India’s poultry production has been growing about 8-10 per cent annually over the past decade and more than 15 per cent over the past three years, according to an ICRA assessment. USDA’s official projection for 2012 is 2.75 million tons; unofficial projections are as high as 3.2 million tons. Indian poultry and egg consumption is growing and is expected to double by 2014-2015 due to an expanding middle class, increasing employment levels and incomes, new demand for ready-to-cook products, and the growing presence of affordable quick service restaurants.

Indian broiler production is highly integrated and concentrated in the states Tamil Nadu, Andhra Pradesh, Maharashtra, Karnataka, and West Bengal. The formal sector contributes nearly 85 per cent of the total output. Sources estimate 90 per cent of Indian poultry is sold live and most slaughter and processing are done manually at the retail level. The processed poultry production sector is small and growing at a lower rate than the live-bird market. The processed poultry market is mainly oriented to serving hotels, restaurant and institutional consumers. In 2010 the Ministry of Food Processing Industries estimates the level of processing is only 6 per cent of poultry products.

India lacks basic infrastructure like a cold chain, transport, processing facilities and storage for fresh and frozen poultry meat. The Indian Ministry of Food Processing Industries (MOFPI) is administering a scheme for technology upgrading, establishment and modernization of processing plants. MOFPI launched the scheme "to provide integrated and complete cold chain and preservation infrastructure facilities without any break, from the farm gate to the consumer."

The consumers’ preference for live poultry can be attributed to the belief that live poultry is disease free, fresher and more hygienic than processed chicken. In addition to inadequate cold chain infrastructure, poultry producers face few retail options for poultry products due to consumers’ price sensitivity, customer resistance to commingled vegetarian and non-vegetarian products, and the general perception that live poultry is superior in quality.

Middle class households are the fastest growing segment of the population. With increased incomes and urbanization, people prefer to go for non-vegetarian diets. There is a new demand for ready-to-eat production and affordable quick service restaurants. Preference for poultry meat over other meats is due to year round availability throughout the country, relatively low prices, and cultural and religious non-preferences for pork and beef. Local dietary practices tend to prefer vegetarian protein sources, even among non-vegetarian consumers. Although total consumption is estimated to double by 2014-15, per capita consumption of meat and eggs will not necessarily double when factoring in population growth.

Growth in the layer industry is being driven by increasing demand for higher quality, lower cost protein. Industry sources estimate the layer industry growing at about 6 per cent annually, with per capita CY 2012 egg availability forecast at 57 eggs annually, compared with 51 eggs per year in CY 2011.

Imports and exports of broiler meat are almost nonexistent. Although there are no quantitative restrictions on imports of poultry meat, restrictive sanitary import regulations and high tariffs prevent US poultry and poultry product exports to India, and prevent almost all imports from other origins. India prohibits the import of poultry products from countries reporting either low pathogenic or high pathogenic notifiable avian influenza. Also, a lack of cold chain facilities and Indian consumers’ preference for live birds limit marketing opportunities for frozen poultry.

India’s poultry exports are confined to table eggs, egg powder and SPF egg shipments to markets in Asia, Africa and the Middle East. Poultry meat exports are limited due to high production costs, insufficient marketing infrastructure and limited processed poultry production.

In 2009, India amended the avian influenza rule to allow imports of processed poultry products subject to a "conformity assessment." Trade data indicates that India’s imports of processed poultry products are nil and as of this time, the US is unable to export processed products to India under the requirements in the conformity assessment. Several US Senators have requested US Trade Representative Kirk to explain "the important biosecurity measures that have been implemented in the US and that the continued use of non-scientifically based measures to prevent trade is unacceptable."

Source: USDA FAS GAIN Report; USDA ERS; Ministry of Food Processing Industries, Government of India; news wires; ICRA, www.icra.in