Are You Considering Exporting Agricultural Products? Let Us Discuss!
Have you ever thought of expanding your agricultural business outside the borders and boundaries that are known to you? And there you have the global market, and demand for Indian agricultural products has surged way up.
But let’s be honest with ourselves. Setting up the import export business is not just about packing heavy export goods and sending them abroad. There is a procedure involved, documentation, and some specialized know-how that can make or break the deal. The export of agricultural food products allows Indian businesses to get more profit and opportunities.
Now let’s break it down. Whether you are a farmer, trader, or entrepreneur, this guide might help you in the biggest explosion of Agro-exporting. Are you ready? Let’s get started!
Why Export Agricultural Products from India?
According to the News by the Indian Express, Agricultural Exports touched $48.9 billion in 2023-24 in India. So, it has been very well portrayed in agriculture. In the production of rice, spices, sugar, cotton, coffee, and fresh vegetables, our country has made a significant mark on the world. Exporting these precious commodities does not serve only the purpose of increasing revenue; it sets the pace for international trade and long-term business development.
Right now, is the right time to start your import export business in agriculture, given the favorable trade policies and government support towards the export sector.
Step 1: Get the Appropriate Licenses and Registrations
Before you start shipping products from your country, you need to have the required approvals. Here is what you will need:
- Import Export Code (IEC)
All businesses that want to carry out international transactions and trade require this Import Export Code (IEC) registration, which is provided by India’s Directorate General of Foreign Trade (DGFT). This is a 10-digit code and is obligatory for customs clearance as well as international transactions. If you do not have this number, your goods will not leave the country!
- GSP Licensing
The General System of Preferences, formally known as “The General System of Preferences,” was established by UNCTAD in 1971 and provides tariff reductions to exports from developing and underdeveloped countries to the EU. It augments market access, thus indirectly benefiting Indian exporters by rendering their products globally competitive.
- APEDA License
To export organic agricultural products, firms require the India Organic certification under the National Program for Organic Production (NPOP), issued by the APEDA. It shows the verification of compliance with strict norms of organic farming, including natural fertilizers and chemical-free cultivation for a minimum of 2-3 years. This license is valid for three years but can be renewed thereafter.
- Import Authorization
The requirement of obtaining an import permit by exporters differs from country to country, and therefore, exporters must accordingly secure the import permit from the destination country. Certain trade agreements with India may provide facilitation in this regard.
- FSSAI Registration
The Food Safety and Standards Authority of India (FSSAI) guarantees the quality standards of food products present in the market. Any company involved in the manufacture, processing, or distribution of food must obtain an FSSAI license and print a 14-digit registration number on its packaging. This license is compulsory for both domestic and international trade within five years of its grant.
Step 2: Choose the Right Agricultural Products
Not all countries require trade in the same Agro-products. Some markets prefer spices, while others have a greater demand for pulses or dairy goods. Here are some of India’s major exported Agro-products:
- Rice (Basmati and Non-Basmati)
- Spices (Turmeric, Cumin, Cardamom)
- Fruits and Vegetables
- Tea and Coffee
- Dairy Products
- Processed Foods (Pickles, Jams, Ready-to-Eat Meals)
Research the market for high-demand products and concentrate on quality.
Step 3: Ensure Proper Packaging and Quality Control
Do you buy a product with ruined packaging? Of course not! Thus, there should be strict standards of packaging and labeling for exporters. Here’s what you need to mind about:
- Use export-quality packaging to prevent from damages occurring during transit.
- Observe the labeling requirements of the importing country (nutritional info, expiry dates, country of origin, etc.).
- Conduct quality tests before shipment to avoid rejections at customs.
Step 4: Freight and Shipping
Shipping logistics make or break your export venture. Here’s what you need to consider:
- Choose Appropriate Transport
- Sea Freight– Best for bulk exports (grains, pulses, perishable goods in cold storage containers).
- Air Freight- Fast but costly, good for perishable products: fresh fruits, vegetables, and dairy.
- Get a Freight Forwarder
Freight forwarders handle customs clearance, documentation, and shipment tracking. Associating yourself with a good freight forwarder saves time and assures smooth delivery.
- Be Aware of Export Documentation
- Bill of Lading (for sea shipments) or Airway Bill (for air shipments)
- Packing List
- Certificate of Origin
- Phytosanitary Certificate (for plant-based products)
- Insurance Certificate
Step 5: Payment Methods – Secure Your Transactions
International agreements and transactions are the trickiest. One must make use of secure payment transaction methods such as:
– LC: Letter of Credit follows all kinds of terms made for delivery of goods. Payment comes after the expected delivery is made.
– Pre-payment: This is the method mainly used for small amounts of shipment.
– Bank Guarantee: It offers security for trade deals.
– Escrow Services: Third-party protection for the payment and product quality.
Summing Up!
The Agro-export industry is booming, and given India’s diverse agricultural environment, there is no limit to growth. The government is easing the export process through initiatives such as APEDA support programs and free trade agreements with various nations.
If you are looking to commence your own import export business, this is the time to act! Follow these steps, get the right certifications, and take Indian agriculture to global markets!
Have questions? Do you need support to traverse the Agro-export business? GFE Group is there to take you every step of the way.
