Harvesting Success – Set Up an Agricultural Business in India
3E Accounting shows you how to be a farming powerhouse and set up an agricultural business in India.
Globally, India is the second-highest in agricultural and farming productivity. It is a sector that has guaranteed returns and demand is always high. This sector is so vital to the economy that the government has gone all out to support and modernize the industry. If you’re ready to work hard and reap in the benefits, set up an agricultural business in India.
Almost 75% of India’s population lives in rural areas, and their primary source of livelihood is dependent on agriculture. The agriculture business itself is many-tiered but can be generally categorized into three sectors:
- Productive Resources
- Agricultural Commodities
- Facilitative Services
Under these categories, the agribusiness can include:
- Basic farming, livestock & fisheries
- Crop production and export
- Feed, fodder, compost & bio-fertilizers
- Breeding of livestock
- Seed supply & flower production
- Processed food
- Farming equipment & technology
- Storage, logistics and supply chain management
To start, do market research on what type of product or service that is most suitable for your business aims. Consider location, competitors, staffing as well as market potential. Managing an agribusiness is a complicated venture that requires intense planning, multi-tasking and organizational skills. Ordinary things, such as the weather, can have a significant impact on output and productivity.
Create a business plan that clearly sets out your business objectives as well as resources. Scope out the extent of your business, including whether you want to go local, regional or international. These considerations will have an impact on the legalities of your business as well as financing.
When you are ready to begin, the first step is company formation. The Ministry of Corporate Affairs or MCA handles company registration and issues the Certificate of Incorporation. Company legal structures include:
- Private Limited Company
- Limited Liability Partnership
- Partnership Firm
- One Person Company
You must obtain your Digital Signature Certificate (DSC), Director Identification Number (DIN) as well as tax registration such as VAT, service tax, etc. Your business may also need an importer-exporter Code (IEC) from the Directorate General of Foreign Trade (DGFT).
Licenses and permits are mandatory in the food business category. The term ‘Food Business’ is a catchall phrase that covers all activities of the agribusiness from farming to catering. It is regulated by the Food Safety and Standard Authority of India (FSSAI) but is location-specific. Hence, both state and Central Government regulations also apply.
What permits you to need will depend on the nature of your agribusiness and include:
- FSSAI State or Central License
- Seed License
- Insecticide License
- Dairy License
- Meat Processing License
Those in the agribusiness are also encouraged to register with the Agriculture and Processed Food Products Export Development Authority (APEDA). This facilitates benefits and concessions for your business. Other associations include the Indian Society of Agribusiness Professionals (ISAP), Spices Board India (SBI), etc.
Growing a Successful Future
The agribusiness in India is perhaps one of the most reliable industry sectors for returns and profits. However, there may be many hurdles along the way from incorporation to licensing. Engaging professional companies such as 3E Accounting can mitigate errors and delays in processing.
Only when these essential steps are done, should you move on to leasing or buying your land, office space, equipment, livestock, etc. 3E Accounting offers a range of business solutions that will make it easier for you to set up an agricultural business in India.
Contact 3E Accounting today to speak to talented professionals who can help you start the business of your dreams.