How to Start a Seed Export Business?

Those dabbling with India's best export business ideas must have wondered how to start a seed export business in India. If you are looking for an import-export business idea, giving seed exporting a shot would be worthwhile.

Are you sceptical about the profitability of the seed export business idea? Well, don’t be. According to past studies, India’s seed industry is easily worth Rs. 18000 crores. If this sounds great, the news about its consistent growth will reestablish our previous claim. The hotspots of hybrid seed production units are located in Tamil Nadu, Karnataka, Maharashtra, Andhra Pradesh, Telangana, and Gujarat.

If you are looking for an import and export business idea that is profitable and takes the Indian seed industry to the global trade picture, then starting a seed export business would be perfect for you. India’s agro-climatic conditions and years of expertise in agriculture and seed production make it the best export business idea.

This article lists the steps you need to remember while starting a seed export business in India. Read through to learn how to start an import and export business of seeds.  

How to Start a Seed Export Business in India

The seed industry requires lower investment and is more profitable than regular commercial crops. While starting your seed export business unit, you need to research a lot to understand the various policies, markets, and documentation required. In this article, we have provided a rough overview. Keep reading to make your idea of starting a seed exporting business a real one.

1. Market Scope

Like any other import-export business ideas, exporting seeds also require you to do some market research. You might want to ask a few questions about what would be the ideal set of seeds that would bring the maximum profitability, when to export, the amount you have in your mind to put as an investment while starting it, etc. Getting educated about the different technology used and the environment required to regulate its growth will save you from any future losses. Out of $70 million worth of exports made from India across the globe, the primarily exported seeds include Corn, Paddy, Cotton, Sorghum, Soybean, and Sunflower. It is no surprise that, out of all the seeds exported, Paddy has a premium price and demand. This is mainly because of its consumers around the globe.

2. Laying the Foundation

If you want to start a seed export business, you will require a licence issued by the DGFT. The EXIM committee goes through several proposals for the export of seeds and other planting materials. You would want to submit 20 copies of the application in a specific format. Surfing the internet by now for a seed export plan would have ended your search on the SeedExim portal. You should register in this portal and wait to be approved by several government authorities. This also requires approval from the National Biodiversity Authority.

Before starting any export business, you need a bank account, business PAN card, and an IEC(Importer-Exporter Code). You can either do an export-oriented production or create a perfect production unit for both exports and use in India. If you want to build a certified seed export business in India, you might also want to create a business plan. This includes the financial planning, the quantity of produce, estimated land requirement and estimating expenditures and ROI. Not surprisingly, creating a business plan should be the first step of your import and export business ideas.

3. Financial Investment

When planning your seed export business’s finances, you need to keep in mind the cost analysis. This includes workers, land, and other expenditures. When estimating the cost of the farming land, you can either put it as your land requirement or contract farming. Generally, if you want to start a small-scale seed production business, you would require Rs 5 lakhs to Rs. 8 lakhs. This estimate includes workforce, procuring technology, packaging, testing, and other miscellaneous charges. While choosing an idea out of all export business ideas, understanding your financial backing and the business’ requirement is crucial. This will prevent you from taking up more than what you can handle.

4. Technology and Product Strength Assessment

If you want to get certified for your seed export business, you need to meet the eligibility requirements for certification. This includes general requirements, field standard, specific requirements, and seed standards. The inspection would consist of an administrative check on the source seed, evaluating the field, inspecting the sample, followed by the bulk plot testing with control and finally, a grow-out test. When producing at an Industrial level, there is no one standard method. While getting machinery, you need to procure those that will not disturb the quality of the seeds and should also not include too many chemical processes. If you produce tonnes of seeds at a time, it might result in poor quality and, thereby, you failing the certification. Most of the seeds produced in industries are hybrid varieties, unlike the ones produced in the field. Compared to seed production in farms, industry level seed production would require a higher investment because of all its R and D requirements. While testing your seeds for quality, you need to ensure that they are viable and free from pests. Your consignment should always be fumigated. Quality is the key while understanding how to start an import-export business.

5. Channel Development

The most important step of setting up a seed export business is to identify various channels by which you can market your produced seeds. There are several ways to find buyers. You can participate in several trade fairs, buyer-seller meets, exhibitions, Business-to-Business portals to find potential buyers. You can also try creating a website with your seed product catalogue, price, payment terms and other information. You can promote your export business through Indian missions abroad, colleagues, friends, relatives, agencies and other such touchpoints after gathering the necessary information.

6. Market Entry and Export Requirements

Ideally, your overseas market should be selected when you are doing your ground research. While exporting, you also need to check with the respective country’s agriculture department to ensure the seed is cleared for pest risk analysis. You can do further research by evaluating the markets in terms of exports under the FTP when planning your seed export business. Providing samples as per your Foreign buyers will help you get orders. You also need a copy of the import permit from your customer. When you export seeds and other agricultural products, you might need a Phytosanitary certificate to prove that your seed is free from pests and diseases. Apart from this, you might sometimes need an Additional Declaration in the main Phytosanitary certificate. This is given only after testing the sample to be exported.

While you are sorting out your product’s pricing, you need to consider everything, from the sampling of your seeds to the final realisation. This includes insurance and freight. While exporting seeds, you need to keep in mind that your goal is to export maximum quantity at competitive pricing to get a maximum profit. When you are doing any export business including seeds, it might involve payment risks due to your buyer country’s insolvency. You can cover these risks using an appropriate policy from the ECGC or Export Credit Guarantee Corporation. Keeping this in mind when you are learning how to start an import-export business in India is important.

Now that you’ve reached the end of this blog, we hope you are quite updated with the various steps required to start a seed exporting business in India. With correct resources and policy knowledge, you can make your seed business a success and help India become the hub for seed exports. It is one of the best export business ideas, low in investment but high in profitability.

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

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FAQs

Q. What is an IEC code?

Ans. When you are starting a seed export business, you need an Importer-Exporter code. This can be procured after you get your business’ PAN card. You can apply for it on the DGFT government portal.

Q. What are some seed varieties that cannot be exported without restrictions?

Ans. Onions, berseem, cashew, sandalwood, etc., are some of the seeds that cannot be exported without restrictions. They are only allowed on a case to case basis under a license issued by the Director-general of foreign trade.

Q. How can you export seeds safely from India?

Ans. Using a well-known Business-to-Business website is the best way to export seeds from India. Portals like Alibaba and BizVibe will have sourcing buyers from all over the world. These portals can be used for any of your export business ideas.

Q. Can you export seeds through the State Trading Corporation?

Ans. You can export seeds through the State Trading Corporation. This will check the exporting country’s demand and help you identify buyers and importers.

Q. What are some countries that are best to export seeds from India?

Ans. When starting your seed export business, some countries you can start with include China, the USA, UAE, and Saudi Arabia.