The system and method for recognizing and counting products within images is disclosed. The products are recognized by carrying out a nearest-neighbor search in the template feature space using a k-d tree and the product count is then obtained by using a maximum feature repeatability index for each identified feature. The system also obtains product arrangement by fitting bounding boxes around each identified product. The count of boxes thus obtained may also provide the exact number of discrete products visible in an image. A second stage of grid-based search is also carried out in the neighborhood of each detected product to detect new products that might have been missed out in the previous step. This detection is based on a confidence measure including information like histogram matching and spatial location of products. This system is also useful in verifying planogram compliance for a given product.