Import-Export Insights: India’s exports in spices in the 2023-24 fiscal year exceeded 1.25 trillion rupees. The country exports spices such as chillies, turmeric, cumin, cardamom, and black pepper as well as other products.
In addition, raw spices that are not sufficiently processed are frequently exported. Such exports are commonplace in the industry, affecting the potential value of the products exported.
There is potential to earn more from added-value spice products such as oleoresins, spice extracts, essential oils, spice oil blends, encapsulated flavors, and gourmet spice blends and kits.. They more than encroach on the volume of imports, and are in high demand globally.
Currently, several new companies and other potential international niche market players are realizing the potential of more than raw spices leading to value-adding growth opportunity.
Read More: High-Margin Spice Derivatives: The Future of Indian Exports
1. Identifying Net Importing Countries of Spice Products-Import-Export Insights
India exported more than 15 million metric tonnes of spices in the FY 2023-24. The major spices contributing to this volume are and of major export value are chillies, turmeric, cumin, cardamom, black pepper and celery.
Value-added products, such as spice oleoresins, essential oils used in aromatherapy and other wellness products and blends of spices are grossly under- exported, despite the increased revenues to be gained.
2. Why Value-Added Spice Products Are the Next Big Opportunity
One can expect profit margins of 25-40% with value-added spice products as compared to 5-10% with whole spices. There is growing demand worldwide for clean label foods with natural ingredients marked as functional foods, which is heightening the price of specialty blends and extracts.
India imports some high-purity encapsulated spice oils, oleoresins, and specialty blends, putting the opportunity to produce these locally within reach.
Support from government bodies like MoFPI, MSME, and APEDA further provides processing units with the opportunity for more profit through subsidies, assistance with technology, and export aid.
3. Niche Value-Added Products: High-Potential Categories-Import-Export Insights
3.1 Oleoresins from Chilli and Turmeric
Complete flavor, aroma, and color hing in oleoresins is integral to the food, beverage, and nutraceutical industries.
Chilli and turmeric oleoresins are available for imports in India. Startups can offset raw material costs by establishing APEDA-supported extraction units in proximity to spice-producing states.
3.2 Essential Oils from Cardamom, Clove, and Celery
Widely used in food flavoring, these oils are also common in perfumes and for use in pharmaceuticals. MSME schemes can help small to medium distillation units enter the market, which is strong for import substitution with specialty blended oils.
3.3 Encapsulated Spice Flavors-Import-Export Insights
By encapsulating spice extracts in powder form, they gain a longer shelf life, higher stability, and more durability. Spray-dried powders (encapsulated extracts) are popular in instant foods, snacks, and beverages(Import-Export Insights).
Advanced technology processes are adopted by start-ups with support from MoFPI, enabling them to gain a competitive advantage in the market.
Read More: Turmeric Powder, Coriander Powder and Chilli Powder Processing Industry
3.4 Fortified and Specialty Spice Blends
Customers are more likely to purchase fortified spice blends, such as Vitamin D fortified turmeric, or blends that are lower in sodium. Automated production lines enable MSME-retail grant received start-ups to quickly manufacture customized spice blends.
3.5 Gourmet and Organic Spice Kits
Premium, organic, exotic, and gourmet spice kits, that are ready to use, are in high demand from international customers(Import-Export Insights).
Start-ups can easily source from certified organic farmers and food producer organizations, to ensure traceability, and to enter international markets. Locally, many gourmet spice blends that are imported can be produced at higher profit margins.
4. NPCS – Helping You Move Up the Value Chain
NPCS provides NIIR Project Consultancy Services to assist the entrepreneur in setting up a spice processing unit with detailed Techno-Economic Feasibility Reports (DPRs).
(Import-Export Insights) Reports contain findings on the processes of production, and the market, detailed production flow diagrams, materials needed, equipment required, and all necessary finances.
NPCS guides these start-ups with identifying the most suitable product category, applying for available government incentives, and assessing the potential profit margin of the business.
Read More: Profitable Spice Export Business Opportunities for Startups
5. Success Stories and Operating Models in MSME-Import-Export Insights
All over India, new businesses are taking advantage of this opportunity. From small operations, processors of oleoresin in Kerala expanded to global players. Blending plants in Gujarat are now suppliers to large fast-food chains. Organic spice processors in Rajasthan shifted to fortified and organic blends to gain access to the European market.
A new entrepreneur can model starting from contract manufacturing, using government grants to scale, coordinating with FPOs for guaranteed supplies, and then moving to own branded exports.
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6. Import-Export for Strategic Growth-Import-Export Insights
Leading exports are chili, cumin, turmeric, celery and cardamom. Oleoresin, extracts and fortified blends are among the fast-growing segment. India imports specialized encapsulated flavors and extracts, offering the opportunity for new domestic processors.
Startups in this segment face high demand in the North America, Europe, the Middle East and East Asia, where demand for natural ingredients is high.
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7. Proposed Action for Startups
The first step for the entrepreneur is to conduct a feasibility study, apply for the grants, obtain relevant licenses such as FSSAI and HACCP, and establish supply chains with FPO(Import-Export Insights). Securing international buyers requires participation in international trade fairs or B2B platforms.
8. Future Industry Trends
These include functional spice blends such as probiotic turmeric and eco-friendly green extraction systems with digital traceability through QR codes. Global D2C spice brands are also on the rise. All these favour technologically innovative start ups.
Find the Best Idea for Yourself With our Startup Selector Tool
9. Conclusion-Import-Export Insights
The spice surplus gives India with most of the spices an unusual edge not just agriculturally but in developing niche high value products for a global market.
Export ready brands can be built on blends, oils, extracts and fortified spices. India is strongest in a spice range and with the increased global demand coupled with NPCS support, government incentives, sustainable business steps can be taken.
FAQs-Import-Export Insights
1. What are value-added spice products?
A. Value-added spice products are processed products that offer high margins compared to the spice in its original, raw form. Examples include oleoresins, extracts, blended spices and essential oils.
2. Why should start ups focus on spice extraction or blending?
A.These segments provide the most value, are in high demand and there is lesser competition for high profits compared to whole spices.
3. Which government schemes support spice processing?
A. The MoFPI, APEDA, and MSME schemes provide support in the form of subsidies for machinery, technological upgrades and export promotion.
4. What certifications are needed for export?
A. Certifications required are FSSAI, HACCP, Organic, IndGAP, ISO, and there are country specific certifications that may be required based on the product.
5.How will NPCS assist a spice startup?
A.NPCS can assist in writing feasibility studies, preparing financial models, and advising startups in establishing processing units and applying for processing subsidies.
