Indian spices exports on a high

Despite the volatile market conditions, there has been a steady growth in India’s export of spices. In 2017-18, the country exported 1 million tonnes of spices and spice products, a growth of 8 per cent year-on-year in volume terms

November 22, 2018

In 2017-18, India exported 1.03 million tonnes of spices and spice products, valued close to US$2.8 billion

In terms of volume, the total exports attained an all-time record, with a growth of 8 per cent year-on-year

The major markets for Indian spices are US, Vietnam, China, UAE, Iran, Thailand, UK, Saudi Arabia and Germany

As per APEDA, India exported organic products worth US$515 million in 2017-18, up from US$370 million in 2016-17

As the world’s largest producer, consumer and exporter of spices, India accounts for half of the commodities’ global trading. The country produces about 75 of the 109 varieties listed by the International Organization for Standardization (ISO), making it the hub of global spice trade. Since centuries, Indian spices have been much sought-after. Right from the Romans and Portuguese to the British and Chinese traders, the exquisite aroma, texture, taste and medicinal value of the assorted spices from India have always generated excitement and investment from across the globe.

Surging exports

In 2017-18, India exported 1.03 million tonnes of spices and spice products, valued close to US$2.8 billion. In terms of volume, the total exports attained an all-time record, with a growth of 8% year-on-year, according to data from the Spices Board, the apex industry body.

The highest revenues came from the export of chilli (4,43,900 tonnes), cumin (1,43,670 tonnes), mint (21,500 tonnes), small cardamom (5,680 tonnes), and garlic (46,980 tonnes). The other spices on India’s export list included pepper, ginger, turmeric, coriander, celery, fennel, fenugreek, mace, tamarind, clove, vanilla and nutmeg, among others. Processed, powdered and value-added spice products, such as spice oils and oleoresins, mint products, curry powder, spice powders, blends and seasonings, were also exported.  

Despite the volatile market conditions, there has been a steady growth in India’s export of spices. In 2016-17, the export was worth US$2.63 billion for a volume of 9,47,790 tonnes, while in 2015-16, the numbers were 8,43,255 tonnes valued at US$2.48 billion, the data further shows. The major markets for Indian spices are US, Vietnam, China, UAE, Iran, Thailand, UK, Saudi Arabia, Malaysia and Germany. The key producers include Karnataka, Kerala, Andhra Pradesh, Gujarat, Rajasthan, Tamil Nadu, and Uttar Pradesh.

Liberal policy initiatives

The Government of India (GoI) has implemented several reforms to unlock the country’s investment potential. From liberalising the FDI policies to simplifying the tax structure, GoI has taken significant measures to formalise the hitherto fragmented sector to attract global investors.

The food processing industry, in particular, is witnessing huge investment opportunities, as it is one of the focus sectors in the Make in India initiative. Thanks to the 100 per cent FDI (foreign direct permitted under the automatic route in food processing industries and 100 per cent FDI allowed through government approval route for trading (including through e-commerce in respect of food products manufactured or produced in India), there has been a significant boost to the inflow of investments.

Global players such as McCormick, the US-based spice and seasoning company, have entered the Indian spice industry, partnering with local players, to cater to the surging global demand. McCormick has taken full control over Kohinoor Speciality Foods.

Considering the increasing demand for organic spices in domestic and international markets, GoI is focussing on investment and entrepreneurship in organic farming

Government policies and measures to set up Spices Parks and raise food processing capacity, through public-private partnerships, has opened up further opportunities in the sector. Currently, there are eight Spices Parks in India – at Chhindwara (Madhya Pradesh), Puttady (Kerala), Jodhpur (Rajasthan), Guna (Madhya Pradesh), Guntur (Andhra Pradesh), Sivaganga (Tamil Nadu), Kota (Rajastan) and Raebareli (Uttar Pradesh).

Meanwhile, the Spices Board of India has been working towards the development and worldwide promotion of Indian spices. For instance, it is looking at geographical indication (GI) labels as one of the tools to promote Indian spices in the global market. Sannam chilles, Tellicherry pepper, Malabar pepper, Alleppey green cardamom and Coorg green cardamom are the early examples of this effort.

Focus on organic   

Considering the increasing demand for organic spices in domestic and international markets, GoI is focussing on investment and entrepreneurship in organic farming. According to the Agricultural and Processed Food Products Export Development Authority (APEDA), India exported organic products worth US$515 million in 2017-18, up from US$370 million in 2016-17. India’s favourable climatic conditions and bio-diversity help create an assorted export basket of organic spices, comprising pepper, vanilla, ginger, turmeric, cardamom, parsley, sage, mustard, etc. Besides traditional markets like the US, Europe and Canada, countries like Israel, Vietnam and Mexico are also fuelling the demand for such spices.

Currently, the Spices Board is focusing on developing and promoting organic cultivation of spices such as ginger, turmeric, large cardamom and hot chillies in Assam, Meghalaya, Nagaland and Tripura. The plan is to make the North-East the hub for organic spices. Incidentally, Sikkim is India’s first fully organic state. To promote organic farming through a cluster approach, the GoI has also launched the Paramparagat Krishi Vikas Yojana (PKVY) scheme under the National Mission of Sustainable Agriculture. Further, the Indian Ministry of Commerce and Industry has formulated the National Programme for Organic Production (NPOP) for certification of organic products. The NPOP is recognised by the European Union, US and Switzerland.

Future perfect

Food processing is one of the fastest growing industries in India and is expected to reach US$543 billion by 2020, according to estimates by the Ministry of Food Processing Industries (MoFPI). Within this, spices have a share of six per cent. India’s geographical location gives it a unique advantage when it comes to exports, having convenient connectivity to Europe, Middle East and Africa from the western coast, and Japan, Singapore, Thailand, Malaysia, Korea, Australia and New Zealand from the eastern coast.

As the global spices processing hub, India offers immense growth potential for investors.

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