The Demand for Indian Tobacco Products

Paper Summary:

This dissertation aims to examine the viability of expanding the interests of the Indian Tobacco Company by exporting to the markets of the United Kingdom, Germany, and France. The study explores the economies of the region, the capacity for production, and the potential demand for tobacco exports in the three target countries, as well as their potential markets. Economic indicators, financial indicators, and the relationships between them, as well as growth trends in private spending, country imports, inflationary change, and GDP are reviewed, and standard prices for tobacco products among the countries in light of these other factors are examined.

Outline
Indian Tobacco Company ? Financial Analysis
Profitability and Income
Expense Analysis
Economic Factors
Gross Domestic Product and Net Income
Capacity and Production
Consumption
Price Elasticity of Demand
Nominal vs. Real Prices
Cigarette Imports
Foreign Import Growth
Real Total Domestic Demand
Real Private Consumption Expenditures

From the Paper:

"The advantages for Indian tobacco are a low unit production cost. Average retail prices for export are competitive with respect to Brazil, the United States and Zimbabwe. The cost of converting tobacco into cigarettes in India is approximately .80 US $/1000 pieces in 1999 versus 3.50 in UK and 4.0 in USA. In addition, the Indian market can address the low to medium nicotine levels now being requested by world markets. In addition, such global developments as government controls to restrict production in China, the phasing out of Agri subsidies by EU and Land invasions & Land acquisition in Zimbabwe i.e. change of tobacco farms from White farmers to Native farmer combine to provide an opportunity to gain entrance to export markets, particularly in the United Kingdom, France and Germany."

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