More than half of the population in India is dependent on agriculture, making it the backbone of the Indian economy. Within agriculture, rice holds a position of prominence. It is one of the major food crops of the country and continues to play a significant role in national exports.
India contributes 21.5 percent of global rice production. It stands second in rice production after China. Rice is responsible for approximately 40 to 43 percent of the total production of food grain in the country and plays a pivotal role in the national food delivery and livelihood systems.
Recent studies show that there is a thriving market for many rice varieties globally. Basmati rice for instance is much in demand and is being bought by customers across the world.
The exports of this fragrant rice have been a bit adversely affected by the unseasonable rains in September and the prices have already increased by 20-35%, which is not being met internationally. Experts believe that exports would continue despite the adverse conditions and pick up over time.
According to APEDA (Agricultural and Processed Food Products Export Development Authority), the exports of non-basmati rice during the first half of the current fiscal year increased about 75% to 8.91 million tons from 5.08 million tons during the same period a year ago.
Competitive price advantage
The rice exports from the country enjoy a competitive price advantage as compared to Pakistan, Thailand, or Vietnam. India provides parboiled rice at $360 free-on-board, while Thailand offers the same at $380-390 per ton. Indian 100% broken rice is available at around $280 per ton; other countries offer it at $290 per ton.
During the post-independence era, unparalleled developments took place such as the Green Revolution that increased the area under cultivation as well as improved the cropping intensity of the rice varieties. As a natural corollary, India emerged to be a potential exporter of high-quality rice by the early 1990s from a net importing country in the mid-1960s.
The phenomenal output growth led to an increase in the per capita availability of rice, despite a consecutive rise in population. The country attained self-sufficiency in rice since the early 1980s. However, it was only in the mid-1980s that the quantum of exports started to grow.
The figures pertaining to rice exports tell a compelling tale.
|Year||Quantum of Exports (In tons)|
Growing Rice Exports
The recent years are no different. India has recorded 13.03 million MT of non-basmati rice exports in the financial year 2020-21. This hike in exports is due to high demand from China, Vietnam, and Bangladesh. The country also witnessed record sales of 4.6 million tons of basmati rice in the financial year 2021.
The major importing countries for basmati rice are Saudi Arabia, Iran, Iraq, Yemen, and UAE. Benin, Nepal, Togo, Senegal, and Côte d’Ivoire are major importing countries of non-basmati rice. Recently, China has started importing non-basmati rice from the country. Another major market for Indian rice is Africa.
Globally, India is the largest exporter of this cereal, catering to demands in the Middle East, Africa, EU, and the US. The demand for Indian-origin rice is increasing from different parts of the world, which in turn is boosting exports from the country. This in turn is fueling the production capacities of rice and contributing to the growth in the rice market.
Improvement in production capabilities
The climatic conditions of the country are conducive to the cultivation of rice and India has the distinction of being one of the top ten rice-producing countries in the Asia Pacific region. Millions of poor farmers in the country are dependent on rice farming. The top varieties of rice grown in India are parboiled rice, Sella rice, Swarna rice, SonaMasoori rice, broken rice, to name a few. India has created a niche position for itself in the world market by producing both basmati and non-basmati rice. The area under the cultivation of rice is being increased to enhance the overall production of the grain.
Why should you export rice from India?
- Make the most of increasing demand
- Reach out to global markets
- Ensure early growth
- Benefit from abundant production
- Availability of competitive market prices
Steps to start export trade in rice
- Register your company under the provisions of the Companies Act 2013.
- Acquire the licenses required to export rice from India. The licenses necessary are Company Registration, Import Export Code (IEC), APEDA registration, FSSAI license, ISO certification, and GST registration.
- Choose a destination country after analyzing the market conditions
- Find buyers for your specific type of rice
- Analyze existing competition in the market
- Understand the laws and method of payment in the target country
- Find out about the mode of transportation
Other helpful pointers to keep in mind to export rice
Visit the APEDA website to learn more about the myriad processes of rice trading and the recent reports about cereal exports from India. You can go through the data pertaining to the amount of basmati and non-basmati rice being exported and learn more about the destination countries. As you are going through the information, you may start having a few queries, which you can write down. Once you have around 10 to 15 queries, you can seek an appointment with the individual in charge of the cereals department at the APEDA website. The officers are helpful and can provide reliable answers to all your doubts and questions.
Once you have talked to the APEDA officials to understand the current ground realities, you can thereafter take a stock of your budget. If you are sure that your finances will suffice, you can go ahead and apply for company incorporation, PAN, GST, and IEC Code registration. You can also form a current account in the name of your company at a bank of your choice. You can then go ahead and file for APEDA registration online.
You can also try and visit trade fairs and international shows in rice export, if you get a chance, to go and meet individuals from the same industry. You can learn how the market leaders are operating and also be able to network with other exporters.
Make sure to keep your expenses at a minimum. Make the most of technological advances to talk to traders located in other parts of the world.
Bear in mind that the profit margins of the rice export business are dependent on the country to which you would be exporting and the frequency of consignments you are planning to deliver. Also, it pays to create a good rapport with the suppliers of the country where you would be exporting with high-quality services and unique marketing techniques.
Sometimes natural calamities happen that can take a toll on rice production and export. In other instances, external market fluctuations can come in the way of smooth export trade. As a potential exporter, the best you can do is to select the most demanding country for export and apply the most innovative marketing strategies to reap profits in your rice business.