It's a sign of the changing times. Ten years ago anyone who decided to sell olive oil in India would probably have been laughed out of court.

They would have been told in no uncertain terms that there wasn't a market for their product. Today, there may be a few sceptics but nobody is laughing aloud.

The adventurous entrepreneur who has decided that India is ready to cook up a storm in olive oil is V N Dalmia, chairman of the Dalmia Group.

A year ago Dalmia was on holiday in Australia and investigating the idea of importing wine. Somewhere along the way, somebody planted the idea in his head that he should check out the possibility that India was ready for olive oil in large quantities.

Dalmia returned to India, and hired a market research agency to figure out how big the demand for olive oil might be in India.

The research agency discovered that 10 million litres of olive oil was imported into India every year. More importantly, the market was growing at 40 per cent annually.

However, 90 per cent is either virgin or extra-virgin which is highly fruity in flavour and has a distinct aroma. Therefore, Indians wouldn't use it for cooking. Also, this left the impression that olive oil was both expensive and exotic.

The Dalmia Group -- which sold the Dalmia Biscuits business in the early '90s -- wasn't put off by this finding.

In fact, says Narayanan Rajagopalan, president and COO, Olive Products Division, Dalmia Continental, "We aim to induce Indian households to use olive oil in day-to-day cooking rather than keep it for salad dressings and the like."

That's when they decided to import Pomace oil (that's a slightly different type of oil which doesn't have the distinctive aroma). The oil will be sold under the brand name Leonardo.

Says Rajagopalan, "Our competition is not with the imported olive oil being sold in the country currently but with regular cooking oil."

Needless to say olive oil sales will, figuratively, be a drop in the ocean. Rough estimates are that around 600 million litres of cooking oil is used in this country every month.

By comparison, the Dalmias plan to sell 60,000 litres by March 2004. That will climb steeply to 500,000 litres by the next fiscal.

However, whereas the Leonardo olive oil priced at Rs 270 per litre is much cheaper than the imported olive oil available in the market (priced at Rs 140 for 250 ml), it is much more expensive than regular cooking oil which is priced between Rs 90 and Rs 100 per litre. So is the Dalmia Group being over-optimistic?

Says Rajagopalan, "In a market that big, we don't think we are being over-optimistic. Moreover, health is a very big issue today and we believe more and more people will shift to a healthier cooking medium."

Rajagopalan also claims that cooking in olive oil requires only a third of regular cooking oil.

Olive oil is considered a healthy cooking medium since it not only provides monounsaturated fats but is also rich in vitamins A, D, E and K, and all anti-oxidants which fight cancer and prevent ageing.

The company has tied up with Italian company Nicola Pantaleo and initially the oil will be imported in bottles and marketed under the brand Leonardo (the brand is owned by the Dalmia Group).

However, there are plans of setting up a bottling and packaging plant near Pune in collaboration with the Italian company by the end of next year. The Dalmia group is planning to invest Rs 5 crore (Rs 50 million) till March 2004, and Rs 100 crore (Rs 1 billion) over the next three to five years.

Besides that the company is planning a big splash in the media to promote the new product. It has set aside Rs 10 crore (Rs 100 million) for communication.

Firstly, there will be print and electronic media advertising which besides establishing the brand will also talk about the benefits of olive oil, namely it being more healthy.

In the second stage, the company is going to hold cookery roadshows across the country where famous chefs will cook Indian cuisine using olive oil. The company has already tied up with Nita Mehta who is cooking new recipes using olive oil.

Initially the product has been launched only in north India but by the end of the fiscal it will be available across the country. However, the company is not looking at B and C category cities right now.

Says Rajagopalan, "Those cities are more price sensitive and therefore it will take us longer to form a presence there." The company expects all its sales to come from the metros and A class cities.

Now that the Dalmia group has entered the olive oil industry it doesn't plan to stick only to India. Talks are on to set up a company in Italy, which will directly export olive oil to the Middle East and Africa.

Can the Dalmias make a success of this business? If they can it will be an indication that the Indian middle-class is ready to try out -- and able to afford -- a range of costlier products that wouldn't have found a market here a few years ago.