People around the world use aggarbatti (aka Incense stick) to serve different purposes. Some people use it to repel the insect; others use it for religious purposes or lit them up to spread fragrance. The major demand for the Incense stick comes from the South Asian Nations. The consumption of these products is rapidly increasing in other countries as well. Such an increase in demand has encouraged the manufacturers to raise the production rate in India. Since it is a profitable business model considering the prevailing demand scenarios, startups can capitalize on the same and reap good profit consistently. However, to export aggarbatti to overseas nations, one has to know certain things, which we have added in this write-up. After going through the below information, you will be able to export agarbatti abroad with ease.
Overview of Global Agarbatti Market
The use of agarbatti is not only confined to religious or cultural practices. They are also used to create the ambiance and lively environment for meditation, yoga, & aromatherapy. The countries like Brazil, the USA, and United Kingdom have started importing agarbatti in bulk owing to the increasing demand.
India is one of the largest exporters of incense sticks in the world. The abundance of raw material and availability of cheap labor contributed to the improved agrabatti’s production and export. Tamil Nadu & Karnataka are the two states where the production of the incense stick is relatively higher. Due to the high market turnover, India’s Government has been taking different measures to boost agarbatti production and export in India. India’s top five importers of incense sticks are as follows;
- United Kingdom
- United Arab Emirates
Export of Incense Stick from India
At present, agarbatti export from India only accounted for 0.04% of country’s total exports. The figure seems minor, but it does not express the entire story. Incense sticks are now finding their way in all major markets worldwide, irrespective of the economic or political climate.
India-made incense sticks are being exported to over 175 nations globally. In the year 2020-21, India has exported incense sticks worth 90.64 USD million. The total volume in the same year was around 31482467. Meanwhile, the fastest-growing import countries were Malaysia, Venezuela, South Sudan, and Mayotte.
Agarbattis export from India has reached new height in the span of 10 years. Most people considered the agarbatti industry as a small cottage industry. But, export figures say otherwise, as India has been able to resist tough competition from China and Vietnam in the past few years. While these nations produce affordable incense sticks, Indian has grabbed its dominant market share within the industry.
Additionally, incense sticks have started to gain popularity in the Western part of the world, leading to global opportunities and new markets. India produces wide varieties of agarbatti, with some of the most renowned ones being jasmine, lavender, rose, and sandalwood. Since Indian-made incense sticks are praised globally for their best quality, we can grab a wider customer-base worldwide.
Read our article:How to Export Goods from India to Overseas Markets?
Challenges Encountered by Agarbatti Manufacturers
Lately, Chinese and Vietnamese products have been gaining pace due to lower pricing and bulk quantity. Their offerings are much more superior to Indian products on account of quality and price. The aggarbatti manufacturing in India has not changed a great deal and largely remains a cottage-based industry, leading to scaling problems. This makes it a labor-intensive industry in comparison to Vietnamese and Chinese products.
However, government intervention in the form of awareness campaigns and schemes has led to more individuals setting up machines in the country. Also, the advent of machinery keeps the product quality intact and allows the producer to sell it at reasonable pricing to the local market. However, that doesn’t mean the demand for hand-rolled incense sticks has perished entirely. Exporters have also been able to locate new markets, helping them expand even further. Nations like Iran, Iraq, and the Netherlands have also shown interest in buying the Indian-made agarbatti. While the demand from North American & European markets has been steady, the influx of new opportunities in the Middle East and Africa will considerably help the industry.
Procedure to Export Agarbatti Abroad from India
- To export agarbatti worldwide, entrepreneurs will need to register their business as a legally acceptable company or entity. They can select from the different business structures available in India, such as
- Private/Public Limited Company
- Limited Liability Partnership
- Partnership Firm
- Once they completed the registration, they must head over the online portal of the Director-General of Foreign Trade (DGFT) to avail the IEC registration, aka Import Export Code. The code will help them export the product to other nations. It is mandatory to obtain and cannot be overlooked.
- After obtaining the IEC registration, entrepreneurs should initiate market research to identify viable buyers in foreign markets. They may reach visit the Export Promotion Council and Commodity Boards to gain contacts.
- After finding a suitable customer base, entrepreneurs can trigger the production and set up an optimal supply chain management by contacting the eligible suppliers and vendors.
- Lastly, companies must visit a reliable shipping company to sign an agreement to ensure the efficient fulfillment of orders.
Documents Required to Export Aggarbattis Abroad
- Proforma Invoice.
- Export Order/Purchase Order.
- Commercial Invoice.
- Packing List.
- Certificate of Origin.
- Bill of exchange.
- Letter of Credit.
- Inspection/Quality check.
With the information above, anybody can export agarbatti to an overseas destination without any hassle. The majority of issues sneaked in during the company registration process. If you seek any assistance in this regard, feel free to connect with CorpBiz’s assistance without any second thought.
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