Analysis of the eggplant market in India
The relevance of research
Eggplant (solanum melongena) is a herbaceous perennial plant of the Solanaceae genus. Eggplants began to be grown as a cultivated plant suitable for food and properly prepared only in the middle of the th century. Breeders are breeding new varieties that differ in shape, skin color, and weight. Already, people are beginning to replace their usual vegetables with peppers and eggplants.
Purpose of the study
Analyzing the state of the eggplant market, assessing the size of the market, analyzing competitors, as well as determining the factors affecting the eggplant market
Content
Part 1. Overview of the Indian Eggplant Market
1.1. Description of eggplant
1.2. Key Features of the Eggplant Market
1.3. Volume of production
1.4. Share of exports in production
1.5. Market share of imports
1.6. Dynamics of market volume 2017-2019 (2020 - fact + forecast). Potential market capacity
1.7. Current trends and development prospects of the studied market
1.8. Assessment of factors affecting the market
1.9. Market structure
1.10. Analysis of sectoral indicators of financial and economic activity
Part 2. Analysis of competitors TOP 10
2.1. The level of competition in the market
2.2. Major players in the market. Production volume of the largest players
2.3. Market shares of the largest competitors
2.4. Analysis of the assortment of eggplants of the main producers
2.5. Strengths and weaknesses of competitors
Part 3. TOP-5 announced investment projects in the industry under study
Part 4. Consumption analysis
4.1. Market saturation
4.2. Key consumer trends in India
4.3. Estimate of eggplant consumption per capita
4.4. Largest consumers
4.5. Analysis of the results of tenders for the purchase
Part 5. Price Analysis
5.1. Prices of domestic producers
5.2. Retail prices
5.3. Analysis of prices for imported products
Part 6. Analysis of the industry in a crisis
Part 7. Forecasts and conclusions
7.1. Barriers in the market
7.2. Market Growth Drivers
7.3. Market development forecast until 2024
7.4. Go-to-Market Recommendations
7.5. Key findings from the study
Research excerpt
Part 1. Overview of the Indian Eggplant Market
1.1. Description of eggplant
Eggplant (solanum melongena) is a herbaceous perennial plant of the Solanaceae genus. Native to the Middle East and South Asia. Distant ancestors growing wild can now be found on the Indian peninsula.
Eggplants began to be grown as a cultivated plant suitable for food and properly prepared only in the middle of the th century.
Breeders are breeding new varieties that differ in shape, skin color, and weight.
For growing eggplant, gourd varieties are chosen, which are planted immediately in open ground, or greenhouse species. Early varieties are most in demand. They are resistant to fluctuations in air temperature, are characterized by accelerated growth:
Vakula - harvest 110 days after planting. The weight of the berry reaches 500 g. Up to 8 kg of fruit can be collected from one bush. The plant has no thorns;
Balagur - eggplants ripen for 100 days. The plant forms 6 fruits at once. 100 berries are harvested from one bush;
Negus - high yield after 80 days. The plant bears fruit all season;
Milady f1 - this berry can be eaten 80 days after planting. The fruits are elongated, elegant; they are convenient to use. Pulp without bitterness, there are almost no thorns on the bush;
Annette f1 - this variety is attractive because it is resistant to insects. The fruits can be eaten after 65 days.
Eggplant varieties are grown in greenhouses, for which a certain thermal regime, air and soil humidity are observed. Many plants are resistant to pests. One of these is Diamond. He is not afraid of stolbur, mosaic, which are often found in plants of the nightshade family.
Full ripening of fruits, depending on the variety, can occur in the range from 3 to 4,5 months from the moment of sowing. Technical ripeness is reached within a month and a half after flowering. Fresh products must comply with GOST 31821-2012 or 13907-86.
Eggplants are transported in wooden or plastic boxes with ventilation holes. Transportation in transport packages is also possible. You can transport products by any means of transport that can provide temperatures ranging from +7 to +10 degrees and humidity of 85-90%. Fresh products can be stored in such conditions for up to 15 days.
Consumer packaging can be in the form of plastic bags or shrink wrap, plastic trays and boxes.
1.2. Key Features of the Eggplant Market
Until 2014, the Indian eggplant market experienced a decline in domestic production, which was associated with a low level of competitiveness compared to imported products: high production costs, high selling prices, and demand instability.
As a result, there has been a significant reduction in the area devoted to cultivation (mainly in southern India).
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Eggplant production in India is accounted for under OKVED code 01.13.1 - Growing vegetables. 01.13.11 - Growing vegetables in open ground, 01.13.12 - Growing vegetables in closed ground.
Foreign economic activity - according to the TN VED code 070930 “Vegetables: eggplants (fresh or chilled).
1.3. Volume of production
Diagram 1. Dynamics of eggplant production in India in 2015-2019, tons
Eggplant production is estimated to have increased from … tons in 2015 to … tons in 2016,
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1.4. Share of exports in production
According to Comtrade, during 2015-2019. eggplant exports from India exceeded production, which is explained by the presence of re-exports.
1.5. Market share of imports
The market for niche vegetables in general, as well as eggplants in particular, is characterized by a high share of imports.
On average for the period 2015-2019. the share of imports in consumption amounted to …%.
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The largest increase in imports was observed in 2018.
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1.6. Dynamics of market volume 2017-2019 (2020 - fact + forecast). Potential market capacity
The volume of the eggplant market in India is influenced, first of all, by the volume of imports. Imports during 2015-2020 (estimated) increased on average by …% per year.
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During the period under review, the largest increase in consumption was observed in 2018 …
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Thus, the potential of domestic eggplant producers is associated both with the potential for import substitution (over 20 thousand tons per year) and with the growth of per capita consumption.
1.7. Current trends and development prospects of the studied market
Growth in world eggplant production.
Diagram 6. The volume of eggplant production in the world in 2015-2019, million tons
The growth of world production and consumption is associated not only with population growth, but also with an increase in per capita consumption: ...
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1.8. Assessment of factors affecting the market
Let's consider the main factors influencing the market and, accordingly, the demand in the eggplant market in India.
Economic
GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
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Regarding India, experts predict a difficult and unpredictable period. Firstly, because the entire global economy has entered a recession triggered by the coronavirus. Secondly, there was a drop in world oil prices, which is extremely painful for the Indian economy. As a result, it is highly likely that in the medium term the eggplant market will also be negatively affected by negative processes in the global and Indian economies. The strength and duration of the impact will depend on: the demand for oil and gas and the level of world prices for them, the duration of the period of low prices, as well as the duration of the coronavirus pandemic in the world and India.
Let's take a look at some experts' assessments:
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Bank of India forecast. Source: cbr.ru Forecast date June 29, 2020
IMF forecast. Source: Expert Online. Forecast date: June 25, 2020
Forecast Expert RA. Source: https://1prime.ru/ Forecast date: June 15, 2020
Forecast of the Organization for Economic Cooperation and Development (OECD). Source: https://www.rbc.ru/. Forecast date: June 10, 2020
Forecast by Fitch Agency. Source: https://www.forbes.ru/. Forecast date: June 29, 2020
HSE forecast. Source: https://rns.online/. Forecast date: June 3, 2020
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Socio-demographic
The development of the market for niche greenhouse crops, including eggplants, can be positively affected by the growth in incomes of the population, as well as a change in gastronomic preferences.
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Real disposable income
This trend leads to a general reduction in demand in many areas of the economy, both from end consumers (B2C segment) and from companies (B2B segment).
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Thus, at present, according to the totality of the considered economic and social factors, the following is observed:
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technological
Among the technological factors influencing the eggplant market in India are:
Improving eggplant growing and storage technologies to increase the productivity and quality of the product, reduce its cost. The use of advanced technologies makes it possible to conduct the production cycle both in the autumn-winter and summer seasons. For 2015-2019 The yield of greenhouse production has increased significantly: from 20 kilograms of vegetables per square meter to 70 and more.
Development of a greenhouse complex in India.
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Diagram 12. Dynamics of greenhouse vegetable production in India in 2015-2019, thousand tons
The volume of production of niche vegetables, according to market participants (Agroinvestor) …
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Political and legal
The development of eggplant production is closely related to the state support for greenhouse farming - within the framework of programs to support the cultivation of fruit and berry crops, perennial plantations, vegetable growing in open ground, the construction of greenhouses, vegetable growing in closed ground, growing fruit and berry crops:
Beginner Farmer
Development of cooperation
Leasing grant
Subsidies to support perennial plantings
Subsidies to reimburse part of the direct costs incurred for the creation and modernization of agro-industrial facilities, as well as for the purchase of machinery and equipment. Direction of support (among other directions):
The requirements of the Ministry of Agriculture of the Republic of Tajikistan for the area of greenhouse facilities are at least 3 hectares. Subsidy amount:
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Subsidies for technical re-equipment.
Subsidies for co-financing of part of the costs associated with the purchase of equipment (to be clarified) - associated with the technical re-equipment of an agro-industrial complex enterprise:
Various programs of the Ministry of Agriculture of the Republic of Tajikistan
Among the measures of state support for the greenhouse industry, including the cultivation of eggplant, tax preferences can be distinguished:
Zero income tax rate for agricultural producers.
Preferential rate on a loan of 5% through the Ministry of Agriculture of India.
Reducing the VAT rate to 10% starting from 2017
At the same time, 2018 was the last year when the state compensated the capital costs for the construction of greenhouse complexes - first 20% of the costs, then 10%.
Table 7. STEP analysis of factors affecting the eggplant market in India
Thus, the Indian eggplant market is experiencing a positive impact of environmental factors at a low level. A group of political factors has only a positive impact on the market, a group of social and technological factors has a more positive effect, a group of economic factors has a more negative effect.
1.9. Market structure
Types of eggplant
In India, 53 varieties of eggplant are cultivated to some extent, which can be classified as follows:
Depending on the ripening time: early ripening, mid-ripening, late-ripening.
Depending on climatic conditions: eggplant, zoned for the European part of India, for regions of Siberia, etc.
Depending on the method of cultivation: for closed and open ground.
Other properties: color and shape of the fruit, etc.
The table provides a ranking of the best varieties of eggplant in India.
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across union territories
In the structure of eggplant consumption in India (calculated on the basis of an analysis of the structure of imports) in the first place - the Central Union Territories
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It should be noted that such a high share of the Central Union Territories is explained by the fact that most importers are registered in this region, but eggplant supplies can actually be redistributed to other regions.
1.10. Analysis of sectoral indicators of financial and economic activity
The analysis of sectoral indicators of financial and economic activity was carried out on the basis of information on the industry 01.13.12 - Cultivation of greenhouse vegetables.
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Current liquidity ratio (Ktl) - the ratio of the value of short-term assets to the value of short-term liabilities of the enterprise.
The higher Ktl turned out to be, the higher the solvency of the enterprise. The minimum value is 1, which means the sufficiency of working capital to repay short-term liabilities. The coefficient value of 2 or more is considered optimal.
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The absolute liquidity ratio shows what proportion of short-term debt obligations will be covered by cash and their equivalents in the form of marketable securities and deposits, i.e., absolutely liquid assets.
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The business activity of the industry (enterprise) is assessed on the basis of such an indicator as the period of receivables turnover. The longer the period of repayment of receivables, the higher the risk of non-payment. Permissible values for the receivables turnover period: the fewer days it takes to turn over receivables, the better.
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The equity ratio characterizes the availability of own working capital of the enterprise, necessary for its financial stability, it is calculated to assess the solvency of the enterprise. Lack of own working capital, i.e. the negative value of the coefficient indicates that all the current assets of the organization and, possibly, part of the non-current assets are formed from borrowed sources. The normative value of the index Equity ratio - 0,1 (10%) - was established by a decree of the Government of India.
The value of the coefficient exceeding 0,1 indicates the financial independence of the company.
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In general, the analysis of the main financial indicators indicates the financial stability of the industry, there is a significant increase in profits in 2019.
Part 2. Analysis of competitors TOP 10
2.1. The level of competition in the market
The main players in the eggplant market are domestic producers (greenhouse complexes) and importers.
Domestic producers
The need for import substitution, state support for the industry entails the development of greenhouse complexes. As of 2019, the Greenhouses of India Association unites 242 enterprises, including 127 greenhouse farms.
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Importers
More than 300 companies are involved in the import of eggplants into India. The largest importers carry out deliveries of more than 300 tons per year (as of 2019).
2.2. Major players in the market. Production volume of the largest players
Despite the development of the greenhouse industry in India, the growth of eggplant production, the main competitors in the market are importers. Thus, the largest greenhouse complexes (as of 2019) produced no more than 500 tons of eggplant, while the importing company, which is in 10th place in the TOP-10 eggplant suppliers in the Indian market, sells 342 tons of products.
The table shows the main players in the eggplant market in India (TOP 10 importers + largest producers as of 2019).
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Diagram 19. Dynamics of domestic producers' revenue from eggplant production in monetary terms for the period 2017-2019, million Rs.
According to GidMarket estimates, the total revenue of domestic eggplant producers grew in 2017-2019. In 2019, it amounted to about … million Rs.
2.3. Market shares of the largest competitors
The eggplant market is assessed as low concentrated: TOP-10 importers account for …% of the market.
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2.4. Analysis of the assortment of eggplants of the main producers
In greenhouse farms in India, various varieties of eggplant are grown - Beyoncé, Angela, hybrid varieties, etc.:
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2.5. Strengths and weaknesses of competitors
XXX
https://ahstep.ru/yuzhny-agrokombinat/
Agriculture XXX
http://agrokulturagroup.ru/
Agrocomplex XXX
https://agpcomplex.com/
Greenhouse Plant XXX
https://maiski.ru/
Agroholding XXX
http://vyborgec.ru/
Part 3. TOP-5 announced investment projects in the industry under study
State support for the industry (support for agricultural production, import substitution) led to the development of investment projects. Despite the abolition of compensation for investments in equipment from 2019, for the period 2020-2022. major projects in the greenhouse industry are planned and are being implemented.
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Thus, by 2023 the volume of eggplant production (due to the implementation of investment projects) will increase by …thous. tons.
Part 4. Consumption analysis
4.1. Market saturation
The eggplant market is estimated to be unsaturated both in terms of competition and potential consumption.
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4.2. Key consumer trends in India
Among the consumer trends affecting the eggplant market in India are the following:
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The food retail market in India has been changing in recent years under the pressure of ongoing consolidation and ever-increasing competition. The largest retail chains are actively expanding their presence, especially in Central India, as well as entering new regions. At the same time, regional and local retailers are under pressure. Every year, dozens of small networks leave the market, unable to withstand competition from federal-scale players.
4.3. Estimate of eggplant consumption per capita
Eggplant consumption per capita in India is low...
Eggplant consumption prospects (per capita) are related to:
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4.4. Largest consumers
Consider the largest consumers:
End consumers - in terms of regions (by the level of development of retail markets).
Intermediate consumers are the largest retail chains.
End users
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The analysis allows us to conclude that the level of sales of fresh vegetables is influenced by factors such as the development of the consumer environment (population, income level) and natural and climatic conditions (high consumption in regions traditionally growing fresh vegetables).
Intermediate consumers (retail chains)
Consider the indicators of the TOP-10 networks in India (based on the results of 2019):
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4.5. Analysis of the results of tenders for the purchase
In the period from 01.01.20 to 08.09.20. 15 tenders were announced for the purchase of fresh eggplants in the amount of more than … thousand Rs. The purchase was carried out both in separate lots and as part of the purchase of an assortment of fresh vegetables.
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Part 5. Price Analysis
5.1. Prices of domestic producers
The dynamics of eggplant prices in India has a pronounced seasonality. They are at their minimum values for the year in July-October - during the active phase of harvesting vegetables of domestic production. Eggplant prices in India are at their highest between January and May.
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5.2. Retail prices
For the period from January to December 2019, the minimum price level was observed in September …
Diagram 24. Dynamics of retail prices for eggplant by months of 2019, Rs./kg
5.3. Analysis of prices for imported products
Import prices for the period from 2015 to 2019 increased …
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The high level of eggplant import prices entails a sharp jump in retail prices in the winter, when there is practically no supply from domestic producers.
Part 6. Analysis of the industry in a crisis
The impact of crises on the industry can be assessed on the basis of an assessment of the relationship between such indicators as the index of physical volume of GDP, the turnover of retail trade in fresh vegetables, and the gross harvest of greenhouse vegetables.
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The impact of the crisis affected eggplant imports – according to the results of the 1st half of 2020, imports decreased by …%.
Thus, the 2020 crisis associated with the influence of the COVID-19 factor had a rather positive impact on the industry, sharply increasing the demand for domestic products.
Part 7. Forecasts and conclusions
7.1. Barriers in the market
One of the main barriers for new players to enter the greenhouse market is the reduction of state support measures. So, in 2020, many non-core investors began to leave the industry due to the cancellation of the CAPEX payment, but the remaining players with successful production experience continue to increase their capacities both in existing greenhouse complexes and at new sites in completely different regions.
At the same time, the reduction in state support measures did not lead to a decrease in the production of protected ground vegetables: according to forecasts based on information on the dynamics of the gross harvest for the 1st half of 2020, it will maintain its growth trend and exceed the level of 2019.
Growth in production in 2020 will be ensured by the full capacity of the complexes built last year, as well as the launch of the second and third stages of previously built plants and the ongoing reconstruction of old greenhouses.
7.2. Market Growth Drivers
The following are the main drivers of the greenhouse vegetable market:
Maintaining a high level of import dependence in the segment of greenhouse vegetables.
The need to expand the geography of sales of vegetables, which is typical for large greenhouse holdings with huge volumes of year-round production.
Low degree of dependence on climatic conditions for the success of projects in the field of greenhouse vegetable cultivation.
Profitability of the industry — the average profitability of complexes is now about …% in terms of net profit, differing in different regions. At the same time, some enterprises receive losses in their operating activities, while others have profitability up to …%.
7.3. Market development forecast until 2024
The market forecast for the eggplant market in India was based on the following inputs and assumptions:
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Thus, despite the growth in production volumes, by 2024 the market will not be saturated with domestic products.
7.4. Go-to-Market Recommendations
Given the high potential of the Indian eggplant market in terms of market potential, import substitution, with a number of barriers to entry in the market, it is recommended for new players or existing players expanding their scope of activity:
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7.5. Key findings from the study
The analysis carried out allows us to draw the following conclusions about the state, development and prospects of the eggplant market in India:
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Diagrams
Diagram 1. Dynamics of eggplant production in India in 2015-2019, tons
Diagram 2. The share of imports in the volume of eggplant consumption in India in 2015-2019, %
Diagram 3. Imports of eggplant in India in 2015-2019, in kind, thousand tons
Diagram 4. Imports of eggplant in India in 2015-2019, in value terms, million dollars
Diagram 5. The volume of the eggplant market in India in 2015-2019, est. 2020, thousand tons
Diagram 6. The volume of eggplant production in the world in 2015-2019, million tons
Chart 7. Dynamics of India's GDP, 2007-2019, Q1 2020, % to the previous year
Chart 8. Monthly dynamics of the US dollar against the rupee, 2015-2020 (Jan.-June), Rs. for 1 US dollar
Diagram 9. Dynamics of the population of India as of January 1, 2010-2020, million people
Diagram 10. Population forecast in India for the period 2021-2024, million people
Diagram 11. Dynamics of real incomes of the population of India, 2014 - Q1 2020, % to the previous year
Diagram 12. Dynamics of greenhouse vegetable production in India in 2015-2019, thousand tons
Diagram 13. Dynamics of greenhouse vegetable production (niche segment) in India in 2015-2019, thousand tons
Diagram 14. The structure of eggplant consumption in India by union territories in 2019 in physical terms,%
Diagram 15. Profitability of profit before tax (profit of the reporting period) in the field of growing vegetables in greenhouses in comparison with all sectors of the Indian economy, 2017-2019, %
Diagram 16. Current liquidity (total coverage) for the industry ""Cultivation of vegetables in greenhouses for 2017-2019, times
Diagram 17. Business activity (average period of receivables turnover) in the greenhouse vegetable growing industry, for 2017-2019, days
Diagram 18. Financial stability (security of own working capital) for the industry ""Cultivation of vegetables in protected ground"", in comparison with all sectors of the Indian economy, 2017-2019, times
Diagram 19. Dynamics of domestic producers' revenue from eggplant production in monetary terms for the period 2017-2019, million Rs.
Diagram 20. Shares of the largest players (importers) in the Indian eggplant market in 2019, %
Diagram 21. Shares of the largest players (producers) in the Indian eggplant market in 2019, %
Diagram 22. Dynamics of eggplant consumption per capita in India in 2015-2019, kg / person / year
Diagram 23. Dynamics of wholesale prices for eggplant by months in 2019, Rs./kg
Diagram 24. Dynamics of retail prices for eggplant by months of 2019, Rs./kg
Tables
Table 1. Structure of eggplant imports in India by supplying countries in 2019, units rev.
Table 2. TOP-10 eggplant recipient companies by import in India in 2019, units rev.
Table 3. Top 10 eggplant import companies in India in 2019, units rev.
Table 4. Dynamics of the volume of the eggplant market in India in 2015-2019, est. 2020, tons
Table 5. Expert forecasts for the decline in real GDP in India in 2020, %
Table 6. Protected ground area in India in 2015-2019, thousand square meters m
Table 7. STEP analysis of factors affecting the eggplant market in India
Table 8. Top 10 eggplant varieties in India
Table 9. Profit (loss) before tax by industry Cultivation of greenhouse vegetables in the Union Territories of India, 2017-2019, thousand Rs.
Table 10. Gross Margin of Indoor Vegetable Industry in Comparison with All Sectors of the Indian Economy, 2017-2019, %
Table 11. Absolute liquidity of the greenhouse vegetable industry compared to all sectors of the Indian economy, 2017-2019, times
Table 12. TOP-10 Greenhouse complexes in India as of 2019, ha
Table 13. Distribution of greenhouses by union territories of India, as of the end of 2019, units rev.
Table 14. The largest players in the eggplant market in India (importers and producers) in 2019, tons
Table 15. Brief description of the TOP-5 investment projects implemented in the indoor eggplant industry in India for the period 2020-2022, units rev.
Table 16. TOP-20 states of India in terms of retail sales of fresh vegetables in India in 2019, thousand Rs.
Table 17. Data on tenders for the purchase of fresh eggplant, announced from 01.01.20/08.09.20/20 to / / , in the amount of more than thousand Rs.
Table 18. Dynamics of import prices for eggplants in India in 2015-2019, units rev.
Table 19. Assessment of the impact of crises on the greenhouse vegetable growing industry in India in 2000-2019, %
Table 20. Forecast for the development of the eggplant market in India for the period 2020-2024, tons
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