Indian Agriculture Export Business, A Step-by-Step Guide to Global Markets: History
- Agriculture is a significant contributor to India’s foreign exchange earnings through exports, with the country being a major exporter of various commodities.
- Around 50% of the population depended on agriculture for their livelihood.
- Exportation offers numerous benefits, such as employment generation, increased production, stimulation of domestic markets, and enhanced financial stability.
- In this article, a discussion will focus on export opportunities, export procedures, and the scope of exporting.
- In the year 2022-23, the country achieved a remarkable milestone in agriculture exports, with a 5.4% increase in exports as compared to the previous year’s.
A. International Trade rules and Regulations for export (Indian Agriculture Export Business)
- As export requires the movement of goods and services between two countries there are two governments of respective countries and so the rules may change from country to country and because of this there will always be a scope of risk for both entities.
- To avoid and eliminate such risks, the World Trade Organization (WTO) has established common rules that all countries must adhere to.
- Though WTO sets the rules for the globe as a whole, every individual country has its own organization or entity dealing with the internal policies and framing the rules and regulations for the internal promotion and welfare of the exporters.
- In India, foreign trade is promoted and facilitated by the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry (MoCI).
- Under DGFT various promotional bodies play a crucial role in implementing, promoting, and encouraging new exporters in India. It includes Export Promotion Councils, Commodity Boards, and Export Development authorities.
- These are said to be Non-Profit Organizations that are responsible for developing and promoting the export industry of India.
- Among various export promotional bodies, APEDA ( Agricultural and Processed Food Products Export Development Authority) plays a major role in boosting the exports of agricultural fresh and processed products.
B. Process and steps for how to start Agri-export business in India
1. Establishing a Company /Organization
2. Opening a bank account – in the name of the organization.
3. Availing PAN card in the name of the Organization.
4.Availing IEC -( Import Export Code). IEC is always PAN-based: To apply for the IEC following link can be referred to (Foreign Trade). Fees of Rs 500 can be paid through net banking or through credit/debit cards.
5. Availing RCMC ( Registration cum membership certificate ): RCMC is granted by the concerned export promotional council, commodity boards, and authorities.
6. Selection of products: Any product can be exported except the prohibited items as per APEDA.
7. Selection of market – based on the previous records of exports one should select the Market after studying the market size, demand, competition, payment terms, etc.
8. Finding buyers – which is considered one of the main parts and tedious jobs in export. Searching for a trustworthy buyer for a long-term business relationship with no controversies and infringement of rules. To find buyers’ participation in export-import fairs, trade fairs, exhibitions, and buyer-seller meets is a promising way and is considered one of the effective ways to find buyers.
9. Buyer interactions – fore said elements of trade should be discussed Providing samples, price negotiation, Purchase order from buyer, payment terms, delivery schedules, etc.
10. Risk covering through ECGC- (Export Credit Guarantee Corporation Ltd) as payment from the buyers is often a risk factor one can avoid these issues of post dispatch by always preferring 100% advance payment or LC ( Letter of credit). If both payment terms are not accepted by the buying party it is always advisable to Procure a credit limit on the buyer from ECGC to protect against risk of non-payment.
C. India Export Potential
Unlocking Global Markets: India has the potential to become a significant player in the global agricultural export market.
- India is one of the world’s largest producers of various crops, like rice, wheat, sugarcane, cotton, and more.
Targeted Crop Selection: Identifying high-demand crops in the international market, such as spices, organic products, and basmati rice.
Success Stories
The Basmati Rice and Spices Phenomenon:
- How India’s aromatic basmati rice and Spices captured the global market.
- The export of Basmati rice and spices significantly contributed to India’s foreign exchange earnings.
- Basmati Rice Exports: The export of Basmati rice, In 2021-2022, India exported over 5.8 million metric tons of Basmati rice, with a value of approximately USD 4.33 billion.
- Spice Exports: India is the largest producer, consumer, and exporter of spices globally. In 2021-2022, India exported spices worth USD 4.61 billion.
D. Transforming Agriculture and Exports: Indian Government Initiatives
Atmanirbhar Bharat Abhiyan
- The government’s self-reliance initiative includes agricultural reforms to improve farmers’ income.
- Encouraging private sector participation in agriculture.
Government Safeguards for Export Payments
- People with not sufficient knowledge or awareness of export business avoid exporting and make themselves satisfied with domestic business and lose big opportunities to scale up their business.
- In export, the government has its own securities to ensure payments to exporters. Government body DGFT is involved directly in resolving the payment issues if any buyer breaks the payment terms as agreed and ensures timely receipt of the payment.
Documentation Simplified
- People believe that getting customs clearance, export license, and other documents is a tedious task but everything is available online and one can easily get all the certificates provided genuine documents.
- As the government is focusing on boosting the export of goods and services it has eased the process of registration and documentation and is ready to serve the organization in every step starting from product selection and customs clearance to receipt of the payment against every export transaction.
E. Export Promotion Schemes
Schemes like the Agriculture Export Policy aim to boost agricultural exports.
Few Measures taken by the Government to Promote Agri Export.
Agriculture Export Policy (2018): It aims to harness the export potential of Indian agriculture to make India a global power in agriculture and raise farmers’ income.
District as Export Hub Initiative: The initiative’s goal is to identify export products and services across all districts and establish systems to promote them. Its aim is to assist small businesses, farmers, and MSMEs in accessing foreign export markets.
Transport and Marketing Assistance for Specified Agriculture Products: It is a Central Sector Scheme to mitigate the freight disadvantage for the export of agriculture products.
Trade Infrastructure for Export Scheme (TIES): It aims at enhancing the country’s export competitiveness by bridging gaps in export infrastructure.
Market Access Initiatives (MAI) Scheme: The scheme aims to promote India’s exports by supporting market development activities for Indian exporters. The scheme provides financial assistance for export promotion activities.
The Export Promotion Schemes of APEDA: APEDA has launched several schemes like financial assistance, market accessibility schemes etc. to promote the export of agricultural products.
F. Over the past five years, here are the export statistics for the products managed by the EP (Agri) Division
| S.No. | Commodity | 2018-2019 | 2019– 2020 | 2020– 2021 | 2021– 2022 | 2022– 2023(P) (Apr.-Sept.) |
| 1 | RICE -BASMOTI | 2,247.34 | 2,032.10 | 2,123.58 | 1,659. 60 | 2,279.66 |
| 2 | RICE(OTHER THAN BASMOTI) | 1,577.02 | 1,021.77 | 1,964.87 | 2,968. 77 | 3,207.29 |
| 3 | WHEAT | 20.84 | 33.14 | 108.77 | 630.15 | 1,487.47 |
| 4 | OTHER CEREALS | 208.83 | 97.22 | 212.99 | 467.42 | 524.85 |
| 5 | PULSES | 155.13 | 120.09 | 154.76 | 135.25 | 329.55 |
| 6 | TOBACCO | 291.99 | 274.61 | 264.23 | 288.53 | 446.72 |
| 7 | TOBACCO MANUFACTURED | 200.98 | 211.18 | 157.66 | 174.91 | 212.77 |
| 8 | CASHEW | 311.77 | 281.3 | 168.72 | 222.02 | 157.09 |
| 9 | CASHEW NUT SHELL LIQUID | 2.44 | 1.55 | 1.03 | 1.89 | 5.09 |
| 10 | SESAME SEEDS | 289.83 | 254.97 | 224.11 | 188.05 | 242.87 |
| 11 | NIGER SEEDS | 5.11 | 5.41 | 12.02 | 4.77 | 2.82 |
| 12 | GROUNDNUT | 209.77 | 190.32 | 236.51 | 246.42 | 245.57 |
| 13 | OTHER OIL SEEDS | 49.37 | 30.07 | 35.35 | 14.04 | 39.76 |
| 14 | VEGETABLE OILS | 58.14 | 65.97 | 131.22 | 99.22 | 178.9 |
| 15 | OIL MEALS | 591.9 | 430.11 | 461.65 | 471.65 | 556.61 |
| 16 | GUERGAM MEAL | 355.38 | 268.09 | 122.03 | 178.85 | 343.65 |
| 17 | CASTOR OIL | 445.41 | 523.11 | 438.01 | 615.62 | 662.93 |
| 18 | SHELLAC | 22.27 | 21.7 | 36.91 | 44.86 | 48.8 |
| 19 | SUGAR | 490.83 | 808.32 | 1,364.08 | 1,820. 68 | 2,649.00 |
| 20 | MOLLASES | 27.76 | 36.7 | 44.49 | 95.4 | 127.28 |
| 21 | FRUITS / VEGETABLE SEEDS | 78.52 | 67.01 | 72.09 | 65.81 | 73.03 |
| 22 | FRESH FRUITS | 293.03 | 277.68 | 230.65 | 301.3 | 313.46 |
| 23 | FRESH VEGETABLES | 425.53 | 408.81 | 440.63 | 435.41 | 439.52 |
| 24 | PROCESSED VEGETABLES | 150.83 | 152.54 | 213.87 | 213.77 | 254.01 |
| 25 | PROCESSED FRUITS AND JUICES | 299.22 | 298.57 | 321.88 | 370.12 | 440.62 |
| 26 | CEREAL PREPARATIONS | 267.44 | 273.45 | 280.21 | 314.92 | 359.31 |
| 27 | COCOA PRODUCTS | 92.03 | 93.36 | 64.19 | 74.84 | 74.42 |
| 28 | MILLED PRODUCTS | 75.09 | 75.08 | 102.11 | 113.26 | 232.77 |
| 29 | MISC PROCESSED ITEMS | 320.97 | 326.48 | 349.97 | 570.12 | 695.03 |
| 30 | ANIMAL CASINGS | 32.42 | 26.42 | 27.07 | 29.35 | 25.92 |
| 31 | BUFFALO MEAT | 1,890.65 | 1,599.87 | 1,365.15 | 1,593. 60 | 1,636.54 |
| 32 | SHEEP/GOAT MEAT | 69.34 | 54.32 | 19.73 | 29.31 | 33.82 |
| 33 | OTHER MEAT | 0.85 | 1.31 | 0.01 | 2.27 | 2.33 |
| 34 | PROCESSED MEAT | 0.81 | 1.4 | 0.43 | 0.77 | 0.99 |
| 35 | DAIRY PRODUCTS | 180.57 | 152.27 | 136.65 | 216.46 | 342.36 |
| 36 | POULTRY PRODUCTS | 47.1 | 40.02 | 27.42 | 30.89 | 56.56 |
| 37 | FLORICLTR PRODUCTS | 42.14 | 41.03 | 34.1 | 49.72 | 49.2 |
| 38 | ALCOHOLIC BEVERAGES | 152.11 | 112.33 | 165.99 | 133.89 | 160.73 |
| 39 | AYUSH AND HERBAL PRODUCTS | 229.61 | 212.4 | 236.31 | 291.87 | 312.71 |
| 40 | COTTON RAW INCLD. WASTE | 929.59 | 226.44 | 464.58 | 1,137. 83 | 435.87 |
| Total | 13140 | 11148.5 | 12816 | 16303.6 | 19687.9 |
Also check out: Importance of agriculture in India, Agricultural problems In India
G. List of common challenges faced by agriculture export businesses in India
- India faces yield disparities due to outdated farming practices
- Market Access and Trade Barriers
- Documentation and Regulatory Compliance
- Pest and Disease Management: Meet international phytosanitary standard
- Quality and Standards Compliance
- Logistics and Transportation
- Price Volatility
- Payment Risk
- Government Policies
- Inadequate infrastructure for storage and transportation results in post-harvest losses.
- Lack of access to modern technology
