How To Start a Spice Export Business in India?– India is frequently referred to as the spice capital of the world. The history of the spice trade in India, which goes back thousands of years, demonstrates that spices were one of our initial exports. Even today, India is a major exporter of spices, and the trade in spices is a booming sector domestically.

However, exporting spices necessitates rigorous planning and the development of a business strategy, just like any other firm. In this post, we’ll go through how to start a spice export business in India and some important considerations for exporting spices.

How To Start a Spice Export Business in India?

Scope of Spice Export Business in India

Indian spices are highly prized for their superior flavour and quality across the world. We are also among the top consumers of spices in the world since Indian households require a broad variety of flavours and spices to thrive. Some small farmers have switched to cultivating spices since they require less space and produce more.

As a consequence, India is the world’s greatest producer, originator, and exporter of spices, accounting for over 75 of the 109 varieties available. India’s climate, which includes both tropical and subtropical weather patterns, makes it ideal for growing almost every spice. 

Five species are under the control of the Indian Spice Board, and nearly every Indian state cultivates at least one of them. Therefore, it is clear that India’s spice export industry has a lot of promise.

Different Types of Spice Export Businesses in India

The most common ways you can start a spice export business are as follows:

  1. Spices Manufacturer 
  2. Spices Merchant 
  3. Further, spices Wholesale Trader
  4. Spices 3rd-Party Manufacturer
  5. Spices Supplier Exporter

While manufacturers handle large-scale spice manufacturing, merchants and dealers complete the logistical chain by acting as intermediaries. As a result, spice growers are the main producers, while merchants ensure that their product reaches the correct markets. Wholesale traders are in charge of making sure that merchants who package, distribute, and sell spices throughout India have the goods they need. Suppliers assist in the manufacturing of spices in the nation, while third-party producers assist in the export of spices to other countries.

Spices Export Data in India

India exported more than 1,028,000 tonnes of spices during the 2017–2018 fiscal year, earning over INR 17,929.5 crores ($2781.46 million). India delivered 947,000 tonnes worth INR 17,660 crores, a significant rise of over 8% over export numbers from the previous year. By 2019, the value of India’s spice exports has surpassed 231 billion rupees. The top three countries importing Indian spices worldwide are:

  1. United States of America
  2. China
  3. Vietnam
  4. Hong Kong
  5. Bangladesh

Additionally, the seven spices that were the most in-demand during that period were as follows:

  1. Chilli
  2. Mint
  3. Cumin
  4. Turmeric
  5. Pepper
  6. Curry Powder
  7. Cardamom

Biggest Challenges Faced by the Spices Export Business in India

  • Health difficulties caused by extended exposure to the intense odours of spices have caused labour complications.
  • Within the spice market, there is a high credit risk among distributors and mediators, causing investors to be wary about investing.
  • Finding and attracting foreign consumers is tough since it is challenging to access high-quality packers and labellers. Small-scale firms struggle to expand due to a lack of access to high-tech machinery.
  • High competitiveness in a tough industry makes staying ahead of the competitors challenging.

Benefits of Starting a Spice Business in India

  • India, being the Land of Spices, has a high level of worldwide reputation, which leads to more prospects.
  • The spice sector has shown to be a long-term and financially successful solution, bringing in billions of dollars each year.
  • The Spices Board of India organises trade events and seeks to increase spice exports in India.
  • Exporters get a variety of incentives to assist them ship samples of their spices overseas at a lesser cost.
  • Small business owners may get money to make promotional movies, brochures, and other marketing materials.

Documents Required to Start a Spice Export Business in India

  1. Incorporation Certificate for the business from the Registrar of Companies
  2. Import Export Code from the Director-General of Foreign Trade
  3. Registration cum Membership Certificate from the Spice Board 
  4. Goods and Service Tax registration for tax purposes
  5. MSME registration
  6. Trademark registration to protect your brand in foreign markets
  7. Food Safety and Standard Authority of India registration or license
  8. Passport size photo 
  9. Phytosanitary Certificate 
  10. Authorized Dealer Code from a recognised bank
  11. Bank certificate and statement
  12. Company PAN card

You might also require BIS certification under the ISI, wherein the specification for ground spices are as follows;

  1. Chilli powder ISI number: 2445-1963
  2. Coriander powder ISI number: 2444-1963
  3. Curry powder ISI number: 1909-1961
  4. Turmeric powder ISI number: 2446-1963
  5. Sampling and testing of Spices ISI number: 1997-1961

To obtain a Certificate of Registration as an Exporter of Spices, or CRES, you will need the following:

  1. IEC certificate
  2. DD worth INR 5,000 in favour of the Spices Board
  3. Confidential Bank Certificate.
  4. GST tax registration certification
  5. PAN card

How to Start a Spice Export Business in India

  • First, business owners must decide what kind of organisation they want to start and which flavour they want to specialise in. You may work as a producer, wholesaler, supplier, retailer, or exporter, depending on your interests and financial resources. After that, you’ll need to perform market research to learn more about the spice industry and the spices you’re interested in. This will aid in the development of a long-term spice supply chain.
  • After that, you’d have to meet with wholesalers and dealers to purchase their spices in bulk. You’ll need to find an appropriate storage site and either rent or purchase it to accommodate this. If you also want to establish a retail company, you’ll need to invest in the necessary gear and equipment to get your manufacturing facility up and operating. The following is a list of equipment needed to establish a spice export company in India:

  1. Compressor
  2. Disintegrator
  3. Heat sealing machine
  4. Packaging machine
  5. Roster
  6. Spice grinders and sieves
  7. Weighing scale