According to the 61st annual report of CHEMEXCIL (a council established by the Ministry of Commerce & Industry of the Government of India), India is becoming a global powerhouse in the essential oils market. Exports are expected to reach USD 323 million in 2023-24. Essential oils are extracted from plants, and their use in food, cosmetics, and wellness products is increasing around the world. The essential oils market is a promising segment for entrepreneurs and startups looking to break into a lucrative market.
This article provides a detailed look at India’s essential oils market export business. It includes market demand, government assistance, export data and business tips.
Essential Oils Market Overview from India
Growing Market
India’s export of essential oils has been steadily increasing over the past three years.
| Year | Export Value (USD million) | Growth Rate |
| 2021-22 | 311 | -1.6% |
| 2022-23 | 306 | -1.5% |
| 2023-24 | 323 | +5.5% |
Source: CHEMEXCIL annual report 2023-24
The industry recovered in 2023-24 despite minor setbacks due to global disruptions. It showed a positive growth rate of 5.5%. This confirms the market’s resilience and global demand.
Related: Business Opportunities in the Production of Essential Oils
Key Export Destinations
India’s essential oil is primarily exported to countries that have a robust aromatherapy and wellness sector. Top destinations include:
- USA
- Germany
- Japan
- Indonesia
- UAE
These countries prefer natural oils of high quality, such as lemongrass and sandalwood.
Industry Segmentation & Applications
Essential oils can be obtained through solvent extraction or mechanical expression, and they are used for:
- Cosmetics: Shampoos, soaps, perfumes and lotions
- Massage oils for stress relief and aromatherapy
- Herbal medicine and ointments
- Flavoring agents for Food and Beverages
- Household products: air fresheners and disinfectants
Export facilitation and Government Support
CHEMEXCIL’s Role
The Basic Chemicals, Cosmetics & Dyes Export Promotion Council, under the Ministry of Commerce & Industry, is a vital support for essential oil exporters. Services include:
- Market intelligence reports
- International exhibitions and buyer-seller meetings
- Support for regulatory and compliance
- Reimbursement Schemes under MAI for Registrations Abroad
In 2023-24 CHEMEXCIL reported a rise of 19% in exports in the Cosmetics Soaps Toiletries & Oils panel. This reflects a significant increase in global demand.
Export Incentives & Trade Support
- RoDTEP Scheme: Refunds of embedded taxes
- Importation of Inputs Duty-Free with Prior Authorization
- Export Promotion Capital Goods: Import duties concessions on capital goods
India’s essential oil is now more competitive in the global market thanks to these policies.
Related: Sunflower and Canola Oil Processing Business: A Strategic Entry into India’s Edible Oil Sector
Forecasting and global market trends
Global essential oil market growth is expected to increase at a 7.5% CAGR from 2024-2028. This will be driven by the increasing consumer demand for sustainable and natural products.
India is well-positioned to meet the demand, thanks to its traditional knowledge and biodiversity. Due to the booming wellness industries in these countries, the USA, Europe and Southeast Asia are likely to remain strong markets.
India’s Essential Oil Export Forecast:
| Year | Estimated export value (USD million) |
| 2024-25 | 345 |
| 2025-26 | 372 |
| 2026-27 | 400+ |
How to start an essential oils export business
Research the market and select products
- Find oils in high demand (e.g. lavender, eucalyptus and lemongrass).
- Analyze the buyer preferences of target countries
Legal & Regulatory Compliance
- Get IEC (Import Export Code).
- Register with CHEMEXCIL
- Conform to FSSAI, BIS and international regulations, e.g. REACH, USDA organic
View our Books on Essential Oils Extraction and Processing, Aromatic Chemicals, Aromatic Compounds, Flavours, Fragrances and Perfumes
Establish Manufacturing or Sourcing
- Rent or buy a distillation plant
- Buy raw herbs only from reputable farmers
- GMP (Good Manufacturing Practices).
Packaging & Branding
- Invest in quality, eco-friendly packaging
- Organic/natural claims highlighted
- Test reports and lab certifications
For more information, check out this video
Export logistics
- Select the right freight forwarder
- Ensure you have insurance and follow all customs documentation
- Connect with buyers using CHEMEXCIL and trade platforms
| Challenge | Mitigation Strategies |
| Price Competition | Concentrate on organic certifications and premium oils |
| Regulations are complex | Consult export advisors or CHEMEXCIL |
| Supply chain fluctuations | Create reliable sourcing partners |
| Quality assurance | Quality control and laboratory testing should be conducted with strict standards |
Conclusion
India’s essential oil export business is more than a trend. It represents a great opportunity for entrepreneurs. It is possible to create a profitable business in this sector with a structured approach and the support of the government. India’s exports reached USD 323 million in 2023-24. This momentum signals a growing global appetite for plant-based oils of high quality from India.
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