Walk through any food manufacturing facility in Europe, the United States, or Japan and ask which imported ingredient appears most frequently on their label. The answer — after only a short investigation — will often be garlic. And an increasing share of that garlic originates in India. The garlic processing business in India has quietly become a significant export industry, yet it remains fragmented enough that a well-positioned MSME entrepreneur can carve out a substantial and profitable share.
India produced 3.6 million metric tonnes of garlic in 2023–24 (National Horticulture Board), making it the world's second-largest garlic producer behind China. Madhya Pradesh accounts for over 50% of national production, with Rajasthan and Gujarat contributing another 30% combined. The Mandsaur and Neemuch belt in MP is the garlic capital of India — a geographic concentration that gives processors located there a permanent raw material cost advantage over competitors based further away.
More than fresh production, it is the value-added processing opportunity that makes garlic a compelling manufacturing proposition. India exports garlic worth ₹1,940 crore annually — fresh, dehydrated, and processed — but the value addition in India is a fraction of what global garlic product markets represent. Garlic oil, black garlic, garlic extract, and pharmaceutical-grade allicin are examples of high-value garlic derivatives that Indian manufacturers are only beginning to produce at scale.
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At a Glance: Starting a Garlic Products Business in India
• India's garlic production: 3.6 million MT in 2023–24 (National Horticulture Board)
• India is the world's 2nd largest garlic producer after China
• Garlic and dehydrated garlic exports: ₹1,940 crore in 2023–24 (Spices Board of India)
• Key producing states: Madhya Pradesh, Rajasthan, Gujarat, Uttar Pradesh, Haryana
• Key product segments: dehydrated garlic flakes, garlic powder, garlic oil, black garlic, garlic paste
• Key licence: FSSAI Central Licence + Spices Board registration for export units
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Why Starting a Garlic Processing Business in India Makes Strong Business Sense
The single most compelling argument for entering garlic value addition manufacturing is India's raw material advantage. India grows garlic at a landed cost of ₹20–40 per kg at farm gate (seasonal variation), compared to garlic from China or other global sources that reaches Indian shores at USD 1–1.50/kg post-tariff. An Indian manufacturer processing domestic garlic into dehydrated flakes, powder, or oil has a structural cost advantage over import-based product formulations.
Dehydrated garlic products — flakes, granules, powder — are the workhorses of the global food ingredient industry. Every major food company that makes a sauce, seasoning, ready meal, or snack food uses dehydrated garlic as an ingredient. The shelf life (18–24 months), standardised pungency, and dosing precision make dehydrated garlic irreplaceable in industrial food production. India is already a significant supplier, but the opportunity to grow volume significantly remains — particularly as China faces increasing quality scrutiny in Western food safety audits.
Global food companies are diversifying away from single-country garlic sourcing after supply disruptions during COVID-19 and periodic concerns about Chinese garlic quality and pesticide residue levels. India is the natural beneficiary of this diversification — and Indian dehydrated garlic exporters who can demonstrate HACCP certification, FDA registration, and pesticide-clean sourcing are increasingly preferred by European and American buyers.
Black garlic — aged garlic with sweet, umami flavour and enhanced allicin bioavailability — is the fastest-growing premium product in the garlic category globally. It sells at USD 20–40/kg, compared to ₹80–150/kg for dehydrated garlic powder. A small-batch black garlic production unit (essentially a temperature and humidity-controlled aging chamber) can be operated at MSME scale and targets premium food retail, nutraceutical companies, and specialty food ingredient importers. It is the garlic equivalent of a specialty coffee roaster — artisan-scale, high-margin, and growing rapidly.
The pharmaceutical and nutraceutical angle adds a further dimension. Garlic oil and garlic extract manufacturing for the nutraceutical industry — which uses allicin-standardised garlic extract in cholesterol management supplements — is a high-value segment. India exports garlic extract worth ₹150+ crore annually, and domestic nutraceutical demand for garlic-based supplements is growing at 18–20% as health awareness expands.
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India's Garlic Export Growth
India's garlic and dehydrated garlic exports reached ₹1,940 crore in 2023–24, registering approximately 12% CAGR over the past five years. Dehydrated garlic flakes and powder account for 65% of export value. Key destinations include the United States, Bangladesh, Malaysia, UAE, and the United Kingdom. Source: Spices Board of India Annual Report 2023–24.
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Market Demand and Statistical Evidence for Garlic Products
India's garlic and processed garlic market has shown consistent growth across domestic and export dimensions, with dehydration and value-added processing as the primary growth engines.
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Year
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Garlic Production (MMT)
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Garlic & Products Export (₹ Crore)
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Dehydrated Garlic Exports (₹ Crore)
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Export Growth Note
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2019–20
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3.0
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1,380
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860
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Base year
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2020–21
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3.1
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1,480
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930
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Steady growth
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2021–22
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3.3
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1,680
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1,050
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Recovery surge
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2022–23
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3.5
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1,820
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1,140
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Record export push
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2023–24
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3.6
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1,940
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1,210
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Sustained growth
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2027 (Projected)
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4.2
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2,800
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1,800
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~12% CAGR assumed
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2030 (Projected)
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4.8
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3,800
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2,500
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~10% CAGR assumed
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2035 (Projected)
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5.5
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5,500
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3,500
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~9% CAGR assumed
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Sources: National Horticulture Board (NHB) Annual Horticulture Statistics 2023–24; Spices Board of India Annual Report 2023–24. Projections assume 12% export CAGR based on Spices Board targets.
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India's Garlic Production Dominance
Madhya Pradesh accounts for over 50% of India's total garlic production. The Mandsaur-Neemuch-Ratlam belt in western MP is India's garlic heartland, with a dedicated garlic mandi at Mandsaur that is one of Asia's largest garlic trading hubs. A processing unit located within 50 km of this cluster accesses garlic at the lowest cost point in India. Source: National Horticulture Board, 2023–24.
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Government Data: What Official Sources Tell Garlic Business Entrepreneurs
Government statistics reveal both the sector's growing commercial significance and the regulatory and support framework that favours new entrants.
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Department / Source
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Data Point
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Year
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National Horticulture Board (NHB)
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Garlic production: 3.6 MMT; cultivated area: 3.8 lakh hectares
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2023–24
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Spices Board of India, Ministry of Commerce
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Garlic and dehydrated garlic exports: ₹1,940 crore
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2023–24
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Spices Board of India
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India's share in global garlic product exports: approximately 8%
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2023–24
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Ministry of Food Processing Industries (MoFPI)
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PMKSY support for spice processing clusters including garlic
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2021–2026
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Ministry of Commerce / APEDA
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Market Development Assistance for garlic product exporters
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2024
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Ministry of MSME
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Garlic processing registered MSMEs (Udyam): 18,000+
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March 2024
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The 18,000+ MSME registrations in garlic processing suggest that this is a sector already understood by small entrepreneurs — but the export statistics reveal that the majority are processing for domestic markets and have not yet accessed the higher-value export channels. The gap between what India produces and what it exports as processed garlic (versus fresh) is the value-creation opportunity for a quality-focused manufacturer.
Government Schemes and Incentives for Garlic Processors and Exporters
Spices Board of India's Market Development Assistance (MDA) scheme reimburses 50% of export promotion expenses (capped at ₹20 lakh/year) for registered garlic product exporters. Spice Board registration is the essential first step for any garlic exporter targeting international buyers.
PMKSY's Agro-Processing Cluster and Primary Processing Centre components provide grant assistance of 35% of eligible project cost for spice processing units — directly applicable to dehydrated garlic, garlic paste, and garlic oil production facilities.
The CGTMSE scheme provides collateral-free loans up to ₹5 crore for MSME garlic processors. NABARD provides term credit at concessional rates for agro-processing linked to FPOs (Farmer Producer Organisations) — particularly relevant in Madhya Pradesh where garlic FPOs are active. State support is strongest in Madhya Pradesh (MP State Horticulture Mission), Rajasthan (RSAMB support), and Gujarat (APMC infrastructure).
For Black Garlic and specialty garlic products, MSME Technology Upgradation Fund (TUFF) and Startup India recognition (3-year tax holiday) are applicable. India's NHB also provides post-harvest technology support grants for horticulture processing units.
Import–Export Opportunity in Garlic Products
India exports garlic products primarily to the United States (largest buyer of dehydrated garlic), Bangladesh, Malaysia, UAE, and the United Kingdom. EU buyers are growing — particularly for organic-certified garlic products. India's garlic exports face competition primarily from China and Egypt. The key differentiator for Indian exporters is quality certification, pesticide residue compliance, and consistent supply chain — where India has strong advantages over China in Western buyer perception.
On the import side, India currently imports small volumes of specialty garlic products — black garlic, fermented garlic, and high-potency garlic extract — primarily from South Korea and China. An Indian entrepreneur establishing black garlic or allicin-extract production can directly substitute these imports for the domestic nutraceutical and premium food market. The premium pricing makes import substitution in specialty garlic segments significantly more profitable than competing in commodity dehydrated garlic alone.
Major Indian Companies in Garlic Processing
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Company
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Note
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Natureally Agro Industries
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Dehydrated garlic products; MP-based; large-scale exporter
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VKL Seasoning Pvt. Ltd
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Garlic paste, paste-based seasonings; food industry supplier
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Shalimar Chemical Works Ltd
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Garlic oil extraction; pharmaceutical and food grade
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Desai Foods Pvt. Ltd
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Garlic paste and processed garlic for retail and institutional buyers
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Shiv Agro Foods
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Dehydrated garlic flakes and powder; Gujarat-based exporter
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Pioneer Agri Tech
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Garlic extract and nutraceutical-grade allicin; MSME scale
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Rajkumar Agriland Spices Pvt. Ltd
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Whole and processed garlic export; MP-based
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The Growth Horizon: Garlic Products Market Outlook to 2035
India's garlic production will likely reach 5.5 MMT by 2035 as cultivation area expands and yield improves under NHB horticulture development programmes. Export value of garlic and garlic products could reach ₹5,500 crore by 2035 at a 9% CAGR — driven by growing demand for dehydrated garlic in North America and Europe, and expanding nutraceutical demand globally.
Black garlic is expected to be the fastest-growing product category — from a niche today to a mainstream food ingredient by 2030. Garlic extract and allicin standardised supplements will track the global nutraceutical market growth of 7–9% annually. India's share of global garlic product trade can realistically grow from 8% today to 15% by 2035 if quality and supply reliability improve — and that 7-percentage-point share represents approximately ₹3,500+ crore in additional export revenue.
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Consultant's Note: Quality Is the Export Gatekeeper
Dehydrated garlic faces rigorous pesticide residue testing by US and EU buyers. A single consignment rejection for pesticide non-compliance can end an export relationship permanently. Indian garlic processors must invest in clean sourcing protocols — traceable farm supply chains, residue testing at intake, and HACCP-certified processing. Organic-certified garlic from traceable farms in MP commands a 40–60% export price premium and faces far fewer rejections.
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Practitioner Q&A: Garlic Processing Business in India
Q1: Which garlic product has the best export potential for an MSME startup?
Dehydrated garlic flakes and garlic powder have the most established export demand and the most developed buyer networks. For higher margins, black garlic and allicin-standardised garlic extract command premium prices. A new MSME should start with dehydrated garlic (established buyers, simpler technology) and add premium products as quality systems and export relationships mature.
Q2: How much investment does a dehydrated garlic processing unit need?
A small dehydrated garlic unit processing 5 MT of fresh garlic per day (yielding approximately 1 MT of dried product) needs ₹50–80 lakh including peeling, slicing, and drying equipment (tray or belt dryer), plus FSSAI and Spices Board certification costs. A larger export-scale unit at 20 MT/day capacity requires ₹2–4 crore. PMKSY grant of 35% significantly reduces net outlay.
Q3: What is the process for registering with the Spices Board as a garlic exporter?
Register on the Spices Board of India's online portal (spicesboard.gov.in) with company registration documents, FSSAI licence, bank account details, and IEC (Import Export Code). Registration is free and typically processes within 7–10 working days. Spices Board registration unlocks MDA scheme benefits, export training, buyer-seller meets, and international fair participation support.
Q4: How do I get my garlic products FDA-registered for US export?
US-bound food manufacturers must register with the USFDA Food Facility Registry (online registration, renewed every 2 years). Additionally, FSMA (Food Safety Modernisation Act) compliance is required — including written food safety plans, hazard analysis, and preventive controls. Spices Board India provides guidance and training for FSMA compliance for garlic and spice exporters. Most US buyers also require HACCP certification from an accredited body.
Q5: What is black garlic and is it a viable product for an Indian MSME?
Black garlic is fresh garlic aged at 60–90°C and 70–90% humidity for 30–40 days, during which Maillard reaction transforms the bulbs into sweet, molasses-flavoured, darkened cloves with enhanced bioactive compounds. An aging chamber can be built with ₹5–15 lakh depending on capacity. Black garlic sells at ₹800–2,000 per kg in premium food retail — 10–20x the price of fresh garlic. The target market is specialty food retailers, health food stores, restaurants, and nutraceutical companies.
Q6: Is garlic oil extraction a viable standalone business?
Garlic oil has pharmaceutical, food, and cosmetic applications. Steam distillation yields approximately 0.06–0.1% oil from fresh garlic — meaning high volumes of raw material are needed for viable output. A small distillation unit at 200 kg fresh garlic/batch can yield 120–200 grams of garlic oil with a selling price of ₹10,000–25,000/kg in food grade and ₹30,000–50,000/kg in pharmaceutical grade. Viable as an add-on to a primary dehydration business rather than a standalone unit.
Q7: How does India compare to China as a garlic products supplier to global buyers?
India's competitive advantage over China is perceived quality and food safety compliance. Western food companies increasingly prefer Indian garlic to reduce China supply dependency. Chinese garlic has faced pesticide residue issues in European markets, giving Indian exporters who can demonstrate pesticide-clean, HACCP-certified product a meaningful quality premium. Price competitiveness is comparable for dehydrated products, with India slightly higher but within acceptable range for quality-conscious buyers.
Q8: What is the domestic Indian market opportunity for garlic products?
India's domestic food industry — packaged seasoning brands (Everest, MDH, Catch), ready meal companies, instant noodle manufacturers, sauce and condiment companies — collectively consume millions of tonnes of garlic-based ingredients annually. Garlic paste and garlic powder are high-demand ingredients in HoReCa (hotel, restaurant, catering) supply chains. The domestic garlic ingredient market is estimated at ₹2,500+ crore and growing at 12–15% with the packaged food sector.
Q9: What are the storage requirements for dehydrated garlic products?
Dehydrated garlic must be stored at below 25°C and below 60% relative humidity in sealed, moisture-proof packaging (typically laminated pouches or HDPE-lined bags). Improperly stored dehydrated garlic rehydrates, clumps, and loses pungency. Humidity-controlled warehousing is therefore mandatory. Most processors use nitrogen flushing in final packaging to extend shelf life to 24 months. Cold storage is preferred but not mandatory for compliant moisture-controlled packaging.
Q10: How can small garlic farmers benefit from a processing unit?
A processing unit located near a garlic producing cluster creates a direct backward linkage opportunity. Processors can partner with FPOs (Farmer Producer Organisations) in Mandsaur, Rajasthan's Barmer district, or Gujarat's Khed Brahma to source certified, traceable garlic at contracted prices. This reduces farmer price risk and ensures the processor gets quality-compliant raw material. NABARD provides specific FPO-linkage financing schemes for agro-processors who establish formal supply agreements with farmer groups.
The Bottom Line
India's position as the world's second-largest garlic producer, combined with growing global demand for dehydrated, value-added, and specialty garlic products, makes this one of the most straightforward agro-processing businesses available to an Indian MSME entrepreneur. The raw material is abundant, the export buyers are known and accessible, and the government support architecture — from Spices Board MDA to PMKSY processing grants — is well-established.
The strongest government support mechanisms are PMKSY grants (35% of project cost), Spices Board MDA scheme for export promotion, CGTMSE collateral-free credit, and NHB post-harvest technology support. State support from Madhya Pradesh Horticulture Mission is particularly strong for Mandsaur belt entrepreneurs.
The most important first step is to register with the Spices Board, obtain FSSAI Central Licence, and establish a raw material supply relationship with a garlic FPO or major mandi trader in Mandsaur or Rajasthan. Then target a US or EU buyer through Spices Board buyer-seller meets before investing in full scale production capacity. The quality proof is the customer proof — demonstrate your dehydrated garlic meets pesticide standards, and export orders follow.
References
1. National Horticulture Board (NHB), Ministry of Agriculture — Annual Horticulture Statistics 2023–24; garlic production area and yield data.
2. Spices Board of India, Ministry of Commerce — Annual Report 2023–24; garlic and dehydrated garlic export value, destination data, and MDA scheme guidelines.
3. Ministry of Food Processing Industries (MoFPI) — PMKSY scheme guidelines; agro-processing cluster and primary processing centre grant provisions, 2024.
4. Ministry of MSME, Government of India — Udyam Registration Portal garlic processing MSME data; CGTMSE scheme guidelines, March 2024.
5. National Bank for Agriculture and Rural Development (NABARD) — FPO linkage financing scheme; agro-processing term credit guidelines, 2024.
6. Agricultural and Processed Food Products Export Development Authority (APEDA), Government of India — Market development assistance and export promotion scheme for horticultural products, 2023–24.
