Indian beauty brands suffer under new tax reforms

India’s beauty industry is suffering as a result of demonetisation and GST, but underlying growth is solid as brands target price gaps, says Raghavendra Verma

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Indian beauty brands suffer under new tax reforms

India’s robust cosmetics and personal care industry, which according to the Indian Beauty & Hygiene Association (IBHA) generated annual sales of US$8bn in 2016, is facing severe supply chain disruption and the closure of smaller brands.

Continuous double-digit annual growth registered during the last decade by the industry – noted in figures from the Ministry of Commerce and Industry’s India Brand Equity Foundation (IBEF) – has now been severely disrupted by a series of radical regulatory measures.

The shock demonetisation of 500 and 1,000 Indian rupee (INR) notes in November 2016, which removed 85% of the cash from the economy, was followed by an untidy adoption of a new Goods and Services Tax (GST) system in July 2017.

The first measure severely restricted the

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