How a Bangladesh conglomerate managed to make its FMCG products popular in parts of India

Mr Noodles is heartily slurped up in parts of northeast India. Packets of Pran Jhal Muri, Potato Crackers, Dry Cake and Family Toast — possibly unfamiliar names in the rest of the country — fly off the small shops there. Even in Siliguri, West Bengal, if you ask for a mango juice at a shop, you might be handed a Frooto instead of a Frooti. Do you want a litchi-flavoured drink? There is Pran Litchi.

These are all products of PRAN — Bangladesh’s largest agribusiness conglomerate, set up four decades ago by a retired army officer, Amjad Khan Chowdhury. And it is in no mood to slow down in neighbouring India.

“We have set an ambitious target to grow 10 times (in India) from the current levels in the next five years,” Anjanabha Majumdar, director of PRAN’s Indian subsidiary, Pran Beverages (India), tells ET Magazine over telephone and email.

“Many new products are at an advanced stage of commercial launch.” When the company set up a food processing unit in Agartala, Tripura, in 2014, it was the first such Bangladeshi plant in India. They followed it up with a second plant in Kalyani, in West Bengal’s Nadia district, which borders Bangladesh, in 2015. “A third manufacturing facility is likely to be set up in the next quarter. Meanwhile, an expansion programme is on the anvil in north Bengal where negotiations to acquire a commercial shed are at an advanced stage,” says Majumdar.


He, however, refuses to divulge the company’s revenue from India operations, adding that Assam and Tripura have been its key markets. He claims that at least one of their products, Pran Dry Cake, is a market leader in the segment in the region.

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Bangladesh is finding a growing market in the region, thanks to its booming economy and India’s zero import duties. Interestingly, this has been unfolding even as the Northeast, particularly Assam, has been protesting against illegal migration from the neighbouring country, with the agitation peaking during the recent antiCAA demonstrations.

Bangladesh’s economy has been growing rapidly since 2014, with its GDP growth hovering around 8% in 2019. The country recently hit the headlines when the IMF’s World Economic Outlook projected that its per capita GDP was set to surpass India’s in the Covid year of 2020 — quite a feat, considering Bangladesh was earlier branded as an impoverished, underdeveloped nation. (India is supposed to bounce back in 2021, according to the report, surpassing Bangladesh once again. Also, India’s per capita GDP in terms of purchasing power parity is still 11 times more than that of Bangladesh, according to 2019 data.)

“We have set an ambitious target to grow 10 times (in India) in the next five years. A third manufacturing facility may be set up in the next quarter. An expansion programme is on the anvil in north Bengal””

— Anjanabha Majumdar, Director, Pran Beverages(India)

Apart from PRAN, the big Bangladeshi companies, some of which have global operations, are BEXIMCO, ACI, Navana and Bashundhara. PRAN’s push is causing worries on this side of the border, though. Ashish Deorah, cofounder of Meghalaya-based Excel Foods that manufactures Yummy Noodles, which competes with Mr Noodles, says the Northeast has become a “dumping ground” for processed fruits and food from Bangladesh, Myanmar and Nepal.

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Rumpum, a noodles brand from Nepal, for example, is the market leader in Nagaland. Meanwhile, Indian micro, small and medium enterprises (MSMEs) cannot easily explore markets in Bangladesh even when they boast geographical proximity because of the steep duties slapped by the latter, says Deorah, who is also the national secretary of Laghu Udyog Bharati, a national-level association of MSMEs. Deorah says it has submitted several memoranda to the Union ministry of commerce and industry, highlighting Bangladesh’s duties that virtually block India’s agri and food processing products from reaching its markets.

“Our processed products are not at all competitive in Bangladesh due to the exorbitant duties. Meanwhile, if a Bangladeshi company exports, say, juices to India, it pays only the GST, which is 12%, and zero import duties,” he says, adding that an Indian exporter to Bangladesh ends up paying 45% as duties (customs duties plus special duties) for juices, 55% for cereal products and 60% for sweet biscuits. The only way out for Indian companies is to set up a factory in Bangladesh to escape duties. But that again would be a costly proposition.


While local MSMEs are concerned about competition from Bangladesh, FMCG and agri-business major ITC, which has a good presence in eastern and northeastern India, is not. “ITC’s extensive distribution infrastructure is enabling it to expand reach and penetration in eastern and northeastern region. FMCG brands in the foods and personal care segments from the neighbouring countries have not made any significant inroads in this region,” says an ITC spokesperson.

PRAN’s growing clout in the Northeast can’t be downplayed. In Tripura, it is the largest private sector employer. Its factory employs about 700 people apart from providing indirect jobs to many more.

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The problem, say MSME entrepreneurs in the Northeast, is not Bangladeshi companies setting up factories in the region. “We don’t have any problem if a company from Bangladesh establishes a factory in India and sells goods in the Northeast. The problem arises when it imports most of its products from Bangladesh where the input cost is very less. And India charges them zero import duties,” says Deorah, adding how PRAN’s litchi drink, manufactured in Bangladesh, is a big challenge to many local entrepreneurs.

PRAN’s India subsidiary is called Pran Beverages (India), but the one thing it doesn’t produce are beverages. As Deorah says, probably, it still makes business sense for the company to import some products from Bangladesh rather than roll out their production in India.



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