Concept & Licenses Required to Start a Cocoa Beans Export Business

“Cocoa”is of the significant commercial crop that is traded at a large level in the global market. Further, India is making continuous efforts and attempts to improve its export of cocoa beans, which will ultimately contribute more towards foreign exchange earnings. Therefore, nowadays, one of the most profitable businesses for budding entrepreneurs is to start Cocoa beans export business in India.

At present, there are 10 to 12 multinational companies and firms that are engaged in the field of cocoa beans industry and exports products, such as Beans, Cocoa Butter, Chocolates, Cocoa Powder and other Cocoa based items to other countries.

In this blog, we will discuss the concept, procedure, and licenses required to start Cocoa beans export business in India, together with the recent growth statistics and ongoing trends.

Reasons to Start Cocoa Beans Export Business in India

Cocoa and other Cocoa based items are export oriented commodity. At present, in India, there are 10 to 12 multinational companies that are operating and engaged in the export of Cocoa beans and other related items. Further, in the financial year 2018 to 2019, India had earned a foreign exchange of Rs 849 crores just from the export of cocoa beans and other related items.

Further, the reasons to Start Cocoa Beans Export Business in India are as follows:

1. Emerging Sector in the Foreign Market;
2. Easy Way to Reach Global Market;
3. Comparatively Low in Cost than Other Countries;
4. In the month of January 2020, the Total Export Value of Cocoa Beans from India was US $0.08 million;
5. Continuous Increase in Demand;
6. More Countries are Choosing India for Importing Cocoa Beans, such as Netherlands;
7. Increasing Global Acceptance of Indian Cocoa Beans;

Growth of Cocoa Beans Export Business in India

The growth rate of Cocoa Beans Export Business in the past few years can be summarised:

1. According to a report published by the “Techsci Research”, the Indian Choco Market is estimated to grow at Compound Annual Growth Rate (CAGR) over 16% to cross US $3.3 billion by the end of 2023
2. Based on a report published by “The Business Wire”, the India Coco Beans Industry is projected to surpass US $1833. 28 million by the end of year 2024;
3. According to a report published by “6Wresearch”, the Chocolate Market of India is anticipated to reach at CAGR 19% by the end of 2023;
4. Based on a report published by “STATISTA”, some of the observations made regarding Cocoa Beans Export Market are as follows:
5. It is projected that the revenue generation from the Cocoa Market is projected to reach at US$175.5million by the end of 2021;
6. The Cocoa Beans Market is estimated to grow annually at CAGR 6.1% in between 2021 to 2025;
7. In the global comparison, India will generate most of the revenue in the financial year 2021 from the United States, i.e., US $3.530 million;
8. In the year 2021, the average per capita consumption will be 0.02 kg;
9. Based on a report published by “Connect 2 India”, Netherlands is the top importer of Indian Cocoa Beans, and out of the total export value of US $0.5 million, Netherlands imported 78.89% of the cocoa beans shipment alone;

Major Players of Cocoa Beans Export Sector

The major player of the Cocoa Beans Export Sector in India are as follows:

1. Flying King Exports & Imports Company;
2. S. S. Exports Pvt Ltd;
3. M/S WalyGandega Ltd;
4. Sri Rayar Exim Ltd;
5. Ginaagro PLC;
6. KK Quality Foods Inc;
7. Gopra Exim;
8. Zayqa Bakery;
9. Siddhivinyak Corporation Pvt Ltd;
10. GMC Engg Services Ltd;

Major Importers of Cocoa BeansFrom India

The major importers of the Indian Cocoa Beansvariety are as follows:

For the Financial Year 2019

As per a report published by the AgriXchange, APEDA^[1], on their official portal, the latest and the top 20 importers of the Indian Cocoa Beans for the year 2019 are as follows:

S. No.	Country Name	Total Quantity	Total Value(USD Million)
1	U S A	7772.71	31128.26
2	Indonesia	1818.06	13414.20
3	Turkey	1676.53	11590.30
4	Nepal	1704.96	7080.00
5	Brazil	898. 35	6575.67
6	Saudi Arab	919.63	6467.23
7	Philippines	784.87	5125.97
8	United Arab Emirates	897.03	5106.87
9	Malaysia	785.10	4124.23
10	Netherland	1265.41	4119.88
11	Germany	917.01	3506.31
12	Hong Kong	273.30	3392.05
13	Thailand	458.82	2816.45
14	Bangladesh	480.37	2035.97
15	Sri Lanka	285.74	1796.60
16	Togo	1020.84	1646.90
17	Egypt	196.71	1281.46
18	Kuwait	200.22	1263.15
19	Singapore	163.28	1078.17
20	Nigeria	731.67	1041.08

For the Financial Year 2020

As per a report published by the Connect 2 India, on their official portal, the latest and the top 15 importers of the Indian Cocoa Beans for the financial year 2020 are as follows:

S. No.	Country Name	Total Quantity	Value (USD Million)	Total Share (%)
1.	Netherlands	33510	0. 15	78. 95
2.	Canada	950	0. 01	5. 26
3.	Japan	1000	0. 01	5. 26
4.	Malaysia	1030	0. 01	5. 26
5.	United Kingdom	2550	0. 01	5. 26
6.	Australia	100	0. 0	0. 0
7.	Bahrain	0	0. 0	0. 0
8.	Belgium	80	0. 0	0. 0
9.	Czech Republic	2250	0. 0	0. 0
10.	France	60	0. 0	0. 0
11.	Germany	300	0. 0	0. 0
12.	Nepal	100	0. 0	0. 0
13.	New Zealand	0	0. 0	0. 0
14.	Russian Federation	0	0. 0	0. 0
15.	Saudi Arabia	510	0. 0	0. 0

Note: It shall be taken into consideration that in the financial year 2020, due to the COVID – 19 pandemic, the demand for cocoa beans was reduced to a certain extent.

Factors To Consider To Start Cocoa Beans Export Business In India

The factors to consider to start cocoa beans export business in India are as follows:

1. Incorporate a Firm or Company;
2. Obtain the Licenses Needed to Start Cocoa Beans Export Business in India;
3. Choose a Target or Focus Country;
4. Engage with the Cocoa Suppliers;
5. Find Prospective Buyers;
6. Examine Market Competition;
7. Set the Profit Margin;
8. Understand the Laws of the Target or Focus Country;
9. Decide Payment Method of the Focus Country;
10. Determine the Mode of Shipment;

Documents Required To Start Cocoa Beans Export Business in India

The documents required to start red cocoa beans business in India are as follows:

1. Certificate of Registration;
2. PAN Card of the Applicant;
3. Identity Proof in the form of Aadhar Card, Voter ID, and Driving License.;
4. Address Proof of the Registered Office
5. In case of Self-owned Property, a copy of the Sale Deed;
6. In the case of Rented Property, a copy of the Rent Agreement;
7. Utility Bills, such as Electricity Bills or Water Tax Receipt;
8. A copy of MOA and AOA;
9. A copy of LLP Agreement, in the case of Limited Liability Partnership;
10. A copy of Partnership Deed, in the case of a Partnership Firm;
11. GST Registration Certificate ;
12. FSSAI License;
13. Import Export Code (IEC);

Licenses Required To Start Cocoa Beans Export Business in India

The licenses required to start Cocoa beans export business in India are as follows:

Company Registration

To start Cocoa beans export business in India, the applicant needs to first obtain either a Private Company Registration or an LLP Registration in India.

However, it shall be relevant to mention that the business format which is most suitable to start cocoa beans export in India is Limited Liability Partnership as it offers benefits of both a Private Company and Partnership Firm.

FSSAI License

Every FBO or the person dealing with the food or food related items must apply for FSSAI License in India. Therefore, it is one of the significant license to start cocoa beans export business in India.

ISO 22000

Nowadays, most of the international buyers prefer to buy only those edible items that are from ISO 22000 certified entities. Therefore, the company needs to mandatorily apply for ISO 22000 to start cocoa export business in India.

GST Registration

In India, it is compulsory for every IEC Holder to apply for GST Registration irrespective of the aggregate annual business turnover.

APEDA Registration

Any individual who either wishes to start cocoa beans export business or want to engage and operate in Scheduled Products needs to obtain APEDA Registration from the authorities designated.

Further, the term “Scheduled Products” includes the items as follows:

1. Pickles, Papads, & Chutneys;
2. Honey, Sugar, and Jaggery Products;
3. Cocoa and Coco Products;
4. Meat & Meat Products;
5. Floriculture & Floriculture Products;
6. Poultry & Poultry Products;
7. Cereal & Cereal Products;
8. Dairy Products;
9. Guar Gum;
10. Confectionery, Biscuits, & Bakery Products;
11. Fruits, Vegetables, & their Products;
12. Groundnuts, Peanuts, & Walnuts;
13. Herbal & Medicinal Plants;
14. Alcoholic & Non Alcoholic Beverages;

Import Export Code

Any individual or a business entity that wants to start Cocoa beans export business in India must obtain IEC Registration by filling an online application on the official DGFT (Director General of Foreign Trade) website.

Further, it is a must requirement to start Cocoa beans export business in India.

Conclusion

At times, a simple looking online process might turn out to be a clutter of intricacies for an applicant. Therefore, it is advisable for the applicant who wants to start cocoa beans export business in India to contact Swarit Advisors, our experienced and dedicated professionals are there to solve out all the issues and hardships pertaining to licenses and registrations.

Also, Read: How to Start Pharmaceuticals Export Business