How To Start A Spice Export Business In India?

Introduction

India has often been thought to be the spice bowl of the planet. The spice route, which originated in India thousands of years ago, is proof that spices were one of our earliest exports. Even now, India could be a major exporter of spices, and also the spice export business is one that thrives within the country. However, like with the other business, this one too requires thorough planning and therefore the development of a spice export business plan. during this article, we are going to be taking a glance at the way to start a spice export business in India, and what you wish to stay in mind about the export of spices.

  • Scope of Spice Export Business in India
  • Different Types of Spice Export Businesses in India
  • Spice Export Data in India
  • The Most Serious Issues Facing India’s Spice Export Industry
  • Benefits of Starting a Spice Business in India
  • Required Documents to Start a Spice Export Business in India
  • What is the Best Way to Start a Spice Export Business in India?

Scope of Spice Export Business in India

Indian Spices are asked for all around the world for their superior quality and flavor. We also are one of every of the world’s largest consumers of spices, with Indian households requiring an oversized type of flavors and spices to sustain themselves. Several small landowners have switched to cultivating spices as they take up less space and supply better returns. As a result, India is the world’s greatest producer, originator, and exporter of spices, accounting for more than 75 of the world’s 109 varieties. India’s climate, which includes both tropical and subtropical weather patterns, is ideal for growing almost every spice The Indian Spice Board has over five species under its domain, with most states in India growing one spice or the opposite. Hence, it’s quite clear that the spice export business includes a lot of scope in India.

Different Types of Spice Export Businesses in India

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

  • Spices Manufacturer 
  • Spices Merchant 
  • Further, spices Wholesale Trader
  • Spices 3rd-Party Manufacturer
  • Spices Supplier Exporter

While manufacturers pander to the assembly of spices on an outsized scale, merchants and traders act as middlemen completing the logistics chain. Hence, spice manufacturers function as the first producers, whereas merchants help in ensuring their product reaches the proper markets. Wholesale Traders are answerable for ensuring that retailers who package, distribute, and sell spices everywhere in India receive the produce required. Third-party manufacturers help with the assembly of spice within the country while suppliers help with exporting spices to foreign countries.

Spices Export Data in India

India exported over 1,028,000 tonnes of spices within the 2017-2018 twelve-month, bringing in over INR 17,929.5 crores, which amounts to over $2781.46 million. This was a big growth of over 8%, compared to export data from the previous year, wherein India exported 947,000 tonnes, generating INR 17,660 crores. In India, the value of spice exports had risen to nearly 231 billion rupees by 2019. the largest importers of Indian spices around the world are as follows:

  • United States of America
  • China
  • Vietnam
  • Hong Kong
  • Bangladesh

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

  • Chilli
  • Mint
  • Cumin
  • Turmeric
  • Pepper
  • Curry Powder
  • Cardamom

Biggest Challenges Faced by the Spices Export Business in India

  • Labour issues because of the health problems that arise because of prolonged exposure to the pungent odors of spices.
  • High credit risk of distributors and mediators within the spice industry, resulting in fear in investing.
  • Difficulty in obtaining access to high-quality packers and labellers which create problems to find and attracting foreign buyers.
  • Small-scale firms struggle to expand due to a lack of access to high-tech machines.
  • High competition during a cutthroat market, making it difficult to remain sooner than your competition

Benefits of Starting a Spice Business in India

  • India is that the Land of Spices, has high credibility within the international market, resulting in better opportunities.
  • Spice industry has proven to be a sustainable and economically viable option bringing in billions per annum.
  • The Spices Board of India organises trade events and strives to expand India’s spice exports.
  • Exporters receive a variety of subsidies to help them ship samples of their spices abroad at a lesser cost.
  • Subsidies are available to business owners for promotional videos, brochures, and other marketing activities

Required Documents to Start a Spice Export Business in India

  • The business received an incorporation certificate from the Registrar of Companies.
  • Director-General of Foreign Trade Import-Export Code
  • Registration cum Membership Certificate from the Spice Board 
  • Goods and repair Tax registration for tax purposes
  • MSME registration
  • Trademark registration to guard your brand in foreign markets
  • Registration or license from the Food Safety and Standard Authority of India
  • Passport size photo 
  • Phytosanitary Certificate 
  • Authorized Dealer Code from a recognized bank
  • Bank certificate and statement
  • Company PAN card

You can additionally need BIS certification under the ISI, which has the following requirements for ground spices:

  • Chili powder ISI number: 2445-1963
  • Coriander powder ISI number: 2444-1963
  • Curry powder ISI number: 1909-1961
  • Turmeric powder ISI number: 2446-1963
  • Sampling and testing of Spices ISI number: 1997-1961

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

  • IEC certificate
  • DD in the amount of INR 5,000 payable to the Spices Board
  • Confidential Bank Certificate.
  • GST tax registration certification
  • PAN card

What is the Best Way to Start a Spice Export Business in India?

  1. First and foremost, entrepreneurs will need to determine what type of business you want to start and in which spice you want to specialise. You could opt to become a producer, wholesaler, supplier, retailer, or exporter, depending on your interest and capital in hand.
  2. Next, you will have to conduct market research to understand more about the spice market and the spices on which you are focusing. This will help build a sustainable supply chain for the spice.
  3. You would then have to meet with suppliers and vendors and buy their spices in bulk. To accommodate this, you will need to locate a suitable storage location and either rent or buy it. If you wish to start a retail business as well, you would need to install the right machinery and equipment to get the production facility running.

The following is a list of equipment needed to establish a spice export business in India:

  1. Compressor
  2. Disintegrator
  3. Heat sealing machine
  4. Packaging machine
  5. Roster
  6. Spice grinders and sieves
  7. Weighing scale
  1. Next, entrepreneurs will have to meet with a legal expert to understand the legal compliances required to start such a business. The lawyer will provide further details on what licenses and certificates you will need to start operating in India.
  2. You will now have to start the documentation process so that you obtain the required licenses on time. Additionally, you will also have to register your business as a viable business structure at this stage. 
  3. You will then have to find suppliers in Europe, the US, and other countries where you wish to export to and establish a good working relationship with them. Once you have the buyers in place, you can start the paperwork required to start exporting the spices.
  4. Along the way, you will also need to find suitable investors and creditors to help finance your operations. You might need a spice export business plan ready before you approach investors to make sure you are well prepared.