India is a country fuelled with numerous cultures, traditions, festivals, ethnicities, owing to which it is loaded with a potpourri of food. Delicacies made in India are dominantly made with our staple foods like wheat, rice, pulses, and cereals. India has acquired supremacy over two such kinds of cereal i.e. rice and wheat. Every dinner table in India has some of the other dishes that are made up of rice or wheat. Thus, in an agrarian country like India, rice is sowed, harvested, reaped, and consumed in large quantities.
If you are exploring import-export business ideas, then perhaps the rice export business can be a profitable venture to invest money in. The first question that would pop into one’s mind's - How to start an import-export business? Well, we shall answer that for you through this article.
Before we jump to answering the main topic question, first, let’s understand what the export business is all about.
What is Export Business?
Selling goods from a producing country to another recipient country through shipment is called an export business. Highly potential markets with dynamic investments are a few of the many comprehensive aspects of export business. Now let’s focus on the step-by-step guide for starting an import-export business.
Steps for an import-export business plan
1. Building an organisation
Setting up a complete company with a creative name and logo that appeals to the international market is the first step in building an organisation. Documenting the ownership of the firm, whether sole, joint family, partnership, etc., must be ascertained.
2. Bank Account
Under the name of your business, you must open a current account in the desired nationalised or multi-national bank that has authorities for foreign exchange. With proper documentation in place, the organisation shall never see a grey day.
3. Permanent Account Number
A company participating in foreign trade must possess a Permanent Account Number (PAN) from the Income Tax Department of India. This number is useful in securing all international transactions to India.
4. Import-Export Code
The import-export code is a 10 digit number generated based on the PAN by the Regional Authority of the Directorate General of Foreign Trade (DGFT). Obtaining this number is thus mandatory for anyone who wishes to venture into an import-export business.
5. Acquiring the RCMC
A person venturing into import-export business needs to obtain the Registration cum Membership Certificate to avail benefits and concessions under the Foreign Trade Policy 2015-20. The RCMC has powers to render an entrepreneur with services from the Community boards, Export promotion councils, and other governing bodies.
6. Cover up the risks with ECGC
The highest risk factor that is involved in the export business is non-payment through the buyers. Thus, the Export Credit Guarantee Corporation Limited (ECGC) takes care of the risks relating to foreign trade.
These are some of the basics that need to be in place before you begin your off-shore trading. Now let’s emphasise one of the best export business ideas that also answers your query on how to start a rice export business?
Action Plan to Export Rice
India has been a leading exporter of rice amongst many other countries for decades in the global economy. In 2015-16, our country exported around 40.45 lacs of metric tonnes of basmati rice and 63.66 lacs metric tonnes of non-basmati rice worth crores. Thus, you can judge from the facts and figures the total net worth of this business idea.
Once you have all the documentation in place, you must perform the following steps to stabilise and expand one of the best export business ideas in the country.
1. Market Research
Once you have decided to start the rice export business in India, you must learn about the current export trends, market capacity and size, ongoing competition, foreign policies, etc. Thorough research is mandatory before entering foreign waters. Understanding Indian policies and learning more about the foreign country’s norms shall put you in a better position than others.
The next step is to establish a brand name, brand identity and market it dynamically. Creating the visual identity involves building a website that will be of international standards and have all the updated tools attached to it. Keeping it upgraded and updated periodically will attract and attach clients’ confidence in your brand.
3. Locating Procurers
Exploring the vast community of farmers, suppliers, vendors, distributors, buyers, dealers, and other middlemen would be the next step. You can choose to procure rice from the suppliers, or directly from the farmers to exclude the middlemen involved. Obtaining rice from the farmers can be highly beneficial as you can get the product at its best quality and minimal rates. You can go a step further and tie-up with a certain number of farmers in a particular area like Telangana, Andhra Pradesh, Kerala, Karnataka, etc. The complete South of India smiles with lush green, watery, rice paddy fields that can be considered as your best option to pick the raw material from. Post this phase, tying up with foreign traders and marketers is also important to take your trade further.
4. Types of Rice Exported from India
The rice grown and harvested on the soils of India has innumerable varieties to its credit, including Basmati, Ambemohor, Bamboo, Kolam, Indrayani, Mogra, Jeera Samba, Parmal, Ponni, Sharbati, Sona Masuri, Surti Kolam, Wada Kolam, and the list goes on. But when it comes to exporting rice, it is majorly divided into two parts i.e. Basmati and Non-Basmati. Basmati is considered to be the king of all kinds of rice. Long, sleek grain, faint beige colour, and a rich aroma are what defines the grains of Basmati rice. India is the biggest producer of Basmati rice all over the world, making it one of the best products to be utilised in import and export business ideas. Hence, exporting Basmati or any type of rice across continents can fetch you good money.
5. Branding Samplers
When you put a step forward into the international market, what stands to be the backbone of your firm is the branding you create for your company. In the international market, to break through the competition with good rates, you must provide customised branded samples to prospective buyers. Once the buyers are happy and satisfied with the samples, they shall surely contact you for further orders and contracts.
The buyers for your rice can be 5-star hotels, restaurants, cafes, supermarket chains, departmental stores, and e-commerce sites like Amazon.
6. Costing Analysis
The opening of a venture, stabilising, expansion, or for that matter, closure to is dependent on costs. While investing heavy amounts of rupees into the export of rice, one must have a strategic plan for investing slowly and steadily. A comprehensive study of the international market must be taken into consideration before finalising the pricing policies. At the same time, offering the best quality at competitive rates will fetch you long-term clients and bigger contracts too.
We are assured that the vital aspects present in this article will answer your question as to how to start import and export business, specifically a rice export business.
While reaching out across borders an entrepreneur must keep in mind that not only their brand but the country’s prestige is at stake.
The economic conditions of India, for now, might not be very much inviting, but we are sure that investing in newer avenues like these will open broader and wider markets for you and the country as a whole. Thus, cautiously investing your time, patience, money, and hard work shall reap bigger and brighter results internationally.
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3) How to Start A Small-Scale Essential Oil Extraction Business?
4) How to get started with the food processing business?
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Q. Who is the largest exporter of rice?
Ans. India has stood in the number one position for many decades, exporting all types and qualities of rice across continents.
Q. How much rice does India export?
Answer - Our country exported around 8 million tonnes in the year 2017-18, and in 2019-20, shipped around 5.4 million tonnes to the world.
Q. Who produces the most rice?
Ans. Amongst all the under-developed, developing, and developed countries, China produces the most rice throughout the world.
Q. Which state in India is the largest producer of rice?
Ans. West Bengal is the state that produces the largest quantities of rice. Half of the land of West Bengal is under cultivation for rice. In the farming season of 2016, the state reaped around 15.75 million tonnes of rice over a cultivable land of 5.46 million hectares.