Overview of the Spices Industry in India

India is the largest spice producer. It is also the largest exporter and consumer of spices. The climatic conditions, which feature tropical and subtropical weather patterns, make it perfect for cultivating practically all kinds of spices. Starting a spice trading business in India will be a wise choice because of the country's extensive spices farming and the demand for the product in the domestic and international markets. As the spice industry of India is famous internationally, spice businesses can opt for the export of the product too. Spice manufacturing involves processing spices by grinding, disintegrating, drying and packaging. Spicewholesale and retail trade in the country is in the open market, as well as branded and packaged forms. Today, blended spices are also in huge demand due to their ready-to-use nature and the balanced blend of different spices that can be difficult to reproduce for some. Pre-blended spice packets offer consistent food flavours and are convenient to use. Therefore processed spices also have great demand because of their ease of usability for consumers The forms of spice that are manufactured and traded include

Whole spices: chilli, cumin, cinnamon, cloves, mustard, turmeric, bay leaf, coriander, saffron etc.

Powdered Spices: Pepper powder, chilli powder, ginger powder, cardamom powder, turmeric powder, tamarind powder, coriander powder, fennel powder, fenugreek powder etc.

Recipe-specific spices: Curry masala, meat masala, fish curry masala, sambar, rasam, instant pickles etc.

Advantages of Spice Trading Business

Indian spices market command high credibility in the international market. The spice industry is an economically viable option for entrepreneurs with limited capital and resourceswho rake in massive profits immediately. Spice manufacturing and trading are common despite the competition in the Indian market. Manufacturing, processing and packaging plants for different spices have grown throughout the years due to the various advantages associated with this unique commodity. Indian dishes are incomplete without spices. We love our spices for their taste, aroma, colouring effect, and medicinal properties.

How to start Spice Manufacturing and Trading Business

Depending on the targeted market, the aspects of business setup can vary. One must decide on the sourcing of the spices and processing plant (including machinery, land, and labour) prior to making any heavy investment. Pre-production planning like competitive analysis, marketing plan, sales strategy, social media strategy, financial projections and the cost involved in setting up the entire setup will also be needed For Setting up the facility, the machineries required are

• Spice grinder
• Disintegrator
• Packaging machine
• Pouch sealing machine
• Pulveriser
• Weighing machine

Licences required to start the manufacturing and trading of Spices

GST registration

Documents required include

• PAN Card of the Business or Applicant
• Identity and Address Proof, along with Photographs
• Proof of business registration
• Proof of address, Bank details, etc
• Passport/driving license/ Aadhaar card/voter's identity card, etc.
• bank statement and scanned copy of a cancelled cheque

Trade license

Documents required include

• Applicant’s details like name, contact details, and address)
• Industry details
• Government ID proof like voter ID/PAN Card/Driving license/Aadhar Card/Rent Agreement/Partnership)
• Owned premises- Property tax receipt/Property registration details
• For Rented premises- Self-Attested Rent Agreement photocopy/photocopy of Property tax receipt

FSSAI Licence

Food Safety and Standards Authority of India issues FSSAI Licence in 3 categories, i.e. FSSAI Basic Registration, FSSAI State License and FSSAI Central License, depending on the size of the business. The details and documents needed for this licence include

• Location of the Company
• Nature of Company (Manufacturer, Importers, etc.)
• Blueprint/layout plan of the Processing Unit
• List of Directors/Proprietor/Executive/ Partners/ Members of Society or trust with address and contact details
• list of equipment and machinery, installed capacity and horsepower used
• Photo IDs and address proof of Proprietor/ Partner/ Director(s)/ Authorized Signatory
• List of categories of spices desired to be manufactured.
• Chemical & Bacteriological Analysis report of water to be used as an ingredient in food from a recognised/ public health laboratory to confirm the portability o Proof of possession of premises
• Partnership Deed/Affidavit of Proprietorship/ Memorandum & Articles of association towards the firm's constitution.
• Copy of certificate obtained under Coop Act 1981/ Multi-State Coop Act – 2002 in case of Cooperatives
• NOC & copy of the license from the manufacturer
• Food Safety Management System plan or certificate o Source of raw material
• NOCs from Municipality or local body

Registration and licensing required to Export Spice from India

The Spices Board falls under the Ministry of Commerce and Industry and acts as a link between Indian importers and exporters abroad. The main activities involve maintenance, promotion and monitoring of quality and better production methods and material support to farmers, infrastructure facilitation and research.

Certificate of Registration as Exporter of Spices (CRES): This registration is issued by the Spice Board and is treated as a Registration cum Membership Certificate (RCMC) under the FTP. The DGFT has recently launched a single window system for the issuance of CRES registration. The documents required in this regard are

Documents required by the exporter in the merchant category

• Import Export Code
• PAN Card
• GST Certificate
• Registration Fee
• Confidential bank Report showing the net value of the business
• Certificate of Incorporation/MOA, AOA / Partnership Deed
• List of Directors or partners along with contact info.

Documents required by the exporter in the manufacturer category

• Import Export Code
• PAN Card
• GST Certificate
• Confidential bank Report showing the net value of the business
• If the company authorises the applicant to apply, then an authorisation letter from te applicant is also needed
• Certificate of Incorporation/MOA, AOA / Partnership Deed
• List of Directors or partners and their contact info
• MSME registration
• FSSAI Licence
• Consent Certificate
• Lease deed/rent agreement in case the premise is on lease or rent
• registration fees.   

Additional Licence Required by the Spice Business

• IEC Registration
• BIS Registration
• Fire NOC
• Consent Certificate from State Pollution Control Board/ Pollution Control Committee

The magnitude of Spice Production in India

India produces 75 of the 109 spices that are listed by the International Organization for Standardization (ISO). The most produced and exported spices are cardamom, chilli, turmeric, coriander, cumin, celery, pepper, fennel, fenugreek, garlic, nutmeg and mace, ginger, curry powder, spice oils and oleoresins. Of these spices, chilli, cumin, turmeric, ginger, and coriander make up about 76% of the total production.

Domestic Production: In 2020-21, India produced 10.7 million tonnes of spices, of which chilli was the major spice crop. Around 29% of the area in the country is under cultivation is under chilli, contributing to 37% of the whole spices produced in India. Cumin contributes about 17% of the total production, while turmeric contributes about 10% of the total spice produced in India. Ginger contributes about 8% of the total spice produced in India. The statewise production of spices is as follows.

1. Madhya Pradesh (Around 3.23 million tonnes)
2. Rajasthan (Around 1.23 million tonnes)
3. Gujarat (Around 1.03 million tonnes)
4. Andhra Pradesh (Around 0.93 million tonnes)
5. Telangana (Around 0.74 million tonnes)

For Export: In 2020-21, India exported spices worth around USD $4.18 billion. For 2021-22, the exports were worth USD 4.1 billion. The main products imported included celery, cumin, curry powder, fennel, fenugreek, garlic, chilli, and mint products. The spices are exported to China, US, Vietnam, Thailand, Bangladesh, UAE, UK, Malaysia, Sri Lanka, Indonesia, and Germany.

How can Enterclimate assist you?