On cards, a code to unlock makhana's full potential

New Delhi: The ministries of commerce and agriculture are working on securing a globally accepted HSN (harmonized system of nomenclature) code for foxnuts to boost exports of the popular aquatic crop, two people aware of the matter told Mint.

Makhana, as it is called in India, has gained global recognition for its nutritional value, but is currently exported as a “dry fruit", making it difficult for authorities to accurately track exports.

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The first step to address this problem would be to secure the correct HSN code – the international system for classifying goods in trade. It is used to standardize the identification of products across countries, making taxation and documentation simpler.

This follows the government’s decision to set up a Makhana Board in Bihar, one of several schemes for the state announced in the budget for 2025-26. Bihar accounts for over 90% of India’s supply. To be sure, the high-protein, low-fat crop, which grows in lakes and ponds, does have a GI tag.

The makhana market in India has been witnessing steady growth, driven by a rising demand for healthy snacks. According to IMARC Group, a market research firm, the market size reached ₹7.8 billion in 2023 and is projected to expand to ₹18.9 billion by 2032, reflecting a compound annual growth rate (CAGR) of 9.7% during 2024-2032.

Code approval in final stage

“The process of HSN code approval is in the final stage, and we are hoping it will be allotted in the next few months, most probably by April," said one of the two people mentioned above.

The process of obtaining an HSN code involves a study by agencies like the Central Board of Indirect Taxes and Customs (CBIC) and consulting industry experts. The government then submits a proposal to the World Customs Organization's Harmonized System Committee (HSC) for international recognition. Once approved, the government will notify the new HSN code through circulars issued by the customs department, GST Council and DGFT.

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"As of now, the crop is exported under the category of dry fruits. Once a separate HSN code is assigned to Makhana, it will become easier to track its export growth and plan policy-level interventions to promote the trade of this GI-tagged product," said the second person.

According to Indian Council of Agricultural Research (ICAR), makhana is mainly cultivated in Bihar, Assam, West Bengal, Tripura, and Odisha.

In Bihar alone, nearly 500,00 families are engaged in its farming, harvesting, processing and sale, with about 10,000 tonnes of popped makhana being sold by the state each year.

Queries emailed to the ministries of finance, commerce and agriculture remained unanswered at press time.

Push for exports

The establishment of a Makhana Board, as proposed by the budget, will likely push things along to grow exports to ₹50,000 crore over the next 20 years, said Manish Anand, founder of Mithila Naturals, a Makhana manufacturing plant  in Arer, Madhubani district, Bihar.

“Although Bihar is a major producer of Makhana, its contribution to exports remains insignificant. States like Gujarat and Maharashtra are leading in Makhana exports, as policies in Bihar are less favourable compared with other states," said Anand.

To be sure, the HSN code, while helping authorities obtain more accurate trade data, will not significantly improve the ease of doing business, as the process is already seamless, he said.

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Hopeful of increased demand for fox nuts, which could put pressure on production, farmers are seeking government attention to push for technological upgrades in Makhana farming. “The government should now focus on developing high-yielding seeds and improving mechanization standards for popping to maintain the taste of the product till its existence," said Chinmayanand Singh, a Makhana farmer.

In the upcoming days, retaining skilled workers will be a major challenge for the sector, so the government must collaborate with technical institutions to expedite research work, suggested Singh, who practices Makhana farming on a 7-acre land in Purnea district, Bihar.