How to Export Agarbatti from India

Last Updated at: Mar 13, 2021
+1
637
Export Agarbatti from India

The burning of incense sticks, or agarbatti, is a common practice around the world, and specifically in Southeast Asia. There are various reasons why people choose to do so, including to serve as an insect repellant, for religious or cultural reasons, and to spread fragrance around the home. Whatever may be the reasons, the market for agarbatti is on the rise globally, leading to them becoming a major export product. The export of agarbatti from India has been rapidly increasing due to their high demand, thanks to yoga gaining popularity in the west. However, there are certain things entrepreneurs need to know before they begin to export agarbatti from India. In this article, we will look at how to export agarbatti from India and the formalities involved in doing the same.

Global Incense Stick Market

The use of agarbatti extends much beyond just religious or cultural practices. They are also an integral part of creating the ambience required for meditation, yoga, and aromatherapy. Since all these have gained popularity in the West, the USA, UK, and Brazil have started importing a lot of agarbatti. India has emerged as a viable export partner due to the availability of cheap labour and raw materials required to make agarbatti.

As a result, India has become one of the world’s largest producers and exporters of agarbatti. Within India, south-Indian states, such as Tamil Nadu and Karnataka dominate the market, with those from Mysore being renowned all over the world. Due to the high turnover of the market, the Indian government has also been paying attention to agarbatti and providing benefits to manufacturers to promote trade and export. Let us now look at the market potential, global trends regarding the market and how to export agarbatti from India.

get import-export license 

Export of Agarbatti from India

Most people seem to think of the agarbatti industry as a small cottage industry. However, export figures tell a different story, as India has been able to fend off strict competition from Vietnam and China in recent years. While these countries produce cheaper incense sticks, India has retained its dominant market share within the industry.

Additionally, incense sticks have started to become popular in the West. Leading to the opening of new markets and global opportunities. India produces agarbatti in various shapes, sizes, and fragrances, with some of the most popular ones being lavender, jasmine, sandalwood, and rose. Since Indian-made agarbatti are considered some of the best in the world, we have been able to attract a vast customer-base from around the world. While the export of agarbatti from India amounts to only 0.04% of our total exports, they show that the product has tremendous potential. 

Between 2012 and 2016, the export of agarbatti from India amounted to $498.02 million, which is a commendable figure. Additionally, exports were growing at a CAGR of around 11.5% between this period amounting to a growth of over $100.02 million. India exports agarbatti to over 175 countries, including the UK, USA, Nigeria, UAE and Malaysia. In recent years, the combined total value of export of agarbatti from India hit 90.64 USD million. India’s top five importers of agarbatti are as follows;

  1. USA
  2. United Kingdom
  3. Nigeria
  4. United Arab Emirates
  5. Australia

Meanwhile, the fastest-growing import nations were South Sudan, Malaysia, Mayotte, and Venezuela.

Challenges Faced by Agarbatti Manufacturers

Of late Vietnamese and Chinese products have been gaining momentum due to them offering lower prices and more quantity. In some areas, this is the case because Indian manufacturers are compromising on quality to reduce overall prices. While in the past Vietnamese incense sticks were around INR 10 to INR 12. This is costlier than Indian-made ones, the gap between both is closing quickly. Additionally, local buyers have a feeling that imported products must be of a higher quality, which is also stifling local interest. Additionally, the industry has not changed much and remains largely a cottage based industry, leading to issues with scaling. This makes it a very labour intensive industry when compared to Chinese and Vietnamese products. 

However, government intervention in the form of schemes, benefit programs, and awareness campaigns have led to more people setting up machines in India. Also, adopting machine-made incense sticks will help manufacturers keep their competitive edge when it comes to the local market. When it comes to exporting agarbatti, being old school seems to be an advantage. Most people prefer hand-rolled incense sticks due to their superior quality. Additionally, exporters have also been able to find new markets, helping them scale and expand even further. Countries like Iraq, Iran, and the Netherlands have slowly started importing more agarbatti from India. While the demand from European and North American markets has been steady, the opening up of new opportunities in Africa and the Middle East will help the industry significantly. 

How to Export Agarbatti from India

  • To export agarbatti from India, entrepreneurs will need to first incorporate their business as a legally acceptable company or entity. They can choose from the various business structures we have available in India, such as
  1. Private/Public Limited Company
  2. Limited Liability Partnership
  3. Partnership Firm
  • Once they have completed incorporation, they must register with the Director-General of Foreign Trade. 
  • Next, they must apply for and obtain a unique 10-digit Import Export Code. Thich serves as a registration number for exporters and importers.
  • Once they have all the documents in place, entrepreneurs can start searching for buyers in foreign markets. They may reach out to Commodity Boards and the Export Promotion Council to gain contacts.
  • As soon as they have a potential buyer insight, companies can start production. Or reach out to suppliers within the country.
  • Lastly, companies will have to partner with a reliable shipping company to ensure the efficient fulfilment of orders.