written by | March 21, 2022

How to Start Spice Export Business in India?

India has been dubbed as the world's largest exporter of spices and has a history spanning thousands of years in its trade. The spices export business is one of the most thriving markets in the country. However, getting started in it requires careful thought and planning. Cultivating spices doesn't require much land, and India has perfect weather conditions, making it ideal for growing all kinds of spices.

Let's talk about how to start a spice export business in India, the documents required, challenges you might face, tips and tricks, etc.

Did you know?

India is the world’s largest exporter of spices, with its exports accounting for almost half of the global spice trade.

Export of Spices from India - Benefits

If you're a business owner exporting spices from India, you'll be glad to know that you are eligible for various subsidies. Sellers can ship samples to prospective clients for lower fees.

India exports up to 947,000 tonnes of spices every year and ships more than 75 different kinds of spices. The market is huge and internationally recognised, which means it's a viable business model. Total spice exports generated revenues of up to $4 billion during 2020-21 and the Spices Board is seeking to increase shares and product exports for spices exporters in India. 

Indian spices are touted for their medicinal benefits. In Ayurveda, they are used for treating illnesses such as obesity, metabolic disorders, nutritional deficiencies, gastric problems, ulcers, and various other chronic diseases. Spices are known for their antioxidant properties and are used by households in kitchen spaces. Clients who buy or import spices purchase them primarily for culinary purposes but some use spices for making their herbal remedie s and tinctures. There is a demand worldwide, which means starting a spice business is profitable long-term.

Different Types of Indian Spices Export Businesses 

There are different ways to start a spice business in India, and they are as follows:

  • Spice Manufacturer
  • Spices Merchant
  • Spice Wholesaler 
  • Spices Importer Exporter
  • Spices Third Party Manufacturer 

A spice manufacturer deals with growing spices and ensuring a good yield every year. They are concerned with the production and manufacturing of spices. Most spice manufacturers produce in large volumes and sell to traders, retailers, merchants, and wholesalers - all of whom are involved with distribution and supply chain management processes.

Also Read: How to Find the Best Saffron in the India?

How to Start a Spices Export Business in India?

Documentation Requirements

The first step in starting a spices export business in India is making sure that you are an Indian citizen. You will need to register your business under an MCA and get an Import Export Code (IEE) issued by the Directorate General of Foreign Trade (DGFT). 

Acquiring the Spice Registration Certificate is an important step towards getting your business internationally recognised and approved for trading or selling. You have to apply for registration online for the CRES (Certificate of Registration As Exporter of Spices) certificate issued by the Indian Spices Board to obtain it. 

The following documents need to be submitted for completing the registration process:

  • PAN Card and IEC Certificate
  • Incorporation Certificate from Ministry of Corporate Affairs 
  • Confidential Bank Certificate
  • Bank statements
  • MSME Registration and Phytosanitary Certificate 
  • GST Tax Registration Documents
  • ₹5,000 Demand Draft drafted in favour of Indian Spices Board
  • Scanned passport-size photos attested by an authorised entity of the organisation

Suppose you are a business dealing with producing, manufacturing, and distributing ground spices. In that case, you will also need to obtain a BIS (Bureau of Indian Standards) certification from the ISI. The ISI mark is a widely recognised production quality certificate in India, and there are over 351 mandatory products that need it before being sold commercially.  An FSSAI Registration Certificate and an ISO Certification are required when starting a spices export business in India.

Raw Materials Required

Raw materials are essential for the manufacture of spices. Businesses will need ingredients like coriander, cumin, turmeric, mustard, fenugreek leaves, fennel seeds, poppy seeds, food colourings, pepper, and various packaging materials to get started.

Also Read: Create A Killer Spice Business

Equipment Needed

Every spice exporter requires the following machinery to get started with the production process:

  • Roster and sieves
  • Packaging machinery
  • Grinders and compressors
  • Hammermill
  • Spice mill
  • Heat sealing machine
  • Disintegrator
  • Weighing scale
  • Masala making machine and industrial grinding machinery 

Spices Export Business Data for India

Spices take up less space than other types of businesses in India, and many business owners are switching over to spice trading for this reason. The Indian Organic spices market was valued at USD 200 million in FY 2020 and is forecasted to grow at a strong CAGR of 11% in the next five years. Trends influencing spice exports are climate changes, increasing demand for ethnic and exotic delicacies, consumer demands, and other factors. Major players operating in this segment are big brands like Simply Organic, West India Spices Limited, PDS Organic Spices, etc. Consumers are switching to ready-to-use spices, which means the market size is set to grow further.

There is a rising demand for organic products, and turmeric experienced high sales volumes due to its antioxidant and medicinal benefits. Many spices are used as natural painkillers and pain-relievers in the medical industry, and they're used for treating various chronic health conditions. These are expected to dominate the market, and spices can be segmented in sales accordingly. Areas in India leading in spice exports and sales are Rajasthan and Gujarat. 

Conclusion

Indian spices are highly sought after throughout the world due to their medicinal properties, texture, taste, colour, and flavour. Generations have used spices for cultural, religious, and auspicious occasions. Over half of the worldwide spice trade comes from India, which means there is no better time to start a spices export business in the country than now. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: Where can I sell spices online?

Ans:

You can put up your spice products for sale on Amazon, Flipkart, Etsy, etc. You can also launch your website, optimise SEO, and market it through internet forums and social media to gain traction and new buyers online.  The world wide web has opened several possibilities for spice sellers, and there is no limit to the number of sales you can make through the e-commerce segment. It is also good to target prospective clients by starting a Youtube channel and showing behind-the-scenes how you run your business to establish further trust and reputation.

Q: How much capital do I need to start a spices business in India?

Ans:

You will need anywhere from ₹60,000 to ₹100,000 to start a spices business in India. About 300 square yards of cultivation area is also required, and the profits you can expect to yield from this can range from 50% to 80%.

Q: Which country is the biggest exporter of spices in the world?

Ans:

India is the biggest exporter of spices worldwide.

Q: Which countries import Indian spices the most worldwide?

Ans:

Countries such as Sri Lanka, Bangladesh, UAE, Malaysia, the UK, Hong Kong, and Thailand import spices from India every year.

Q: Can I start an online spices export business from India?

Ans:

Yes, as long as you get the appropriate licenses and registration certificates required for your business to export spices to other countries, you can open an online spices export business from India. Opening an online spices business is a lucrative venture since you get access to worldwide clients with just a few clicks.

Q: What are the biggest challenges faced by upcoming spice import-exporters?

Ans:

Since the huge global market, there is a spice import-exporters in India face cut-throat competition with other players. Due to budget constraints, small business owners have a hard time keeping up with production volumes and distribution since they don't have the latest manufacturing technologies in place.

Q: How long is my CRES valid?

Ans:

Your certification as an exporter of Indian spices is valid upto a period of 3 years from the date of registration.

Q: How much does it cost to get the CRES Certificate for exporting spices from India?

Ans:

A new CRES Certificate application starts at ₹5,000, but if you renew your existing CRES certificate, it will cost you ₹2,500 as long as you're applying in June. For any delays in renewal of certification, the Spices Board levies a fine of ₹250 per month until the date of registration expiry, 31st August.

Q: How do I apply for the CRES?

Ans:

You can visit the official website of Spices Board India at http://www.indianspices.com and submit an online application to get started. All applications must be filed under 'Exporter Registration Online' there.

Q: What certification is needed for spices exported from India?

Ans:

CRES (Certificate of Registration as Export of Spices) issued under Section 11 of the Spices Board Act is required for all Indian spices export.  An IEC, which stands for Importer Exporter Code, is also needed for anyone starting a spices export business in India.

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