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The Indian Paint industry can be divided as:
- The organized sector comprising of large and medium size units
- The unorganized or the small scale sector.
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The organized sector has a market share of 60%, valued at 23.4 bn. This is in contrast to the 55% share that the sector commanded a few years back. There are around 25 units in this segment. The unorganized sector comprises of around 2,000 units with a combined market share of around 40%. Major companies in this segment include Asian Paints, Goodlass Nerolac, Berger Paints, Shalimar Paints, and Rajdoot Paints.
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High excise duties, low technology and low capital costs for production led to the incidence of a high number of units in the small scale sector. However, since 1992 the government has been consistently lowering duties from 40.5% in 1992 to around 16% currently. This has led to lowering of price differential between the organized and unorganized sector. Moreover the paints sector was also allowed to claim MODVAT credit on petro-based products, thus lowering the excise incidence further
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