Indian Chickpea Exports: A Smart Investment Strategy

Chickpeas, also known as garbanzo beans, are a popular food legume with a diverse range of uses and a high nutritional value. India is the world's largest producer and exporter of chickpeas, with exports increasing annually. The country's share of global chickpea exports was 5.87% in 2021, and it is projected to grow to $19.19 billion by 2027. India exports chickpeas to over 130 countries, with the United States, United Arab Emirates, and Bangladesh being the top importers.

With a diverse range of varieties, a growing global demand, and India's dominant position in the market, investing in Indian chickpea exports could be a promising opportunity. However, it is important to carefully consider the rules, regulations, and licenses required for this business, as well as conduct thorough market research and analysis to ensure profitability and long-term success.

The profitability of Indian chickpea exports

Chickpeas, also known as garbanzo beans, are a popular food legume with a diverse range of uses and a dedicated consumer base worldwide. India is the world's largest producer and exporter of chickpeas, with exports increasing year on year. In this article, we will explore the profitability of Indian chickpea exports and outline key considerations for investors.

Global Demand and Market Growth

The global demand for chickpeas is strong and steadily increasing. The crop has a diverse range of uses, with specific consumer preferences in various markets. The global chickpea market is projected to grow from $14.9 billion in 2023 to $19.19 billion in 2027, representing a compound annual growth rate (CAGR) of 6.5%. This growth is driven by the rising popularity of plant-based proteins and the increasing use of chickpeas in processed foods.

Production and Export Trends in India

India is the top chickpea producer, with production reaching 11.9 million tons in 2021, a more than 50% increase since 2012. In 2021-22, India's chickpea production was estimated at 13.75 million tons, with the country contributing around 70% of the world's total production. The major chickpea-producing states in India include Maharashtra, Madhya Pradesh, Rajasthan, Gujarat, and Uttar Pradesh.

Indian chickpea exports include two main varieties: "Kabuli" and "Desi". The country exports premium-quality chickpeas of multiple varieties, with most exports going to the United States, United Arab Emirates, and Bangladesh. According to data from March 2023 to February 2024, India exported 3,314 shipments of chickpeas, marking a growth rate of 32% compared to the previous year.

Profitability Analysis

To determine the profitability of Indian chickpea exports, it is essential to compare the local market cost of chickpeas in India to their export price in international markets. While specific data on local market costs in India was not readily available, export prices for Indian chickpeas can be analysed.

Identifying Profitable Markets and Buyers

Identifying profitable markets and buyers is crucial for maximising profits in the Indian chickpea export business. According to recent data, the top three importers of Indian chickpeas are the United States, Bangladesh, and the United Kingdom, collectively accounting for 47% of India's total chickpea exports. The United States is the largest importer, receiving 40% of shipments, followed by Bangladesh with a 17% share, and the United Kingdom with an 8% share.

Competitive Advantage of Indian Chickpeas

Indian chickpeas have a competitive advantage due to their premium quality and the country's ability to produce and export a wide range of varieties. Additionally, India's large-scale production and established position as the world's top exporter contribute to its competitive advantage.

Challenges and Risks

While the Indian chickpea export business offers profitability prospects, it is important to consider potential challenges and risks. These include fluctuations in local market costs, changes in government regulations and policies, and competition from other exporting countries. Additionally, ensuring a smooth supply chain and maintaining product quality are crucial to meeting international demand and maintaining profitability.

In conclusion, the profitability of Indian chickpea exports is influenced by various factors, including global demand, production trends, export prices, and the ability to identify profitable markets and buyers. With the increasing global demand for chickpeas and India's dominant position as the top producer and exporter, the Indian chickpea export business offers lucrative opportunities for investors. However, it is important to carefully navigate the challenges and risks inherent in the international trade of agricultural commodities.

The global demand for Indian chickpeas

Chickpeas, also known as garbanzo beans, are a legume full of protein, fibre, complex carbohydrates, and are relatively low in calories. They are used in many Indian and Mediterranean dishes.

India is the world's largest producer of chickpeas and is exporting more and more each year. In 2021, India was the top chickpea producer, with production at 11.9 million tons, up by more than 50% since 2012. In 2021-22, India's chickpea production was 13.75 million tons, with a productivity of 12.6 q./ha. Chickpeas contribute nearly 50% of Indian pulse production. The major chickpea-producing states in India are Maharashtra, Madhya Pradesh, Rajasthan, Gujarat, and Uttar Pradesh.

Chickpeas are becoming increasingly popular as a source of plant protein, and with the rising popularity of veganism and vegetarianism, they are being used more and more as a meat substitute. The rising prevalence of celiac disease and gluten intolerance has also led to a high demand for gluten-free products, which chickpeas can provide. In addition, chickpeas are rich in fibre, folic acid, zinc, and protein, and offer many health benefits, including an ample supply of antioxidants, better blood regulation, and improved digestion.

Chickpeas are also used to make gluten-free, grain-free flour, which can be consumed by people allergic to cereal-based flour. They are also used in the production of textured protein and are a low-cost food additive. The increasing use of chickpeas in processed food manufacturing and the rising popularity of Indian, Mediterranean, and Middle Eastern cuisines will further boost the global demand for Indian chickpeas.

How to locate buyers for Indian chickpea products

India is one of the world's largest producers and exporters of chickpeas, with production reaching 13.75 million tons in 2021-22. The country exports a range of chickpea varieties, including Kabuli and Desi, and their derivatives, such as roasted grain, flour, snacks, and more.

• Utilize Online Platforms: There are several online B2B (business-to-business) marketplaces that connect suppliers and buyers globally. One example is EC21, a platform where buyers post their specific requirements for chickpeas, including desired varieties, quantities, and delivery locations. By signing up as a supplier on such platforms, you can directly reach out to buyers looking for Indian chickpea products.
• Industry Networks: Building a strong network within the industry can help identify potential buyers. Attend industry events, conferences, and trade fairs to connect with buyers, distributors, and importers. Networking can provide insights into market demands and help establish long-term business relationships.
• Export Directories: Explore export directories, such as the Indian Institute of Pulses Research, to find lists of Indian chickpea exporters. These directories often provide contact information and details about the exporters' product offerings. This can be a starting point for identifying potential buyers and reaching out to them directly.
• International Trade Data: Analyzing international trade data can help identify countries that import Indian chickpeas. For example, the United Arab Emirates, Iran, Bangladesh, and Pakistan are significant importers of Indian chickpeas. Focusing on these markets and reaching out to importers in these countries can be a strategic approach to finding buyers.
• Marketing and Advertising: Develop a strong marketing and advertising strategy to promote your Indian chickpea products. Utilize digital platforms, industry-specific publications, and social media to reach a global audience. Creating a website in multiple languages can also help attract international buyers.

By combining these strategies, you can effectively locate buyers for Indian chickpea products and establish successful export ventures.

How to discover new markets for Indian chickpea exports

India is one of the world's largest producers and exporters of chickpeas, with production peaking at 13.75 million tons in 2021-22. The country exports a diverse range of chickpea varieties, including Kabuli and Desi types, and their derivatives. As the global demand for chickpeas rises, Indian chickpea exports are also increasing.

• Market Research: Conduct comprehensive market research to identify potential new markets. Study the consumption patterns, preferences, and trends in different regions. For example, the Indian Desi chickpea is in high demand in certain countries due to its taste, while the Mexican Kabuli chickpea is sought after for its larger size, lighter color, and faster cooking time. Understanding these nuances can help target specific markets.
• Diversify Export Destinations: Currently, India's chickpea exports are concentrated in certain countries, with Bangladesh and Pakistan being the primary importers of Australian chickpeas, which are the largest exporters. India can explore opportunities in other regions, such as the Middle East, Europe, and other parts of Asia, to reduce reliance on a few key markets.
• Trade Agreements: Explore opportunities to enter into free-trade agreements or preferential trade arrangements with potential import markets. Such agreements can reduce tariffs and other trade barriers, making Indian chickpeas more competitive in new markets.
• Marketing and Promotion: Invest in marketing and promotional activities to raise awareness of Indian chickpeas in potential new markets. Highlight the benefits of Indian chickpeas, such as their nutritional value, diverse uses, and affordability. Participate in international food exhibitions and trade fairs to reach a wider audience.
• Supply Chain Efficiency: Ensure a stable and efficient supply chain to maintain a consistent flow of exports. Collaborate with exporters, importers, distributors, and retailers to streamline the transportation, storage, and delivery of Indian chickpeas to new markets.
• Product Differentiation: Focus on product differentiation to meet the specific needs and preferences of new markets. For example, some countries may prefer larger or lighter-colored chickpeas, while others may prioritize taste or cooking time. India can develop and promote specific chickpea varieties to cater to these diverse demands.

The rules, regulations, and licenses required to start an Indian chickpea export business

Starting an Indian chickpea export business requires careful planning and adherence to several rules and regulations. Here are the key rules, regulations, and licenses you need to keep in mind:

Company Registration:

Firstly, you need to establish a firm or company and register it under the Companies Act, 2013. This is a crucial step to ensure your business operates within the legal framework and can conduct exports.

Import Export Code (IEC):

Obtaining an Import Export Code (IEC) from the Directorate General of Foreign Trade (DGFT) is essential. The IEC is a unique identification number that authorizes your company to carry out import and export activities.

Foreign Trade Policy (FTP) Compliance:

As an exporter, you must comply with the Government of India's Foreign Trade Policy (FTP). This policy outlines the regulations, procedures, and incentives related to exporting goods from India. It covers areas such as customs procedures, taxation, and documentation.

Product-Specific Regulations:

Depending on the type of chickpea products you intend to export, there may be additional licenses or certificates required. This could include food safety certifications, quality standards, or specific export restrictions for certain varieties of chickpeas.

Market Research and Client Identification:

Understanding the global demand for chickpeas, identifying potential international clients, and establishing contacts with them is vital. Market research will help you determine the most profitable markets and buyers for your chickpea products.

Supplier or Manufacturer Sourcing:

Sourcing reliable manufacturers or suppliers of chickpeas is crucial. Ensure that your suppliers can provide high-quality products that meet the required standards and specifications for export.

Customs and Export Documentation:

Familiarize yourself with the customs procedures and export documentation required for your shipments. This includes invoices, packing lists, bills of lading, certificates of origin, and any other relevant documents specified by the importing country.

Logistics and Shipping:

Establish relationships with reputable freight forwarders or shipping companies to handle the transportation of your chickpea exports. Understand the incoterms (International Commercial Terms) that govern the responsibilities of buyers and sellers in international trade.

Payment and Trade Terms:

Negotiate and finalize payment terms with your international clients. Decide on the accepted methods of payment, letter of credit requirements, and any other financial considerations.

Compliance with Importing Country Regulations:

Ensure that your chickpea exports comply with the regulations and standards of the importing countries. This may include additional labeling, packaging, or quality requirements specified by the destination market.

It is always advisable to consult with professionals who have expertise in Indian export regulations and procedures. They can guide you through the specific requirements and licenses needed for your chickpea export business.

Frequently asked questions