Incorporate a Profitable Cocoa Export Business from India

Cocoa is typically a commercial crop that is mainly traded in the global market at a large level. Nowadays one of the most profitable businesses for entrepreneurs is starting a Cocoa beans export business in India. This is because India is continuously trying to improve the export of cocoa beans, as it will contribute towards foreign exchange earnings.

The cocoa industry has gradually increased in India, there are mainly 10 to 12 multinational companies that are involved in exporting cocoa-related products like cocoa beans, butter, cocoa powders, chocolates, and various other cocoa-based goods. If you are interested in starting a cocoa bean export business, then you should understand the process first. This includes sourcing high-quality cocoa beans, ensuring proper packaging and transportation, and finding reliable buyers in other countries.

You will need some licenses and registrations, like an Importer Exported Code (IEC), a Food Safety and Standards Authority of India, FSSAI license, and various other certificates depending on the destination country's requirements. In this competitive market, you should keep up with industry trends like the increasing demand for organic sourced cocoa, this can give your business an extra lift.

What are Cocoa Beans?

Before you are going to start a cocoa business you should know what cocoa beans is. The cocoa bean is a kind of dried and fully fermented seed of Theobroma cacao, which is also known as cocoa. The cocoa butter that is the fat and cocoa solid is a mixture of nonfat substances that can be extracted from the cacao tree. The cocoa beans mainly belong to the Amazon rainforest. They are the foundation of various products like chocolate, an indigenous Mexican drink, and Mesoamerican foods that include tejate.

Export Business of Cocoa Beans Growth in India

In India, there has a significant growth in the cocoa and chocolate market in recent years:

1. Chocolate Market Growth:

The market for chocolate has rapidly increased in India. By 2023, the expected growth at the annual rate was over 16% and it reached the value of $3.3 billion. This is an indication that the demand for chocolate products is rising in the country.

2. Cocoa Beans Industry:

The cocoa beans have crossed $22.55 billion in the year 2024. This shows the increasing demand and importance of cocoa beans for export and domestic use.

3. Additional Trends:

• The cocoa beans market was predicted to grow at an annual rate of 6.1%, between the years 2021 to 2025.
• In the year 2021, the average consumption used to be very low, which was about 0.02 kg per person in the year 2021. This signifies that the cocoa market has plenty of room for further growth in the future.
• The U.S. has contributed to the revenue of India’s cocoa exports, in the last financial year that has ended in March 2024 India generated Rs.258 crore from cocoa exports. Almost 8,636 tons of cocoa has been exported during this period.

4. Key Importer Information:

The Netherlands was one of the top importers of Indian cocoa beans in the recent years, they almost purchase nearly 20 to 25 % of India’s total cocoa bean exports, which is almost $2.21 billion. This plays a massive role in the global cocoa trade.

Major players in the Cocoa Beans Export Sector

In the Cocoa Beans industry, there are some big players who operate in this sector. It's better to know about your competitors. There are some of them mentioned below:

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

The Factors You Should Consider to Start a Cocoa Beans Export Business in India:

1. Legal and Regulatory Framework

   • Register Your Company:

   • At first you have to register your business as a company or firm officially before you legally operate your export business in India.

2. • Importer Exporter Code (IEC):

   • If you want to operate an export business, the primary requirement for this category is the Importer Exporter Code (IFC). That is why first you have to apply for the Importer Exporter Code (IFC). You can apply for the IFC code from the Directorate General of Foreign Trade (DGFT). You cannot import or export any goods across countries without this code. This is a mandatory requirement to operate in International Trade.

3. • Additional documents and certification:

   • It depends on the destination country you are willing to operate exports. You may require some additional documents and certifications for some specific countries. For cases, like food exports often require approval from the Food Safety and Standards Authority of India (FSSAI).

4. • Customs Clearance:

   • The customs clearance process in India involves the preparation of various documents, like:

•     Bill of Entry

• This is a legal document that is required to clear the customs for goods to be exported.

• Commercial Invoice:

• You have to provide the list of the products to be exported.

• Packing List:

• This document specifies the information on how the goods are packed for the shipment.

  If you keep this documents with you, this can ensure it can ensure you a smooth export process having the compliance whit the Indian laws.

     2.  Market Research and Analysis

• Selecting the Target Countries

You have to identify the countries where cocoa beans are in very high demand. You can find such as which country has more chocolate manufacturing industries, as these countries will have high requirement of cocoa bean to continue the huge production. You should study and learn about the rules and regulations of these countries for importing cocoa beans.

• Understand Your Competition

You have to analyze the companies that already exporting cocoa beans to other countries. Once you analyze their strategies like the quality and pricing standards of those businesses, it can help to stand out as your business.

• Analyse the Market Demand :

You should be sure about the market you are selecting to export, has a high demand for cocoa beans. You should study about the consumption trends and industry reports.

• Set Your Prices:

You have to set the price of your cocoa beans wisely, after covering all the expenses like production, taxes, transportation, and duties. It should be competitive with the market prices so that it remains attractive to the buyers.

• Marketing Plan:

You should think of unique ways to promote your cocoa beans so that your product or good creates a different identity in the market. You can do this by advertising online, participating in trade fairs, or building connections with importers and distributors.

     3.  Supply Chain and Logistics

• Build relationships with the suppliers:

• Partner with cocoa bean suppliers who can provide you with high-quality beans. This can help you get access to high quality beans which will further help you maintain the image in the market.

• Assure the quality:

You have to make sure the quality of the beans meets the quality and safety standards of the target countries' requirements.

• Organize the Logistics:

• • You have to plan the transportation efficiently, so that your product is delivered to the buyers on time.
  • You should have a proper storage place to keep the beans fresh and avoid any damage.
  • You have to use strong and secure packaging so that the beans stay protected during the time of shipping.

• Method of Payments:

Agree with the terms and conditions of the buyer of the payment, such as bank transfers, letters of Credit, and other secure options. Make sure to verify the terms and conditions before agreeing with the terms and conditions.

• Financing the Trade:

You can consider the trade financing options to cover the export costs like production and transportation costs, if you need.

• Shipping Mode Selection:

You have to decide the shipping method of the product. You can either send your assignment by airway or ship. These factors can affect various things like delivery speed, cost, and destination requirements. You have to choose the process of shipping as per your requirements.

If you follow the above-mentioned steps, you will be able to build a strong and organized cocoa bean export business. You just need to plan and follow these steps properly. It should be ensured your business is maintaining all the legal norms so that you don’t face any kind of legal compliance.

Procedure for Exporting Cocoa from India

When you are exporting cocoa from India it involves multiple steps like legal, financial, and logistical steps. The process ensures compliance with international trade laws and quality standards. Below are some steps mentioned to successfully export Cocoa from India and operate a legal business in India:

        1.  Legally Register Your Business

Before exporting, you must legally register your business. There are various segments of businesses.  You have to identify which category your business falls under. The categories are mentioned below:

• Sole Proprietorship:

This category describes the category, where a single person owns a business with very minimal compliance.

• Partnership Firm:

This category describes a business, where two or more partners are sharing the responsibilities of the business or operating the business.

• Limited Liability Partnership (LLP):

This is the business category where a partnership with a limited liability partnership, where a business structure that combines the flexibility of a partnership with the liability protection of a company.

• Private Limited Company:

A Private Limited Company is an independent business where the owner's assets are protected, meaning they are not personally responsible for the company’s debts or losses.

      2.  Obtaining the Importer-Exporter Code (IEC)

The Importer Exporter Code (IEC) is mandatory for operating any exports in India.The Directorate General of Foreign Trade (DGFT) issues this. Without an Importer Exporter Code (IEC), you cannot export goods from India.

How Can You Apply for Importer Exporter Code (IEC):

First you have to visit the DGFT website. Then you have to submit the documents there. They are mentioned below:

• PAN card of the company or the owner of the business.
• Aadhaar card or voter ID of the owner.
• You have to provide the bank account details with a canceled cheque.
• You have to provide the address proof of the business premises.

   3.   Registration for the Agricultural and Processed Food Products Export Development Authority (APEDA)

   The Agricultural and Processed Food Products Export Development Authority (APEDA) promotes cocoa exports.

Why Register with APEDA?

• Access to export subsidies and financial assistance.
• Helps in connecting with international buyers.
• Provides market intelligence and trade reports.

You have to visit the APEDA portal, fill out the online form, and submit the required documents.

       4.  Obtain FSSAI License

Since cocoa is a food product, a Food Safety and Standards Authority of India (FSSAI) license is required for exports. This ensures the products meet the food safety norms.

Types of FSSAI Licenses:

• Basic License:

For small businesses with turnover up to ?12 lakh.

• State License:

For medium businesses with turnover between ?12 lakh and ?20 crore.

• Central License:

Mandatory for large-scale exporters and businesses operating across multiple states.

Apply through the FSSAI portal, submit the necessary documents, and receive approval.

5. Find International Buyers

To successfully export cocoa, you must find buyers in foreign markets.

Ways to Find Buyers:

• B2B Marketplaces:

You can register on platforms like Alibaba, TradeIndia, and Indiamart.

• Export Promotion Councils:

You may join the councils like Federation of Indian Export Organisations (FIEO) for trade leads.

• Trade Fairs & Exhibitions:

Participate in global cocoa trade fairs to network with international buyers.

Before finalizing a deal, verify the buyer’s credentials. Use a Letter of Credit (LC) or advance payment to ensure secure transactions.

6. Conduct Quality Checks

Cocoa quality plays a crucial role in pricing and acceptability. Ensure that your product meets the international standards.

Key Quality Parameters:

• Moisture Content:

The moisture content should be below 7.5% to prevent any kind of spoilage in the stored products.

• Fermentation Quality:

When the Cocoa beans are properly fermented cocoa will get higher prices in international markets.

• Pesticide Residue:

Cocoa beans must meet the safety and quality regulations required for the designated importing countries.

Get the quality certification from a government-approved food testing lab.

7. Proper Packaging and Labeling

The freshness, shelf life, and market appeal of cocoa are dependent on the packaging. You should make sure the quality of the packaging meets the required quality.

Best Packaging Methods:

• Jute Bags :

Jute bags are widely used for cocoa bean packaging as they allow air circulation which prevents any kind of spoilage in the product

• Vacuum-Sealed Containers :

The vacuum-sealed containers are used for cocoa powder or butter to prevent contamination.

Labeling Requirements:

• Product name (Cocoa Beans/Powder/Butter)
• Net weight and batch number
• Date of packing and expiry date
• Country of origin (India)
• Storage instructions

Labels must comply with the importing country’s regulations.

8. Arrange Logistics and Shipping

You should focus on selecting the right logistics partner to ensure smooth delivery of your cocoa assignment. There are the shipping methods mentioned below:

Common Shipping Methods:

• Sea Freight:

This transportation process is ideal for bulk shipments, lower cost but slower transit time.

• Air Freight:

This process of transportation is very fast to send your delivery but it is much more expensive.

In this process of transportation, you will require some specific documents, those documents are mentioned below

The Essential Export Document list:

• Commercial Invoice:

Details of the transaction prices, quantity, and terms.

• Packing List:

Specifies the packaging method and weight.

• Bill of Lading (BOL):

The document is the proof that the goods were shipped.

• Certificate of Origin :

Confirms the goods were produced in India which is issued by the Chamber of Commerce.

• Phytosanitary Certificate:

You have to ensure that the product meets plant health standards. After that, you have to submit these documents to Indian Customs for clearance.

10. Receive Payment and Claim Export Incentives

To export cocoa, you must have to complete the customs procedures and file taxes.

Customs Process:

• You have to submit an Export Declaration and shipping documents through the ICEGATE portal.
• Then you have to pay any export duties if it is applicable.
• Obtain clearance from customs after inspection.

GST and Taxation:

• Cocoa exports are zero-rated under GST.
• Apply for a Letter of Undertaking (LUT) to avoid paying GST upfront.
• File the GST returns and claim the export refunds if it is applicable.

10. Receive Payment and Claim Export Incentives

The last step is to secure payment is the final step in the export process.

Payment Methods:

• Letter of Credit (LC):

You should ensure the payments are safe through banks.

• Advance Payment:

This process of payment is recommended for first-time buyers.

• Bank Transfer:

According to the guidelines of the Foreign Exchange Management Act (FEMA).

Government Incentives for Cocoa Exporters:

• Remission of Duties and Taxes on Exported Products Scheme (RoDTEP) is the refund of unrebated taxes.
• Market Access Initiative (MAI) is the financial support for export marketing.

Lastly, you have to ensure the payments you receive are through any legal banking channels or not and it must comply with RBI guidelines.

Benefits of Cocoa Export Business from India

Cocoa is in high demand worldwide which makes it a promising business for Indian exporters. With the right approach, you can turn this into a profitable enterprise. Below are some points why exporting cocoa from India can be a smart choice:

1. Huge Global Demand

Chocolate, beverages, and even beauty products rely on cocoa. Countries like the USA, Germany, and the Netherlands import very large quantities of cocoa, which creates a steady market for Indian cocoa exporters.

2. Good Profit Margins

Cocoa prices often remain stable, and high-quality beans fetch even better rates. That’s why if you focus on proper processing and fermentation, you can earn well in the international market.

3. Government Support for Exporters

The Indian government encourages cocoa exports For that the government provides some benefits like tax refunds, APEDA registration, subsidies, etc. These incentives make it easier for you to establish and grow your Cocoa export business.

4. Ideal Climate for Cocoa Farming

There are some conditions required for the growth of Cocoa farming. In India, the southern states like Kerala, Karnataka, Tamil Nadu, and Andhra Pradesh have the perfect climatic conditions for growing cocoa. This ensures a steady supply of exports for the exporters.

5. More Business Opportunities

Instead of just exporting raw cocoa, you can also sell cocoa butter, cocoa powder, or even chocolate-based products to expand your business and increase earnings.

6. Easier When You Have Trade Agreements

India has trade deals with many countries, which helps in reducing export duties and making Indian cocoa more competitive globally. This helps exporters sell at better prices.

7. Rising Demand for Organic Cocoa

In recent times more people are choosing organic products, and cocoa is not an exception. If you focus on organic cocoa farming, you can enter the premium market where the buyers are willing to pay more.

Conclusion

Cocoa export from India is a fantastic business opportunity, the rise in the global demand is also contributing to making this business successful. The strong government support, and ideal farming conditions are the extra advantages. Once you securing the right licenses, ensuring quality, and following a well-planned export strategy, you can tap into a profitable international market.

How Online Legal India Can Help You

If you are thinking about starting your cocoa export business. The first step is getting your Importer Exporter Code (IEC) is a must-have for any international trade. Online Legal India makes the process simple and stress-free for you, as they can assist you file for the Importer Exporter Code (IEC). They have professionals who can guide you throughout the process. They can also guide you so that you don’t face any kind of delay, as they will check for any errors in the documentation.