Introduction: Agricultural Sector of India
India has the second-largest arable land resource in the world. India has all 15 major climate zones and 20 agricultural climate zones. In addition, the country is home to 46 of the world's 60 soil varieties. India's main exports are spices, pulses, milk, tea, cashew, and jute, with wheat, rice, fruits and vegetables, sugarcane, cotton, and oilseeds coming in second and third, respectively. India is also the world's second-largest producer of fruits and vegetables, as well as the world's largest mango and banana grower. In the 2019-20 crop year, food grain production reached a new high of 296.65 million tonnes. In FY 2021-22, the administration wants to increase production by 3.9 percent. Consumer spending in India will return in 2022, expanding by up to 7% after a pandemic-related decrease. Private consumer spending is expected to increase to Rs. 80.8 trillion (US$ 1.08 trillion) in FY22, up from Rs. 75.6 trillion (US$ 1.01 trillion) in FY20.
Table of Contents
- Introduction: Agricultural Sector of India
- Basic Features of Agriculture License in India
- Types of Agricultural Licenses
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Agriculture plays an important role in the Indian economy. Agriculture in India is the backbone of the entire economy. The performance of a developing country's agriculture and allied sectors is critical to its economic transformation. This industry is important for rural livelihood, employment, and national food security. It also happens to be India's most important source of income. The proportion of the Indian population that depends directly or indirectly on agriculture for employment opportunities is higher than in any other sector in India, with as many as 70% of rural households still relying primarily on agriculture for a living, with 82 percent of farmers being small and marginal farmers. It provides raw materials to industries, food to the entire population, and livestock feed and fodder. Agriculture is also a significant source of revenue for both the federal and state governments. Indian agriculture holds an honorable position on the international stage, generating valuable foreign exchange for the country. However, its contribution to national income is decreasing due to higher growth in secondary and tertiary sectors, reflecting the economic development process and structural transformation.
- Main Source of Livelihood: Indian agriculture provides livelihood directly and indirectly to about two-thirds of the total population of the country.
- Contribution to National Income: Even today, agriculture plays a critical role in India's economic development. Although the agriculture sector's contribution to national income has decreased, it still accounts for the majority of the country's Gross Domestic Product (GDP). Agriculture's contribution of the country's GDP has decreased from a peak of 55.4 percent in 1950-51 to 18.2 percent in 2014-15. Agriculture and related sectors contributed 16.5 percent of the country's Gross Value Added (GVA) in 2019-20 at current prices.
- Source of Industrial Development: Agriculture contributes significantly to industrial development by providing industrial raw materials such as cotton for textiles, seeds for the oil industry, and sugarcane for sugar mills.
- Supply of Food Grains: Agriculture's most essential contribution is to ensure food security for the country's growing population. India became self-sufficient in food grain supply during the planning era as a result of agricultural progress.
- The Market for Industrial Products: Because two-thirds of India's population lives in villages, increasing rural purchasing power is critical for industrial development. Farmers' purchasing power increased after the green revolution as their income increased. An rise in agricultural income may result in a growth of the market for industrial goods.
- Contribution to International Trade: Agriculture is extremely significant in international trade. Fertilizers, harvesters, and thrashers are prominent key commodities meant especially for the agriculture sector of the economy. Jute, tea, coffee, and spices are among the country's well-known traditional exports. Exports provide foreign exchange, which India requires to import defense equipment, crude oil, and other items.
- Importance in Trade and Services: Agriculture supports a large portion of the country's trade and services. Agriculture is essential for many services such as transportation, finance, and storage.
- Source of Government Revenue: Agriculture is a significant source of revenue for the country's central and state governments. The government is benefiting greatly from increased land revenue. Other industries, such as railways and highways, rely heavily on the transportation of agricultural goods for revenue.
- A Wealth of the Nation: The agriculture sector accounts for a major portion of the country's wealth. In terms of fixed assets, the land is India's most valuable asset. Furthermore, billions of rupees are invested in major and minor irrigation projects.
Basic Features of Agriculture License in India
- Import-Export Code (IEC) Number is required for all exporters and importers.
- In order to increase agricultural exports, the government established numerous authorities through various acts.
- Exporters are given financial aid.
- Every exporter/importer must adhere to the license's terms and restrictions.
- Keep authorities informed of any changes or modifications to the activity. All enterprises that want to trade agricultural products internationally must register with a regional licensing body, which will issue them an Import Export Code (IEC) number. Customs authorities will not allow items to be cleared unless the importer has an IEC number from the regional licensing authority. The authority that issues them an Import Export Code (IEC) number is the Director-General of Foreign Trade.
For the growth of agro-industries and to manage the schedule of products for exports by defining norms and specifications for export, the Indian government has established many organizations such as APEDA, Spices Board, and others. Exporters should register with an authorized export promotion agency and obtain a registration-cum-membership certificate to receive benefits and concessions under the export-import policy. In the process of doing business, an entity is necessary to obtain several registrations, some of which are detailed here. However, depending on the business transactions, a certain business may require additional registrations; please contact us for assistance. Under the Export (Quality Control and Inspection) Act of 1963, major agricultural goods must undergo quality control and pre-shipment inspections before being exported. Products with an ISI Certification Mark or an Agmark, on the other hand, do not need to be inspected by any agency. Before export, all commodities should be tagged, boxed, packed, and marked.
The Foreign Trade (Development and Regulation) Act 1992 governs imports into India. Except for products regulated by the policy or any other law in force, imports of all goods are free under this Act. This policy regulates things that are on a forbidden list and cannot be imported. Importing things from the 'Restricted' list requires an import license, whereas items from the canalized list can be imported through canalizing agencies. All other products are importable without restriction.
Because there was no established system for importing agricultural products, industries were concerned. We now have import procedures in place for the majority of agricultural, fishery, horticulture, and livestock products. Different departments/agencies are responsible for the growth of industries, the establishment of standards and specifications for planned export items, member registration, licensing, and so on.
Agricultural product licensing and registration in India. India has made significant development in agriculture and related sectors since independence. It also makes a substantial contribution to GDP. With the government of India's specific efforts, agriculture exports have expanded, making India one of the largest exporters of food grains on the international market. All exporters must register with the Director-General of Foreign Trade, who will assign them an Import Export Code (IEC). Exporters should register with an authorized export promotion agency and obtain a registration-cum-membership certificate to receive benefits and concessions under the export-import policy.
Types of Agricultural Licenses
- The Food Standards and Safety Authority of India (FSSAI)
- Agro mark
- Importer -Exporter Code (IEC)
The Food Standards and Safety Authority of India (FSSAI)
The Food Safety and Standard Authority of India (FSSAI) regulates food quality and safety, it requires that any food-related business or industry be registered with the FSSAI. The FSSAI certificate assists food-related firms in meeting all legal criteria. It comprises industries such as food preparation, food handling, delivery, packaging, retailing, and import and export. An FSSAI registration/FSSAI certificate is required for every food-related business.
Consumables include agricultural items. Under the Food Safety Act, trading, selling, and marketing agricultural products require a food license. As a result, an FSSAI certificate is required to conduct any agricultural-related activity.
An FSSAI certificate not only legalizes your business but also gives you and your company with the following advantages.
- Establish your agriculture products business as a reliable and trustworthy brand.
- FSSAI registration will make any legal process involving your company simple and efficient.
- Opening branches for your agricultural product business is simple and painless.
- You can use the FSSAI license logo to show clients that you care about quality.
- An FSSAI license might help you attract investors and streamline the loan application procedure.
FSSAI Basic Registration:
If your agricultural goods business has a turnover of less than Rs.12 lakhs, you are considered a small business. A basic food license is sufficient for small enterprises. For basic FSSAI registration, you must fill out Form A. You must update your food license from basic FSSAI registration to state FSSAI registration whenever your business turnover reaches Rs. 12 lakhs.
Central FSSAI Food License Registration:
If the value of your agricultural product business exceeds Rs. 20 crores, you should apply for a Central Food License. If your mid-cap company's revenue exceeds Rs. 20 crores, you must upgrade from a state to a central food license. Form B is required for this food license.
- The Agriculture Mark, or AGMARK, is a certification mark used in India to ensure the quality of agricultural products.
- AGMARK is a third-party assurance system for agricultural products produced and consumed in India.
- The system dates back to 1934, when Archibald MacDonald Livingstone, the Government of India's Agricultural and Marketing Advisory, proposed that this certification be implemented to aid local growers and prevent undue exploitation by produce dealers.
(The main objective is to provide consumers with quality, unadulterated products. The grading can be used for both domestic and export purposes.)
Features of AGMARK
- For agricultural products, this is granted by the Directorate of Marketing and Inspection, which is part of the Ministry of Agriculture and Farmers Welfare in India.
- It includes quality standards for over 200 distinct products, ranging from pulses to cereals, and essential oils to semi-processed foods like vermicelli.
- The headquarters are in Faridabad.
- Nagpur is home to the central AGMARK Laboratory, and 11 state-owned AGMARK labs may be found in 11 nodal cities.
- The Agricultural Produce (Grading and Marking) Act of 1937 makes it legally enforceable (amended in 1986).
- All application processes are completed online through the National Informatics Centre's platform (NIC).
- The Food Safety and Standards Act of 2006, the Codex Alimentarius Commission, and the International Organization for Standardization are used to create AGMARK standards.
- Except for edible vegetable oils and fat spread, which are required by FSSAI Regulations, 2006, AGMARK certification is optional.
Benefits of AGMARK
- Farmers benefit because the state provides extra subsidies to items with the mark.
- The product's marketing gets a lift.
- The product's quality is maintained through statutory compliance.
Importer - Exporter Code (IEC)
Importers need export-import codes when their items are passed by customs and when money is delivered outside. When money is sent to exporters' bank accounts and when cargo is sent in, it is critical. With the passage of time, the number of enterprises wishing to break down local market boundaries and enter global marketplaces is only growing. However, conducting international business is not for everyone. If you are a business owner who wants to expand your business into foreign waterways, you must follow certain rules and processes. Importing and exporting require additional licensing and registration.
An Import Export Code is required for any company that wants to start doing business in India (IEC). The Import Export Code is issued by the Director-General of Foreign Trade and is a 10-digit code that is valid for the life of the company. If an importer does not have an Import Export Code, they will not be able to import commodities, and exporters will not be able to claim export advantages from the Director-General of Foreign Trade until they have one.
Benefits of Import Export Code Registration
The following are the benefits of registering for the Import Export Code:
- Business expansion: Import Export Code registration can assist you in developing your business and reaching out to a broader market on a worldwide scale, allowing your company to flourish at a rapid pace.
- No return filing: If you register for Import Export Code, you will not be required to file any returns. You will not be needed to follow any form of process to ensure that the code's validity is maintained once it has been assigned to you. You will not be required to file returns with the Director-General of Foreign Trade, even for export transactions.
- No requirement for renewal: An Import Export Code is valid as long as the entity survives. As a result, those who own this code will never need to renew it.
- Simple processing: It's easy to get an Import Export Code from the Director-General of Foreign Trade. Once an application is submitted, it is normally processed within 10 to 15 days.
- Other benefits: Companies who register for the Import Export Code may be eligible for a variety of additional incentives from customs, the Export Promotion Council, and the Director-General of Foreign Trade.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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