How to Establish Cotton Bales Export Business From India?

In the textile industry, cotton performs the crucial role. Well, cotton is used to make soft, durable, and breathable textiles. In India, the cotton used ratio is 60:40. This means that for every 100 units, 60% contain cotton, and the rest is made up of other materials. In daily human life, cotton products serve an important role. But have you ever thought about where they are manufactured and how you are getting premium-quality materials? Returning to the subject, cotton bales are compressed bundles of processed cotton. On the other hand, the government of India has published several rules and regulations for the production of cotton bales. 

On the other hand, with the increasing demand for cotton around the world, India has become the primary nation for cotton production. With the increased demand, the cotton bales export business brought a big revolution. Imagine you’re motivated to kickstart your cotton export business from India, but are dealing with the necessary steps. It is common to mention that, to establish any type of business, the operators are required to obtain multiple licenses or certifications. The certification signifies that the exporter is aligning with regulatory compliance and also following the legal standards. In this comprehensive guide, we will explore how an individual or an organization can establish a cotton bales export business from India and the required documents and steps. Let’s understand every key feature of BIS standards in detail.

Everything about Cotton Bales in India

• The manufacturing and exportation of cotton bales significantly contribute to India’s economy, providing job opportunities for those seeking employment.
• According to the Cotton Association of India (CAI) report, India’s cotton exports are anticipated to reach 18 lakh bales in the fiscal year 2024-25. However, it is a little less than last season’s project.
• The easy access and the low cost are the result of increased demand around the world. 
• The leading states in cotton production in India are Gujarat, Maharashtra, and Telangana. These three states hold more than half of the cotton manufacturing for export. 
• As per the cotton export report, India is in the 5th position in exporting cotton. It is shaped by introducing the strict law for the BIS license export holders.

User Query: BIS Certification for Cotton Bales: What Every Manufacturer Should Know in India

How are the Cotton Bale Exporters Gaining Profit?

Every step in the business journey depends on each other. If one factor is increased, it automatically results in benefits. Similarly, primary exports are increasing due to growing global demand. In competitive markets, the cost of these materials tends to be low. Furthermore, the backing of a national government is essential to obtain these advantages. The factor that boosts cotton production:

1. High Demand and Competitive Pricing: The transparent global trade increases the demand for such material. While the low production cost is beneficial for exporters.
2. Government Support: The Indian government has published multiple schemes, laws, and national authorities to support exporters. Among them, the Bureau of Indian Standards is the regulatory body for cotton products. With cotton bales BIS certification, the exporters can trade globally without hurdles.
3. Cotton Mission: To enhance cotton production across India, the Union Budget 2025-26 outlines five major cotton operations. It directly improves the export activities.

Step-by-Step Guide for Cotton Bales Export Establishment

To kickstart your cotton bales export business from India, you are required to obtain the important documents from the relevant authority. Securing the license is not only a step to build a business, but identifying the needs of customers is also required. BIS for cotton bales ensures your products meet the stringent testing process before exportation. Here are the steps for the cotton export business:

1. Necessary Licenses and Registration

Import Export Code (IEC): In India, businesses are required to secure the compulsory 10-digit code if they are regulating import/export activities. For your export business, you can secure it from the Directorate General of Foreign Trade (DGFT). 

RCMC: To obtain the Registration Cum Membership Certificate (RCMC) for cotton bale exports, you need to register with the Cotton Textiles Export Promotion Council. 

GST Certificate Registration: As you are involved in export trade, you need to obtain the Goods and Services Tax (GST) registration certificate.

PEDA Registration: As you are establishing a business of cotton bales with value addition, you need to register with the Agricultural and Processed Food Products Export Development Authority (APEDA).

BIS Certification for Cotton Bales: Your export business must be registered with the Bureau of Indian Standards. The regulatory authority grants cotton bales a BIS license for your organization.

2. Market Research and Product Selection

Research for targeted Markets: Start the export establishment by searching high-demand markets. Proceed with online searching and look for which country has a higher interest in Indian cotton bales. Well, Bangladesh, China, Vietnam, Sri Lanka, and Indonesia are the top countries that are interested in Indian cotton bales.

Select the right cotton: Understand the customer’s needs, which helps to choose a specific type of cotton. Add the specific type of cotton for your export business. Also, analyze which grade of cotton has high demand in your selected market.

Understand quality standards: To increase the sales of cotton bales for export, you must ensure your products meet the safety and quality standards. You can register with BIS for cotton bales, who conduct the lab testing process for products. This is helpful to meet the safety and quality standards before presenting the products in the markets. 

3. Sourcing and Production

Procure Raw Materials: To build the trust of global customers, your selected raw material must meet the premium-quality standards. Furthermore, it should be collected from the BIS-registered supplier in India. 

Production and processing: Make sure your cotton export business adheres to legal compliance. Also, review whether the cotton bales are processed and packaged transparently, and also meet BIS standards and regulations. 

Quality Control: To maintain the consistent quality and standard of cotton, follow the BIS quality control orders. 

4. Export Procedures

Documentation: The importing nation’s and the customer’s authorities demand the necessary export documents. Prepare the needed paperwork like commercial invoices, packing lists, bills of lading, and phytosanitary certificates. 

Shipping and Logistics: To export the cotton bales from India to other countries, they are either shipped by air or sea. To manage the composition of cotton, keep track of records during transit. 

The Top 5 Leading Cotton-Exporting Countries

The table presented above indicates that the United States leads the world in cotton bale exports, and India is in 5th place.

User Query: How Manufacturers Can Secure BIS for Cotton Bales in India?

What Documents are Required for BIS Cotton Bales?

To export the business of cotton bales from India, the operators are required to prepare several important documents. The required paperwork is:

• • Import Export Code (IEC)
  • Registration Cum Membership Certificate (RCMC)
  • Shipping Bill certificate
  • Commercial Invoice certificate
  • The bill of lading
  • Certificate of Origin
  • Foreign Exchange Control Form (SDF)
  • Terminal Handling Receipt and Export License
  • BIS certification License cotton
  • Quality Control Certificates and a letter of credit, etc. 

Final Thoughts | Export Cotton Bales BIS Certification- IS 12171

In essence, to establish any business, either cotton export or manufacturing, the individual needs a lot of research. Additionally, comprehending the needs of the government and the requirements of customers is an integral aspect of the research. With premium and natural cotton raw material, an industry can establish a successful export business. To start your cotton business from India, navigate the business registration process with proper guidance and service. Are you still contemplating how to initiate a cotton bales export business? Get in touch with Legal Raasta experts who help inspire individuals to turn their dreams into reality. 

FAQ | Export BIS Registration for Cotton Bales

1. Do I need a license to export cotton from India?

Ans. Yes, a license is mandatory to operate the cotton export business from India. The Importer-Exporter Code (IEC) is the most frequently required certificate. BIS certification for cotton bales is also required.

2. Which authority oversees the regulation of cotton bale export activities in India?

Ans. Under the Ministry of Textiles, the Cotton Textiles Export Promotion Council (TEXPROCIL) is the primary authority that monitors cotton exports in India.

3. What is the HS Code designated for raw cotton?

Ans. The cotton bales BIS registration ensures that the products meet the specific quality standards under IS 12171: 2019.

4. What is the HS Code for raw cotton?

Ans. In India, the HS code for raw cotton bales is 5201. This code is further divided into sub-codes.

5. Is cotton tax-free?

Ans. The GST rate of all cotton except Gandhi Topi and Khadi Yarn is 5%.