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Starting an Organic Food Business in India

calendar17 Jun, 2020
timeReading Time: 7 Minutes
Organic Food Business in India

Starting an organic food business in India is a business idea that ensures humongous growth in the years to come. The way the organic food industry is prospering, we must say that the full-fledged evolution in on the cards for this sector. Since Indians are devoting their time to upgrading their health status, the possibilities of attaining success by venturing into this business increases.

Nowadays, people have become more conscious concerning the harmful effects of artificial chemicals in the production of food. Thus, it has further helped the organic food business in reaching a win-win situation. The “organic” trend has become a lifestyle in India.

Starting an Organic food business in India would require you to obtain several permissions as well as licenses from regulatory authorities. These regulatory authorities are working on devising regulations and bringing up new laws and previous laws with an amendment for food and related sectors every day.

What is Organic Food Business?

As per Section 22 of the FSS Act, 2006[1], those food products whose production took place in conformity to specified standards for organic production are known as organic food. Food businesses that deal with buying, selling as well as labeling, etc. of organic food items come under the category of the organic food business.

Requisites for Starting an Organic Food Business in India

Starting an organic food business in India is an excellent opportunity as India is evolving as a hub for organic food products. People have started preferring organic products due to the fact that no synthetic chemicals and fertilizers are used in developing the product. Talking about the cost of production, it’s relatively low in comparison to other forms.

Before starting an organic food business in India, a person must make sufficient gather information about the organic foods along with the things in trending concerning the same. Section 22 of FSSAI is the governing body in the case of organic food business in India. All the food business owners engrossed in organic food business must go for FSSAI Registration, licenses, certifications, and labeling.

FSSAI License and Registration

FSSAI monitors and looks after the operations, registration, procedures along with standards for the smooth functioning of organic food business in India. All the organic food business owners should legally run their organic food business. For this reason, they need to acquire FSSAI registration and license. The following FSSAI license and registration is mandatory to get obtained by food business operators involved in conducting organic food business-

  • Organic businesses having the turnover less than INR 12 lakhs must get the FSSAI Registration.
  • Organic businesses running with the turnover more than INR 12 lakhs need to get the FSSAI State License.
  • Organic businesses having the turnover exceeding the 20 crores figure should get the FSSAI Central License.
  • The validity of this FSSAI food license is five years.

Mandatory Certifications for Starting an Organic Food Business in India

FSS Regulations concerning organic food ensures whether the organic food business has got two mandatory certifications or not. The two mandatory certifications that the organic food business must have are-

Certifications for Starting an Organic Food Business

Labeling

After obtaining the FSSAI license, businesses must ensure that they have the India Organic Certificate for all its products, and further, businesses should display the same on the outer packaging. As per the FSS- Packaging and Labelling Regulations, 2011, the following content must get labeled on all the organic food products in India-

labeled on all the organic food products
Note: *As per the new laws, Companies should acquire certification from either NPOP or PGS-India. Companies should obtain a voluntary logo from FSSAI as it certifies that the food product is organic.

Mandatory Documents for Starting an Organic Food Business in India

Given below are the mandatory documents for starting an organic food business in India-

Documents for Starting an Organic Food Business in India

Why would Organic Food Business in India Witness an Accelerated Demand in the Future?

Given below are the reasons why expectations are high from the organic food sector in India in the coming years-

Export is very high

In India, many food business entrepreneurs have made the investment in the organic food business due to the ever-increasing demand for organic food products amidst the Indian consumers. The Indian organic food sector is receiving accolades not only in the geographical boundaries of India but also outside the nation, or we can say on a global level. There is an increase in the export of healthy organic products as the agro-climatic conditions of India, along with the acquired tradition of organic farming, is supportive for organic food business in all the way. After analyzing various reports, we observed that India had exported organic products of Rs 5151 crore in the financial year 2018-2019. The export trend is likely to increase in the years to come.

Insignificant Difference in Prices

The difference between the prices of organic and inorganic food is insignificant. Forget about the price, when you are getting health benefits by using organic food items. Consumption of organic food ensures the safety and security of human health as it is known for stopping the body from taking an unnecessary amount of fertilizers as well as pesticides. Therefore, we must say that thinking about a few higher pennies doesn’t matter at all with regard to health concerns. Furthermore, it brings a reduction in the risk of health hazards as well as safeguard your hard-earned money from getting wasted in medical expenditures in the future course of time.

Digital Awareness & E-Commerce Facilitation

The evolution of the digital platform has increased the literacy level of online users with regard to organic food as they always crave to gain more insights into the organic food sector by exploring various sites. An increase in access to information is also due to the reduction in internet charges, along with the rising number of smartphone users. Besides this, e-commerce platforms do the job of a facilitator reaching in the zone of potential customers all over India.

 It was the main reason behind the escalating rise of organic food in Tier 1 cities at the initial level, and eventually, Tier 2, as well as Tier 3 cities, also witnessed the upward trend.  Competition in the organic food industry has increased in the last few years as the number of new entrants in this sector is rising every day. In the upcoming years, the demand for organic food would increase in Tier 2 and Tier 3 cities. Starting an organic food business in India would be a wise decision after looking at the growth prospects.

Wholehearted Support of Indian Government

The government of India is poking around to support as well as promote organic farming in India. The government has crafted various plans and strategies and has implemented them in uplifting the organic food sector in the Indian market. As the government is providing financial aid to farmers, they are adopting organic farming. There are various schemes that the government has introduced to give the sector a much-needed push.

Some popular government schemes concerning the growth of organic food business in India are RKVY expanded as Rashtriya Krishi Vikas Yojana, National Mission for Sustainable Agriculture (NMSA), NFSM expanded as National Food Security Mission (NFSM), and MIDH expanded as Mission for Integrated Development of Horticulture (MIDH). The government has also implemented NPOP expanded as National Programme for Organic Production, which encompasses the promotion of organic farming, the programme of accreditation, etc.

Read our article: Food Packaging and Labelling Regulations: The Complete Guide

Business Ideas Concerning the Organic Foods Concept  

The best business ideas for those who are interested in starting an organic food business in India but they are not too sure about the perfect one for them-

Organic Food Consultant

There is an opportunity for a person to become a diet consultant for those people who don’t know about the perfect organic food for them as per their requirement and are getting stuck every time they delve their thoughts into this sector. Organic food consultant can help them in getting the right food product meeting their demands. Starting an organic business in India for these people doesn’t require office and investment in setting up this business would be less than Rs 5000.

Organic Food Supplier for Pets

One can think of venturing into the business of supplying organic foods for pets to homes or the veterinary clinics having pets. Organic foods are not only a perfect match for human health, but also they are beneficial for pets as well. The investment in starting an organic food business in India for supplying foods to pets requires a low investment of Rs 5000. After commencing this business, one can supply organic food products for pets at reasonable rates.

Imparting Knowledge on How to Grow Organic Products

Most of the people have a lack of proper knowledge regarding organic food products, which products to grow as well as how to grow. Thus, one can start imparting knowledge either via video tutorials or stepwise guide in articles along with discussing all the required information for starting an organic food business in India. Again, it’s a low investment business with chances of higher success.

Organic Party Planner

The investment required in starting an organic food business in India with respect to party planner is Rs 5000. An organic party planner can take further steps to grow the supplements and supply them to the venues. Cases in which the guests’ number crosses the suppliers in the home, then one starts looking for the options, but organic restaurants are generally expensive. These people get support from an organic party planner.

Efforts of Government in favor of Organic Food Business in India

  • Amid COVID-19 Pandemic 2020, Finance Minister Nirmala Sitharaman has made an announcement that the Indian government is all set to grant Rs 10,000 crore funds for the promotion of organic food produces in India.
  • The Indian government has formed the Participatory Guarantee System in order to provide subsidies to small farmers. Pradhan Mantri Kaushal Vikas Yojana (PKYK Scheme) extends support to this initiative of the government.
  • Certification standards for individuals as well as organizations with an annual turnover below 12 lakhs for the promotion of organic farming would get relaxation from FSSAI.
  • In the year 2017, the government supported the organic farmers as well as associate food businesses by launching the Jaivik Bharat Logo along with the India Organic Integrity Database Portal.
  • The government has brought outlaws that are responsible for converting farmlands into organic farms that would lend the helping hands to the farmers. A declaration was made in which Sikkim became the organic state due to its involvement in the production of organic items only.
  • Further, the government has affirmed that the organizations with annual turnover not exceeding the Rs fifty lakhs figure would engage in selling organic food items without PGS India/NPoP Certification. Nevertheless, such organizations won’t be permitting the usage of the Jaivik Bharat logo. 
  • Going by the various reports, we came to the point that the organic food industry in India would grow by 20-30% in the forthcoming time period.

In the Nutshell

Starting an organic food business in India is a keenly-priced affair. However, it requires business owners to obtain FSSAI License, registration, certifications, India organic certificate, etc. for easy running of the organic food business. Furthermore, the government is taking the required measures for the Sureshot victory of this sector. Organic food products businesses can bank upon our Corpbiz team for expert help.

Read our article: What are the Responsibilities of Food Business Operators in India?

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