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How To Start A Food Export Business?

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Considering numerous food import-export business ideas may appear difficult at first, but once you do more research, you will realise that it is one of the most profitable and best export business ideas globally. Surely, it requires a lot of hard work initially, starting with selecting the type of food product you want to deal in, knowing the food regulations of your area, and other requirements but at the end of the day, having your own food business will be worth it.

According to a report by trade.gov, “Imports of consumer-oriented foods, led by tree nuts and fresh fruits, are among the fastest-growing segments of imported agricultural products and reached $4.7 billion in 2019, down from $5.3 billion in 2018.” Another report by India Brand Equity Foundation (IBEF) states that “Indian agricultural/horticultural and processed foods are exported to more than 100 countries/regions, chief among them being the Middle East, Southeast Asia, SAARC countries, the EU, and the US.”

How to Export Food Products

Wondering how to export food? Here are the following steps that will answer all your questions about how to start an import-export business. You can follow these steps to launch your import-export business idea:

1. Establishing an Organisation

The initial step in bringing your import and export business ideas to life requires setting up a company. You must first seek company incorporation or have your company stabilised according to protocol with a catchy name and logo.  A proprietorship, partnership, or corporation are all types of business organisations.

2. Opening a Bank Account

The next step is to open an account in the name of your respective organisation or company. Open this account in a bank authorised to deal with foreign strade, i.e., import and export business.

3. Obtaining Necessary Documents

Obtaining a few necessary documents is also part of the answer to the question of how to start an import and export business. A list of the most critical documentation required to start a food export business in India is provided below.

  • Getting Permanent Account Number (PAN):

The next step in the process of how to export food is to get a PAN card. It is essential for every person stepping into the import-export business to get a PAN from the Income Tax Department.

  • Food Products Export License from the FSSAI:

For starting a food export business in India, get your FSSAI license on priority. FSSAI, as a regulatory authority under the Ministry of Health, offers authorisation to food product exporters to conduct business overseas. A 14-digit FSSAI food license or FSSAI registration number is required for all manufacturers, traders, wholesalers, retailers, importers, and exporters of food products and raw materials.

  • Obtaining Importer-Exporter Code (IEC) Number:

The Director-General of Foreign Trade issues a ten-digit code to Indian corporations or companies. This is necessary for all entrepreneurs waiting for their import-export business ideas to fructify. The government requires the registered firm to submit all necessary documents, including the PAN card, applicant's photograph, and a copy of the cancelled check from the business current account. The DGFT website allows you to apply for this import-export code online. It's vital to remember that each PAN card can only have one import-export code.

  • Registration cum membership certificate (RCMC):

The next most important step to launch your import-export business idea after IEC is getting your RCMC or Registration cum Membership Certificate. The concerned Export Promotion Councils grant this. The only way to start an import and export firm in India is to have an import and export code and an RCMC. The registration will be valid for all of the company's branches in India.

  • APEDA license:

The Indian government formed the Agricultural and Processed Food Products Export Development Authority (APEDA) under the Agricultural, and Processed Food Products Export Development Authority Act passed by Parliament in December 1985. You must avail of your APEDA licence if you intend to start exporting agricultural products.

4. Selection of product

Choosing the right product is essential for starting a food export business. Explore the online market and look for the country with the most demand for the product you want to deal in. The selection of products depends on the market demands, competition, quality requirements, local food laws, etc.

Once you have selected the product you want to deal in, you must research various markets and find the best one suited for your product.

5. Prerequisites for Labelling

For your food import-export business ideas to take shape and your goods to be accepted in international markets, you must guarantee that the food items' packaging contains sufficient information.

To export food goods, the following information must be provided on the packaging:

  • Facts and information on the nutritional value
  • Name of the food product and the company's/ brand's names and a brief product description
  • Names of the ingredients
  • Vegetarian or non-vegetarian declaration
  • Food additives declaration
  • Imported food's country of origin
  • Date of manufacture or packing
  • Best before date and a use-by date
  • The volume of contents and net weight
  • Name of the exporter in India, as well as his or her address
  • Usage instructions
  • Batch number
  • Code number

To be accepted by the international market, a food exporting company must comply with these food labelling standards. The Ministry of Health monitors whether entities or companies involved in exporting food products outside of India are abiding by the rules.

6. Finding Buyers

Finding buyers isn’t as hard as it sounds. Once your name is out there in the market, buyers will come looking for you, but you must put in a lot of hard work in the beginning for that to happen. Participate in trade fairs, buyer-seller meets, exhibitions, B2B portals, etc. You can go for digital marketing for lead generation.

7. Sampling

Providing good quality food samples is a must.  This helps the buyers understand if they know your products better. As per FTP 2015-2020, exports of bonafide trade and technical samples of freely exportable items shall be allowed without any limit.

8. Pricing/Costing

Putting a price on your goods is a critical step. You gain your buyer’s attention with the help of good and profitable prices for both the buyers and you. Some factors that you must pay attention to while deciding the price of your products are sampling expenses, export expenses, product manufacturing expenses, etc.

Conclusion

Follow the steps mentioned above, do some hard work, and your own research and your export business ideas will come to fruition. Keep track of the rising and declining competition and the changing trends. With proper strategy, you can always conquer the overseas business market.

If you still have doubts remaining, below are some frequently asked questions that you can go through.

Also read:

1) The Indian Import-Export Scene
2) How Can I Start Spice Export Business In India?
3) How Can You Start An Import Business In India?
4) Types of Direct & Indirect Taxes in India
5) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. What are the necessary documents and licenses to start a food export business in India?

Ans. If you plan to start a food export business in India, you must procure the FSSAI certificate, the ten-digit IEC number against your PAN card, and an RCMC certificate on priority.

Q. How to find buyers for the export business?

Ans. It is quite easy to find buyers out there; all you have to do is put in a little hard work in the beginning. Make the market know that you exist, and the buyers will come to find you. To do that, you have to attend various trade fairs, build your website, market yourself digitally, etc.

Q. What are the types of imports and exports?

Ans. Different types of imports and exports are:

  • Direct Export
  • Indirect Export
  • Merchant Export and
  • Deemed Export