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The export of agricultural food products from India allows the Indian businesses to get access to the global markets. It gives them a chance to sell their products at a better price. This can lead to an expansion of profit for these businesses and provide better business opportunities to them.
Ever since various export and trade policies were introduced, the exportation of agricultural products has witnessed a rapid growth. Numerous initiatives have been taken by the Central Government to ease export businesses in the agricultural sector. India is a major agri-exporter of rice, spices, sugar, cotton, castor oil, coffee, cashew, tea and fresh vegetables.
If you’re planning to start an Agriculture Export Business in 2024, going through this article might be helpful!
APEDA is an apex body which comes under the Ministry of Commerce and Industry, Government of India. It was established for the promotion of export of agricultural commodities and processed food products. Various schemes/initiatives have been taken by APEDA for the export of agricultural products outside of India like the NPOP program for the exploration of organic food production, Basmati Export Development Foundation (BEDF), etc.
APEDA plays a crucial role in increasing the export of agricultural products. The government body has drawn attention to the importance of organic farming from time to time, which has led to reduction in the use of chemical pesticides and industrial fertilizers (GMOs). APEDA certification has enabled the exporters to sell their products at a higher price in the international market due to the ‘tag’ they’ve received from APEDA by getting certified.
Agricultural food products, also known as agri-food products, refer to those products which are either derived from agriculture or related to it. These products are generally grown on farms, and include food items such as grains, pulses, vegetables, fruits, eggs, milk, etc.
Value-added products are also included in the agricultural food products, like processed food, baked goods, and beverages like buttermilk, kefir and ayran made from agricultural food products. These products have to go for further processing. Due to this, they add value to the original agricultural product. Agricultural food products play an important role in feeding the world population. India is one of the largest agricultural food products exporters in the world, and its agriculture export industry has the capability to grow even further.
For the businesses being transacted outside of India, Import Export Code (IEC) registration is mandatory. IEC is provided by the Directorate General of Foreign Trade (DGFT), which is a part of the Ministry of Commerce and Industry. It reduces the complex trading procedures and makes the exporting-process easier for the exporters.
The agri-food products being exported from India need to be registered with the appropriate authority for assuring that these food products are of high quality before they are exported from India to another country. The exporters must receive a certificate from the appropriate authority for the importing nation, in which the quality and quantity of goods exported is stated. This will ensure the legitimacy of such agricultural food products.
The General System of Preferences (GSP) program was established by the United Nations Conference on Trade & Development (UNCTAD) in the year 1971. The GSP scheme enables the vulnerable developing and underdeveloped countries to pay lower tariffs on their exports to the EU.
UNCTAD came up with GSP to help in the upliftment of developing and underdeveloped countries. It is an autonomous commercial organization which aims to develop, regulate tariffs and provide preferential treatment to the countries which are developing or underdeveloped, so that export markets are easily accessible to them.
India indirectly benefits through the benefits provided to the importers through duty-free entry and reduced tariffs of the importing nations which are eligible under GSP. Indian products are now considered to be parallel with those from developed nations due to the reduction in import duties.
In order to export organic agricultural food products, it is necessary to obtain “India Organic” certification mark, which showcases compliance with the National Program for Organic Production (NPOP) standards. This certification mark is granted by APEDA to the organic products which are eligible. NPOP is a system of process certification where an independent body is given the task of reviewing the production, processing, storage, handling, and transportation of organic food products.
Standard operating procedures of NPOP ensures that the producers adhere to the minimum standards such as the use of natural fertilizers and no use of chemicals at the time of production of the agricultural food products. These minimum standards have to be followed for 2-3 years before the cultivated products can be considered as organic, and be certified for the same. The labeling for agricultural products is done according to their organic grade. The APEDA license comes with a validity of 3 years from the date of authorization, and the licensee has to adhere to the strict rules and regulations of APEDA and NPOP.
It is extremely important for an exporter to have an import permit from the country where he plans to export the agricultural food products. There isn’t one universal license or registration for this. It varies from one country to another, as every country has its own rules and legislations. If the importing nation has a trade agreement with India, it can be easier for the exporter to get an authorization for export of his agricultural food products.
The Food Standards and Safety Authority of India (FSSAI) is a single national body for provide detailed guidelines for food grade, ensuring the conformity of standards for food and consumable products, and avoiding any ambiguity in the minds of merchants, traders and exporters that want to export their food products from India.
Any business that is involved in food manufacturing, processing, packaging or distribution is required to obtain FSSAI registration. After acquiring this registration, they have to imprint the 14 digits FSSAI registration or license number on all food packages. FSSAI licenses are of three categories based on their standards and investment in the food business.
It is necessary for the applicant to confirm the purpose of the FSSAI license, whether it’s for domestic sale or export, in the application for this license. FSSAI registration ensures that agricultural products are accepted all around the world, and makes the export of such products simple and easy. FSSAI license is valid for a maximum of 5 days from the date of authorization.
Governments issue agricultural export licenses for regulating and overseeing the export of goods and products from one nation to another. It is a legal requirement for exporters to obtain agriculture export licenses. Additionally, these licenses help the exporters to gain trust from the importers in international markets. A valid license received from a government authority increases the brand’s credibility.
Before an export license is obtained, one has to go through rigorous processes involved in obtaining approval and comply with the government’s rules and regulations. These rules and regulations ensure that exports are carried out in a manner which is not only legal but also ethical, and that the agricultural food products meet certain quality standards, and are safe for consumption. When an importer deals with an exporter having a export license, he is ensured that the exported products are not subject to any legal restrictions. This helps to reduce the risk of legal disputes or issues between the importer and exporter.
To start a business for export of agricultural food, it is necessary to be in possession of certain documents. These documents are mentioned below:
To start an export business in India, it is necessary to obtain all the necessary licenses and registration, such as FSSAI registration, APEDA license, IEC code, etc. The exporter must comply with the rules, regulations and guidelines of APEDA and practice business in a legal and ethical manner. Having all the required licenses not only showcases the business’ compliance with the law, but also helps to improve their credibility which can attract more importers, which means more business. Various schemes are offered by APEDA which can assist the registered exporters to expand their business of agriculture export. If you have to start a successful export business of agricultural food products, connect with Registrationwala!
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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