Step-by-step guide on how to start onion export from India

In the exciting world of international trade, there's a hidden gem waiting to be discovered the onion. This common vegetable has a special story to tell, filled with flavors, benefits, and endless possibilities. As we begin this journey, let's peel back the layers and find out why exporting onions is such a promising choice.

Why to choose onions for exports

Have you ever wondered how a simple vegetable could be a gateway to international success? Let's take a closer look at why onions are more than just a kitchen staple; they're a passport to profitable exports.

Opportunity in the Export of Onion from India and Market Size

The global onion market is led by China and India, with limited international trade. These two countries are major contributors to global onion consumption. Notably, in 2019, the United Arab Emirates had the highest onion consumption per capita at 25.3 kg.

In India, the onion market shows promising growth, with exports valued at approximately 3000 crore. In the fiscal year 2022-23, India exported 15.19 lakh tonnes of onions, meeting consistent global demand. Looking ahead, the demand for onions in target markets is projected to grow by 2-4% annually until 2024, leading to increased retail sales volumes: 1,488 thousand tonnes in Indonesia, 449 thousand tonnes in Vietnam, and 52 thousand tonnes in Thailand. This surge reflects the rising preference for onions as a staple food in these regions.

Government Benefit and Support

When it comes to exporting onions, there's more than meets the eye. Government incentives are in your corner. The perks are lined up, ready to elevate your export game.

• Duty Drawback
  Exporting onions not only involves sending out products but also brings advantages. You receive a 0.15% duty drawback, which is directly added to your account without any extra effort needed. Moreover, a Customs House Agent (CHA) helps you with the shipping paperwork, making sure everything goes smoothly.
• RODTEP: Remission of Duties and Taxes on Exported Products
  The Remission of Duties and Taxes on Exported Products provides a great advantage of either 2% or Rs 1.2 per kg. To understand better, picture exporting goods worth 10,00,000. You could get a benefit of Rs 20,000 or Rs 1.5 per kg, whichever is less.
• Interest Equalization Scheme on Pre & Post Shipment Export Credit
  The "Interest Equalization Scheme." While it's aimed at manufacturers (not merchant exporters), its effect is considerable. If you get a loan at a 10% interest rate, the government covers a significant 5% of that interest. So, you only have to pay the remaining 5% interest, which eases the financial burden on your export venture.

Geographical Advantages

India holds the title of the world's largest onion producer. This means that the country has the ability to grow a significant amount of onions, making it a major player in the global onion market. The Gulf nations, which include countries in the Middle East, are big fans of onions. What's interesting is that India is geographically close to the Gulf countries. This proximity is a big advantage when it comes to exporting onions.

It allows India to transport onions to the Gulf within a relatively short time frame—around 4 to 5 days. This quick journey is pivotal in maintaining onion quality and enables India to promptly supply produce to overseas markets, particularly in countries such as Dubai, Sri Lanka, Bangladesh, Malaysia, Saudi Arabia, and the UAE, where onions are highly sought after.

How to source onion for exports

If you're new to exporting, finding onion suppliers for international markets may seem overwhelming. But don't worry; you have several options available. First, let's take a look at the top onion-producing states.

Top states that produce export-quality onions

When it comes to export-quality onions, certain Indian states stand out as prime sources.

• Maharashtra, Nashik
• Gujarat
• Karnataka
• Madhya Pradesh

Procurement Options: Mandis, Farmers, and Traders

As an onion trader, you've got three smart ways to get your hands on onions for export:

• Mandi: Mandis are big markets where lots of onions are bought and sold. You can pick onions from these markets, where farmers and sellers gather. It's like a one-stop onion shop!
• Direct from Farmers: You can also buy onions straight from the farmers. It's a friendly deal that helps both of you. You get fresh onions, and they get a good price. No middlemen involved!
• Onion Traders: These are onion experts who know when to buy onions at a low price and when to sell them at a higher price. They've got the timing just right!

Remember, each way has its own perks. Mandis offer lots of onions; buying from farmers is personal and trustworthy; and onion traders are like onion masters who can guide you in getting the best deal.

Understanding packing for onions

When it comes to packing onions, ensuring their freshness and safety is key. Mesh bags are the preferred choice, available in sizes like 5kg, 10kg, 15kg, and 20kg. Remember, the specific weight depends on the buyer's requirements and the destination country, so tailor your packaging accordingly to ensure your onions arrive in top-notch condition.
Here are the packing standards followed:

Here are the sizes of onions required by different countries.

Tip to find the best supplier for onion exports

Here's a simple tip to help you choose the best one: Think about quality and dependability.

Each choice has its good points. Mandis can offer lots of variety, farmers can give you super fresh onions, and traders know the market well. But what matters most is the onions' quality and whether the supplier can be trusted. Check if they always have good onions and if they can keep sending them. It might even be smart to work with a few different suppliers to always have a good supply of top-quality onions for your exports.

How to setup logistics for exports

Exporting onions requires a seamless logistics setup to ensure your produce reaches its destination in optimal condition. Here's how you can set up your logistics game for success:

Choose a good freight forwarder

Finding the right freight forwarder for shipping perishables like onions is a game-changer. Here's a quick guide to help you pinpoint the ideal fit:

• Efficient Team: Opt for a forwarder with a capable team that ensures timely shipments and hassle-free logistics for your orders.
• Customer Priority: Choose a forwarder that values your needs. They should provide helpful advice and guide you through shipping complexities.
• Quick Pricing, Great Service: Seek a forwarder that offers fast, accurate pricing alongside excellent service. Your onions are in good hands.
• Strong Online Presence: A forwarder with positive online reviews is a sign of reliability and trustworthiness.

At the forefront of this game is Citrus Freight. With our perishable logistics expertise, skilled team, quick pricing, and solid recommendations, we're ready to elevate your export venture.

Set Up a pricing system to quote buyers

After setting up your suppliers and logistics, it's essential to establish a system that enables you to efficiently provide CIF (cost, insurance, freight) quotes to potential buyers. Moreover, consider utilizing the Citrus app for instant CIF quotes and real-time vessel schedules, streamlining deal finalization. Keep in mind that a clear pricing strategy not only enhances competitiveness but also fosters buyer trust, boosting the likelihood of them selecting your products over alternatives.

Reefer Containers: Safeguarding Onion Freshness During Export

When it comes to exporting onions, the role of reefer containers is paramount. These specialized containers maintain a controlled environment, ensuring the freshness and quality of your onions throughout their journey. With temperature and humidity controls, reefer containers create an ideal atmosphere, preventing spoilage and preserving your produce's appeal.

Here is the ideal temperature , humidity & ventilation you can opt for exports:

Citrus Freight offers specialized perishable logistics and easily finds rates and schedules for your shipments. Time is crucial for perishable goods, and our user-friendly cloud-based solution puts you in charge of your timing.

Setup company for exports in India

Now that supply and logistics have been set up, it's time for the company. Starting an export venture involves a few fundamental steps. You'll need to register your company and adhere to legal requirements. These initial actions lay the foundation for your onion export journey.

Documents required to set up a company

• Company Registration: To conduct export activities, it is crucial to register your business as an export company with the relevant government authorities. This step ensures that your business has a legal identity. You can register your company as an LLP, PVT LTD, proprietorship, or partnership based on your business plan.
• IEC: To engage in import-export transactions, you must obtain an IEC from the Directorate General of Foreign Trade (DGFT). This code is a unique 10-digit identifier for your company and is mandatory for all such transactions. It enables customs authorities to recognize your company.
• Tax Identification Number (TIN) or Employer Identification Number (EIN): These are unique identification numbers for tax purposes. However, it is not necessary for every business.
• Trade License: If applicable, a trade license might be needed for specific export activities.
• GST: Enroll your export business under the Goods and Services Tax (GST) system. It is crucial to follow tax rules and access tax advantages.

Documents required to export onions

Below mentioned documents required to export onion from India.

• Invoice: The backbone of your export transaction is the invoice, which spells out onion details, pricing, and parties involved.
• Packing List: An itemized list detailing onion quantities, weights, and packaging ensures accurate shipments.
• Certificate of Origin: The certificate of origin establishes the onions' source, a vital factor for customs clearance and tariff assessment.
• Phytosanitary Certificate: A phytosanitary certificate is issued by agricultural authorities; it confirms the health of your onions, complying with import regulations.
• Bill of Lading (B/L): A receipt for goods and a carriage contract, the Bill of Lading plays a central role in the export process.
• Bank Realization Certification (BRC): Post-payment, this certificate affirms the realization of foreign exchange from your export venture. This is a post shipment document, hence it doesn't stop you from exporting goods; however, it's a closure of a foreign transaction.
• Port registration: This includes AD code registration, Icegate registration, and duty drawback registration. These are the 3 registrations you need to get for the successful completion of port registration.
• KYC: Registering your export shipment at the designated port ensures proper processing and clearance by customs. requires the submission of necessary shipment documents. This is different from AD code registration.
• APEDA / RCMC: RCMC (Registration Cum Membership Certificate) is issued by Indian Export Promotion Councils or Commodity Boards. It proves your registration as an exporter with a specific council or board. This certificate is essential for accessing export benefits, incentives, and schemes provided by the Indian government.

Find a buyer for onions in international market

Finding buyers in the international market for onions is vital to growing your export business. It opens doors to new markets and opportunities for your products.

Top importing countries of Onion from India

How to find international buyer for Onion

The process of finding international buyers involves market research, networking, attending trade fairs, and leveraging online platforms. Identifying potential buyers who align with your product and quality standards is crucial.

Pro Tips to Find a Buyer

Enhance your buyer search with effective marketing and promotional strategies. Here are the three things you should do:

• Invest in SEO in order to get visibility in the global market.
• Focus on building a brand from day one and invest in social media.
• Ask your CHAs to refer good buyers for business; they often have a good network of buyers.

Conclusion

The onion export journey presents immense opportunities for businesses to tap into global market demand. With the right understanding of benefits, sourcing strategies, logistics, and buyer connections, exporters can navigate this venture successfully.

Citrus Freight offers dependable ocean freight services globally, ensuring seamless transportation tailored to the needs of perishable exporters. Our extensive network of over 100 fleet locations across India underscores our commitment to bolstering your onion export initiatives.

And there's more; our app connects you to a vast array of reliable onion suppliers. Identifying suitable suppliers and obtaining competitive price quotes becomes effortlessly efficient, empowering you to source top-notch products with ease.