India is popularly known as the spice bowl of the world because of the spice route, which sprang up in India thousands of years ago. And this is considered as proof that spices were one of our products which were exported earlier. Even in the present-day market, India is one of the major exporters of spices, and the spice export business is one that flourishes within the country.
Some Indian spices including pepper, turmeric, mint, ginger, cumin, oregano, curry leaf, tamarind, chili, tejpat and so on that are still having great demand all over the world. Considering the figures, registering the spice export business is increasing and its annual growth rate is 9.4%. Starting a spice export business in India holds the same registering procedure as other import and export businesses that are registered in India.
Top Spices Exported from India
The spice export business also requires thorough planning, marketing strategy, and a business plan that helps to develop your spice export business. In this article, we will be discussing the complete details needed to start a spice export business in India.
Spice Export Business in India
The export value of spices from India amounted to over 231 billion rupees. When one can see so much potential in the spice business which ensures good returns with low investment, then any individual can start a business even a home-based spice-making business is turn out profitable
Indian Spices are in demand all around the world for their strong flavor and superior quality. Being the world’s largest consumers of spices, we, Indians require a large variety of flavors and spices to make our food delicious and nourish us. Several small landowners and farmers have preferred cultivating spices as these crops take up less space and yield better returns. Consequently, India is the world’s largest spice producer, and cultivator, which delivers over 75 of the world’s 109 different spices.
The climatic conditions of India which feature both tropical and subtropical weather patterns make the soil perfect to grow all types of spices. Under the domain of the Indian Spice Board, it has over five spices, with almost all states, growing one spice or the other. Therefore, it is quite clear that starting a spice export business in India has a lot of scope all around the world.
Different Types of Spice Export Businesses in India
Following are the most common ways to start a spice export business are:
- Spices Merchant
- Spices Manufacturer
- Spices Wholesale Trader
- Spices 3rd-Party Manufacturer
- Spices provider Exporter
The spice manufacturers work with the production of spices in large volumes and it is considered as Large Scale Business whereas the merchants and traders work as middlemen completing the supply chain of the spices. Therefore, spice manufacturers act as the primary producers of spices, whereas traders and merchants help in assuring the spices product reaches the right marketplace. Wholesale Traders are the people who are responsible for ensuring that the spices are properly reached to the retailers for packaging, distributing, and selling the product all over the required places. While Third-party manufacturers work with the production of spice and the suppliers work with exporting part of spices to foreign countries depending on the demand and market.
Top Challenges Facing India’s Spice Export Industry
- In the spice business, there is a high credit risk for distributors and middlemen, which has discouraged new investors.
- Additionally, the lack of superior packers and labelers in the Indian spice business has deterred foreign purchasers.
- Likewise, small companies have found it challenging to expand due to a lack of access to sophisticated equipment.
- It is challenging for new players to join the spice market due to fierce competition.
The following are the required formalities to start a spice export business:
Any individual, who is planning to start a spice export business, first has to register a business under MCA by any of the following options firm, Private Limited Company, proprietorship, and so on.
The next step is to obtain the IEC (Import Export Code), issued by DGFT (Directorate General of Foreign Trade). It is a 10-digit number and it is compulsory for every type of business that deals with the import and export of goods. It can be applied online.
Spice Registration Certificate: Obtaining the registration certificate is the third step to starting a spice export business. Yes! If you are planning to start an export business from India, then it is compulsory to obtain a valid certificate of registration as an exporter of spices(CRES). This valid certificate is issued by the Indian spices board. To obtain this you have to register first through CRES registration form online. To get a Certificate of Registration as an Exporter of Spices, or CRES, you have to submit the following documents:
- PAN card
- IEC certificate
- Confidential Bank Certificate
- DD worth INR 5,000 in favor of the Indian Spices Board
- GST tax registration certification
- Scanned passport-size photo of the CEO/authorized person of the organization with white background.
Phytosanitary Certificate is another mandatory certificate like CRES. This official document is used to test the shipments of plants or plant products, assuring that these plant products are free from pests and safe to use. This certificate is granted by the exporting country’s Department of agriculture, horticulture, food, or water resources.
Authorized Dealer (AD) Code:
An Authorized Dealer Code is a letter issued by the authorized bank, that displays the bank’s authorized dealer code of the business this code is a must when you start an operation or a business with a new port. Authorized Dealer Code is a 14-digit number and to obtain this code, first you need to open a current account in an authorized bank. Then, AD code registration is to be done with the customs department. To obtain the AD code, you should have the following documents:
- Pan card
- Voter ID card
- Bank certificate
- Bank statement
- IEC copy
- Sales Tax return
- Sales Tax copy
- Sales Tax + CST
- Balance sheet
- Registration charges for each port registration are INR 3000.00 plus service tax
- AD code letter
- Stamped blank letterhead
Documents Required to Start a Spice Export Business in India
To start a Spice Export Business in India, you must have the following documents
- Incorporation Certificate or IOC for the spice business from the Registrar of Companies
- Import Export Code issued by the Director-General of Foreign Trade
- Membership Certificate cum Registration from the Indian Spice Board
- MSME registration
- Goods and Service Tax registration for all kinds of tax purposes
- Trademark registration of your brand to protect your brand in overseas markets
- Food Safety and Standard Authority of India or FSSAI registration or license certificate
- Passport size photo
- Authorized Dealer Code from an authorized bank
- Phytosanitary Certificate
- Company PAN card
- Bank certificate and statement
- BIS certification under the ISI, in which the specification for ground spices are as given below:
- Turmeric powder ISI number: 2446-1963
- Chili powder ISI number: 2445-1963
- Curry powder ISI number: 1909-1961
- Coriander powder ISI number: 2444-1963
- Sampling and testing of Spices ISI number: 1997-1961
Benefits of Starting a Spice Export Business in India
- Indian spices hold a high reputation and are in high demand in the global market.
- A sustainable and economically viable way to generate enormous profits each year is through the spice business.
- Additionally, spice exporters get a variety of subsidies that let them send spice samples overseas for less money.
- Additionally, producers of promotional videos, brochures, and other marketing efforts are paid by spice exporters. Click Here for more information on: http://www.indianspices.com/
This is how one can establish a business in India exporting spices. Before beginning your business journey, make sure to contact a consulting firm like Kanakkupillai. The majority of start-ups are unfamiliar with the legal requirements and strict compliances encountered throughout the supply chain of the product, so this is significant.