Indian Nutra Sector: An Exploration of Opportunities & Challenges for the Expansion of the Sector in India
Check out which sectors are going to contribute to achieve this praise worthy target of economic expansion for India?
India’s Long-pending Role in Preventive Care
India played a pivotal role in the establishment of clinical nutrition and preventive health sustenance in the world. India gave the world Ayurveda which took a backseat due the lack of readiness on India’s part to focus on its development as a supreme science of health and vitality. While India lost focusdue to a heavy stream of foreign invasions in the 1900s on the other side the western world gained momentum in its quest for a golden health pill which started the Vitamania.
The discovery series were inspired by the philosophies of pharmaceuticals basic to the molecular reductionist methodology together with clinical validation methodologies. This led to the convergence of allied fields like, chemical engineering, biotechnology, pharmaceutical technologies, agrotechpowering thebeginning of nutraceuticals – a novel discipline comparatively lesser known for its long term health influence. The market of USD 387 billion market commandeda unified global support to the field. Currently, the global nutraceutical market is growing at 8% per annum with the UnitedStates of America commanding 60% of the market share. Nutraceuticals is going to expand with time from the ‘want’ of preventive health care to the ‘need’ generated in the recent few years. In India, the nutraceuticals market is going to be a credible industry contributing to the economic growth of the country.
Indian Potential of the Nutraceuticals Market
India has 108 large contract manufacturers in nutraceuticals but none are able to tap into international projects. The Indian economy is expected to touch USD 10 trillion as a market by 2030, which is a quadrupling growth.
Which sectors are going to contribute to achieve this praise worthy target of economic expansion for India?
In India 840 million people are calorific sufficient but still malnourished. A rapid and unmonitored growth of a USD 10 trillion industry would expose the economy to the new and unknown challenge of the management of lifestyle diseases that would spring up without controls. However, due to the demand for the needs of the population size, information access, increase in spending power and the awareness to maintain healthy lifestyles is going to push the nutraceuticals market in India to achieve robust growth, at least for a few decades to come. Presently the Indian nutritionals/nutraceutical business is USD 9 billion and steadily growing at 12% per annum. The growth is definitely noteworthy.
The question is whether India equipped to hone and supply high quality, clinically validated nutraceuticals? Secondly, what equity does it have in the field of formulated products and ingredients internationally?
Most of the Indian nutraceutical companies operate on the “cookie cutter” model. India’s export in nutraceuticals is below USD 1.6 billion(both, ingredients and formulations together). That’s insignificanteven-handedness inthe global nutraceuticals market of USD 387 billion. India imports active ingredients and formulated nutraceuticals of USD 2.8 billion.
To expand India as nutraceutical hub and toexplore the opportunities for expansion which will deliver world class high science nutraceutical products to serve the needs domestically and to contribute respectably in the international nutraceutical space, it will require structural categorization in ministries, start up incubation hubs and regulations.
Government Front: Gestatingthe Nutraceutical Industry
- In order to allow and authorize the nutraceutical industry it needs to be protected first which would mean it needs to have centralised ownership. The most suited ownership would be with theMinistry of Food Processing Industries (MoFPI).This would meanincluding the ecosystem (active nutraceutical ingredients, contract manufacturing, formulations and raw materials processing) of nutraceuticals under it. MoFPI can create a sub category as Medical/Health foods. Regardless of its science or outcomes, it is still a food. Hence, it would naturally fit into MoFPI. By creating a sub category and incubating the industry it would enable the government to dole out industry focussed incentivisationpackages.
- The inclusion of medical foods ecology into MoFPI, the constituentsconnected to Biodiversity laws in MoEF (Ministry of Environment, forest and climate change) and NBA (National Biodiversity Authority) could be accomplishedunder MoFPI ministry. This will stop Indian trendsetters using USA as the podium to unveil their plant ingredient discoveries and assist small to medium sized companiesupgrade businesses in India (which is presentlytruncated by the difficulties posed by Biodiversity laws)
- Including Medical foods/Nutraceutical parks under PMKSY scheme of MoFPI could lead to parks concentrating on strategic locations of India to allowbusinesspersonsas well as larger players in nutraceuticalsto tap into prototyping , research/ development lab complex, testing, validation, common facilities (like blender farms, SCO2 facilities, Spray drying, freeze drying, fermenters, etc) and market access. An initiative of MoFPIcreating NIFTEM (National Institute of Food technology Entrepreneurship management) is asignificantleadingstride towards completelychangedenvironmentthat seems to be a close to anupcomingopportunitycurrently.
- While FSSAI / Ayushstays to progress in the correct direction, resourcerestraints and food regulations, unlike in pharmaceuticals has kept watchdogsaloof from operative enforcements. This has resulted in some nutraceutical/Ayurveda companies coddling in divergedassertions and practices carrying loss of trust and contempt to the business.
- A technical staffing inlicensing and product approval committee should be instated to grow the systematicreasoning and be able to support high science original nutraceutical products.
Ministry of Finance:
- Kerbing the import duties to permitinterplay for local ingredient manufacturers to mature more.
- Correct incentivisation to Nutraceutical exports
- Taxation structure of 18% tax (with few categories even taxed at 28%) to be revised to style nutraceuticals as a more reachable category.
State Ownership as Host:
For nutraceutical parks to grow it isimperative that state governments have the visualizationof development and own up to even host the ecosystem park. The Telangana government in India is taking huge steps in craftingnetworks for numerousmodules of healthcare including generatingan incubation park for nutraceutical industry. The project is being driven by Mr. Shakthi Nagappa-Director (Life Sciences and Pharma)under thedirection of present-day government in the state of Telangana.
- The Indian nutraceutical industry needs to self-regulate to make sure that there is compliance, nutrition and accountability in the nutrition field and it is not deemed as only a short cut revenue generation conduit.
- Embracing the Nutrify India Initiative as it empowers the responsible nutrition revolution through start-up. This enterprise commercializes innovation through the government market access programs and through large companies with robust supply chain systems.
- Work strictly with Responsible Nutrition Associationin generatingcriterions that can be used worldwide too.
- Work with incubation hubs for selecting high end innovation. There are 4000 nutraceutical start-upsin India working with several incubation hubs sustained by thegovernment’s innovation preferment bodies like BIRAC and AIC.
- To accept clinical trials and validation of new trends. With the onset of the pandemic, there is a major rush from the government for clinical validation of formulations. It is best showcased with an enormous study on 80,000 subjects being rolled out by the government on Ayush ingredients to discover the worth.
The Pandemic has altered the dynamics of procurementfor nutra. Consumers have moved their choice from want to need due to theimpact of COVID. The awareness about nutraceuticals has increased to 80% resulting in overall category growth with chyawanprash. Digitalnutra brands are here to stay and shapethe nutra industry. From USD 4 billion market, USD 1 billion was online which is expected to double up by March 2021. This is a phenomenal growth. eTailers will have to arrange responsible nutrition philosophies and severe compliance to FSSAI to ensure the right products make way into the stores with a strong monitoring of reviews posted for products.
With the new normal of nutra growing at 22% after one year from now the infrastructure of India will need to be more conducive and regulators will have to be more careful or there is a potential downside, a risk of losing consumers. This could happen due to the lack of trust generated due to hyped claims vs. outcomes, something similar to what happened to Ayurveda.
Combined efforts would not only lead to better health outcomes enabling healthier population to deliver higher economic objectives of country, but also build strong equity into global nutraceuticals space.