERS 6344 2.55 91487

TOTAL 248687 100.00 82732

COFFEE CONSUMPTION IN INDIA

Estimated Domestic Consumption (1991 - 2005)

Calendar Year Quantity (in MT)

1992 55000

1993 55000

1994 55000

1995 55000

1996 55000

1997 55000

1998 55000

1999 55000

2000 55000

2001 60000

2002 64000

2003 68000

2004 70000

2005 75000

2006 80200

Chapter 5

5.1INDIA—UK BILATERAL TRADE

Relations between India and the United Kingdom encompass a wide range of political, economic, cultural and other dimensions. The intense and regular political dialogue at all levels has been spearheaded by an unprecedented four Prime Ministerial meetings in a space of twelve months, between October 2001 and October 2002.

UK has firmly emerged as India's second largest trading partner after the USA, and the largest in Europe. Trade has grown steadily since the Indo-British Partnership was formed in 1993, and has been particularly impressive in 2003. Business and industry linkages have also grown significantly. While UK remains the largest cumulative investor in India, recent years have also seen a surge of investments into the UK from India, particularly in the IT sector. India is now the second largest investor in the UK from Asia in terms of number of projects, and the eight largest overall.

The 'Delhi Declaration' signed by the two Prime Ministers on 6th January 2002 focuses, inter alia, on matters pertaining to bilateral trade and economic relations also. As mandated in this Declaration, the Confederation of Indian Industry (CII) and the Confederation of British Industry (CBI) held a Summit in London in July 2002, which brought together a wide cross-section of companies at the highest level of business representatives. A 10-point plan of recommendations emerged from this Summit, the principal aim of which is to double the Indo-UK bilateral trade by 2007 and strengthen the environment for foreign direct investment.

High-level Exchanges

A string of high-level visits over the past few years from both sides, focused on economic and commercial matters, have also spurred bilateral interactions and economic linkages. Meetings of the India-UK Round Table have provided valuable inputs and recommendations. The India-UK Joint Working Group on Science & Technology held its fourth meeting in New Delhi in March 2004. Several Indian State governments and sector-specific industry delegations have also held extensive meetings and road shows in the UK. Business delegations from Northern Ireland now travel to India every year, as also business delegations from Wales.

    Calendar of Events 2002    Calendar of Events 2003    Calendar of Events 2004    Calendar of Events 2005    Calendar of Events 2006    Calendar of Events 2007    Calendar of Events 2008

The India-UK Round Table, a non-governmental body set up in 2000 to make recommendations on development of bilateral relations in all spheres, held its 6th Meeting under the Co-Chairmanship of Shri K. C. Pant and Lord Paul in London from 7-9 May 2003. The 7th Meeting was held in Kolkata on 10 January 2004.

Bilateral Trade

The UK continues to be India's second largest trading partner after the USA, and the largest in Europe. By 2000, India-UK trade in goods and services was almost £5 billion, with trade in goods totaling £3.7 billion. On account of the slowdown in the global economy, total trade in the following two years stagnated, mainly because of a fall in British exports.

Trade performance in 2003 has been impressive, with a strong increase of 30.6% in UK's exports to India, totaling £2.291 billion and reversing the two-year decline. India's exports to the UK also grew to £2.076 billion, an increase of 15.8%. Both figures are the highest-ever in bilateral goods trade, and the total of £4.367 billion is a 23.1% increase over 2002. This is significant, especially considering that UK's overall increase in export of goods in 2003 was only 0.7%, and expansion in goods imports was less than 0.5%. It also means that exports of goods to India now account for 1.22% of UK's total, compared to only 0.94% in 2002, and India has gone up one place to become UK's 15th most important export market. India's share in UK's total import of goods has also gone up to 0.89%, as against 0.77% in 2002.

5.2 Bilateral Merchandise Trade (in £ million)

Calendar Year UK's Exports to India UK's Imports from India Total Trade India's Balance of Trade

1999 1450 1426 2876 -24

2000 2058 1651 3709 -407

2001 1797 1824 3621 +27

2002 1754 1793 3547 +39

2003 2291 2076 4367 -215

Source: UK Office of National Statistics

UK's main imports from India are: textiles and readymade garments, gems and jewelers, footwear, leather and leather goods, engineering goods, metal manufactures, power generating equipment, software services, pharmaceuticals, chemicals, marine products, rice, tea and other agricultural products like nuts and preserved fruits and vegetables. India's imports from the UK include: non-ferrous metals, gold, rough diamonds, power generating and telecom equipment, transport equipment, industrial machinery and chemicals.

Among the sectors that have been identified for focus in the sphere of bilateral trade are:- i) Goods - engineering goods, textiles, gems and jewellery, natural stone, marine products, chemicals, rice, processed foods, alcoholic beverages, non-GM produce like soya, and pharmaceuticals including complementary medicine; and ii) Services - software, biotechnology (R&D, information exchange and product development), healthcare and media.

INFORMATION TECHNOLOGY

United Kingdom and India have emerged as major partner countries for each other in the Information Technology sector. UK companies realize the benefits of outsourcing to India, which has become the preferred global hub for software development and Business Process Outsourcing. Tie-ups between the UK and Indian IT enterprises lend the former substantial benefits not only in terms of lower costs but also in the quality and speed of marketing as well as establishing platforms for building new businesses. A large number of Indian IT companies have substantial operations in the UK. There have also often been skill shortages in the UK and Europe in the IT sector, which are filled to a substantial extent by Indian professionals. There are some fears of job losses on account of outsourcing to India, but the reality is that the UK economy is growing strongly and the employment situation, including in call centers, has never been better.

NASSCOM opened its UK Chapter in September 2003, the first such overseas. It also has a Memorandum of Understanding with its British counterpart trade association Intellect, and also with the Welsh Development Agency, which has now been a Platinum Sponsor of NASSCOM's Annual Conference for many years. In association with the Financial Times, NASSCOM also holds a prestigious annual conference in London on Outsourcing to India.

BIOTECHNOLOGY HEALTHCARE

Biotechnology has been identified as one of the main areas for enhanced cooperation. Leading Indian biotechnology companies are collaborating with clients across the UK and Europe. Astra Zeneca has established an R&D Center in Ban galore. GlaxoSmithKline and Ranbaxy have signed an agreement for joint research and development. Industry delegations from both countries have visited each other regularly.

Healthcare is another potential area of cooperation. India already supplies doctors and nurses in substantial numbers for UK's National Health Service. Indian pharmaceutical companies also market their products and have even invested in production facilities in the UK. UK is also a source for medical equipment. The Indian Healthcare Federation comprising top Indian private sector healthcare organizations and super-specialty hospitals visited the UK in September 2003 to explore potential partnerships and opportunities.

5.3 UK's Trade with India (2007)(In £ million)

Total 2001 2002 2003 2004 2005 2006 2007 (Jan.-Aug.)

Exports of goods

1772 1755 2284 2235 2798 2695 1900

Imports of goods

1816 1804 2093 2290 2783 3136 2502

Total Trade in Goods

 3588 3559 4377 45255581 5831 4402

 Source: DTI Economics & Statistics Directorate, UK

Bilateral trade

25. The important facts here are:

UK is India’s fifth largest trading partner accounting for 3.56% of India’s total foreign trade in goods in 2005-06.

India is UK’s 18th largest export market and the largest in the developing world (ahead of China). Bilateral Trade turnover in 2006

Trade in goods:        £ 5.8 bnTrade in services:     £ 2.9 bnTotal trade:              £ 8.74 bn

The balance of trade is currently in India’s favor.

India’s main exports to the UK are petroleum crude & products, engineering goods, ready made garments, textiles, gold jeweler, footwear, marine products, rice and agricultural products etc.

Major exports from the UK are uncut diamonds, metal scrap, iron, chemicals, machinery, transport equipment, scientific equipment etc.

The UK is the largest market in Europe for Indian IT services. British companies have off-shored work to India (about 30) and created over 60,000 jobs. British businesses are estimated to save upwards of £1 billion every year due to off shoring, the bulk of which is accounted for by India.

Bilateral merchandise trade statistics are presented in the table below:(In £ million)

Year UK Exports to India

% Change UK Imports from India

% Change Total % Change India's Balance of Trade

2000 2058 +41.9% 1651 +15.8% 3709 +30% -407

2001 1772 -13.8% 1816 +10.0% 3588 -3.2% +44

2002 1755 -1.0% 1804 -0.66% 3579 -0.25% +29

2003 2284 +30.1% 2093 +16.1% 4377 +22.29% -191

2004 2235 -2.18% 2290 +9.41% 4525 +3.8% -55

2005 2798 +25.1% 2783 +21.52% 5581 +23.33% +15

2006 2695 -3.6% 3136 +12.68% 5831 +4.48% +441

2007 (Jan-Sept) 2062 -26.2% 2719 -13.29% 4781 -18% +657

(Office of National Statistics and Overseas Trade Statistics, HM Customs & Excise)

Bilateral trade in Services is presented in the table below. (In £ million)

Year UK Exports UK Imports Total % change India's Balance of Trade

2001 664 816 1480 + 21.81% +152

2002 623 808 1431 - 3.31% +185

2003 605 810 1515 + 5.87% +105

2004 981 1095 2076 + 37.02% +114

2005 1146 1311 2457 + 18.06% +165

2006 1424 1485 2909. +18.68 +61

PRODUCTION

Brazil is world leader in production of green coffee followed by Vietnam and then Indonesia

Top Ten Green Coffee Producers — 2005

Country Production (Int $1000) Footnote Production (MT) Footnote

 Brazil 1,781,684 C 2,179,270

 Vietnam 809,384 C 990,000 *

 Indonesia 622,986 C 762,006

 Colombia 558,050 C 682,580

 Mexico 254,148 C 310,861 F

 India 224,829 C 275,000

 Ethiopia 212,566 C 260,000 F

 Guatemala 177,084 C 216,600 F

 Honduras 155,860 C 190,640

 Uganda 152,066 C 186,000 FNo symbol = official figure = FAO estimate, * = Unofficial figure, C = Calculated figure;

Production in Int $1000 have been calculated based on 1999-2001 international pricesSource: Food And Agricultural Organization of United Nations: Economic And Social Department: The Statistical Division

Chapter 6

SWOT ANALYASIS

STRENGTH

Aabica and Robusta are two distnict categaries of coffee beans which are cgrown in large amount that in turn account for the economic growth of the country.

India exports about 70% of its total produce.

India has Italy, Russia, Belgium, Spain, UK, as its export destination serving them with better quality of beans.

Many distinct agro-climate zones & varities suitable for production of high quality speciality coffee.

India is world’s fifth largest producer of coffee producing around 3 lakh tonne annaually.

fair trade coffee also adds up to india’s strength by providing small producers will enough returns on selling their coffee beans.

Indian coffee is considered to be one of the most stimulating coffee in the world, being mild in nature i.e having a low acid content.

India is only country which grew of its coffee under shade.

WEAKNESSES

The domestic consumption is increasing at faster rate.

High percantage of marginal, small & tribal growers who are valuable to price fluctuations in coffee and intercrop.

Poor economic condition of marginal, triabl growers to make investments for quality improvement.

Failure of small coffee growers to form co-operatives/groups that would help them in producing “quantity with quality” negotiate prices for their products & move up in the value chain.

OPPOURTUNITIES

Massive consumer base with good purchasing power for promoting coffee consumption within the country. this provides an oppourtunity for the coffee growers to enter upstream in the value chain.

The competitive prices provided to the exporters would create new oppourtuties for better economic prospects.

great scope for promoting eco-tourism, leissure & adventure tourism in coffee hills, to improve the overall economic conditions of the coffee areas.

Barista coffee shops also provides consumers with much better quality of coffee all around the world. Thus adding up further oppourtunity for indian growers and exporters.

There is great oppourtunities for coffee growers to take due advantage of th government initiatives & coffee board schemes to boost up the volume of exports to the emerging trade destinations such as UK.

THREATS

India poses threat world’s leading players in coffee i.e Brazil, due to competitive prices it has a cutting edge over india in exports of coffee and its beans.

Emerging of new origin with high efficency & low production costs, has greatly affected the prices not only of coffee but also of various other plantation crop grown in coffee estates as intercrop

example, pepper, cardamom, vanilla etc. presently, The prices of main crop coffee & various intercrop remain economical thus enabling the growers to sustain their livelihood & plantation

If the prices of coffee & other intercrop fall to uneconomica levels, then the growers may adanden their plantation, thus having an adverse affect on the environment.

Chapter 7

DISCUSSION AND FINDINGS

India being the 5th largest coffee growing nation in the world, has a good market share in exporting to different regions. The two basic beans Arabica and Robusta are of great economic importance to the country. Arabica accounts for about 70% of the world’s coffee production. Robusta coffee trees represent about 30% of the world market.

The major coffee producing areas in India such as Kerala, Tamil Nadu, Karnataka, & Non Traditional areas like Andhra Prades, Orissa also has coffee producing capacity to reach economic benefit.

Coffee Board is providing financial assistance ( grant ) to organic coffee growers towards the cost of inspection and certification of organic coffee. The eligibility norms for providing financial assistance as follows…

The grower/growers association/SHG’S, having to produce organic coffee as per the Natioanl Standards of ( NSOP ) organic production.

The coffee should have been certified by an accredited inspection and certification agency recognized under National Programe for Organic Production ( NSOP ).

In case of the help groups, growers association/cooperative and NGO’S they should have been registered under cooperative societies Act or societies Registration Act of their respective states.

For financial assistance towards Inspection and certification cost will be released only after evaluation of application by coffee board.

India annually exports ( 201498 ) tons of coffee annually to around 44 countries across the globe with Italy( 26.5% ), Russian Federation ( 14.61% ), Germany ( 8031% ), Belgium ( 5055% ), spain ( 5.11% ) being the top 5 destination for indian coffee.

India and UK have bilateral trade relation to enhance the return in near future. India UK Joint Economic Trade Committee ( JETCO ) would be kry instrument in further strengtheninig trade and economic cooperation between the two countries.

The excellent growth in the India UK bilateral trade and investment, and JETCO would help identify oppourtunity for ever greater growth in this relationship emphasising that JETCO working groups on transfer of technology and investemt in the food processing sector in India. A working group on legal services already exist under the JETCO to examine the requirement of Non- practice legal advisory services for enhancement of bilateral trade and investment.

Thus, there is potential of increased exports of coffee & coffee beans in near future as the trade relation between the two strengthens.

Chapter 8

RECOMMENDATION AND CONCLUSION

The coffee growing areas cannot profitably be converted into alternate agriculture activities due to pecuniar conditions prevailing in the coffee areas, coffee plantation are vital for thr survival of the eco-system in the ecologically sensitive.

Western ghat which is recognized as one of the biodiversity hotspots of the world. Coffee is also ideally suited and already established as an important crop for afforestation of eastern ghat, which suffer from “shifting cultivation” practices adopted by native tribel, people. The shade grown conditions prevailing in the coffee plantation, offer goog scope for diversification with many intercrop. The onlt non- coffee activities that could be promoted is eco-tourism. Thus, the diversifiaction initiative should be within the coffee plantation rather than from coffee.

On the vertical diversifiacation front, there is a very good scope for improving the returns to the growers through value addition.

Chapter 9

BIBLIOGRAPHY

Important Books

1. foreign trade policy and procedure—DGFT Delhi2. Exporters handbook—B. Bhattacharya

WEBLIOGRAPHY

www. Commerce.nic.in

www.dgft.nic.in

www.coffeeboard.com

www.wikiepedia.com

international coffee organisation

European coffee federation

SEARCH ENGINE

www.google.com