Indian Spices have always been in great demand since the very beginning. Their aroma, spiciness, tanginess, and marvelous quality define the legacy of Indian Spices worldwide. Out of 109 different varieties of spices listed under the International Organisation, India solely produces 75 out of them. As per the data of the state-run Spices Board, India exported 11,83,000 tonnes of spices and spice products in FY20 worth Rs 21,515.4 crore. In dollar terms, the export value stands at $3,033.44 million.
So, what does that conclude?
It concludes that spices have always been in great demand both nationally and internationally. Business related to spices in India could lead you to a way ahead in the business industry. However, nothing comes easy, and beginning a business is no exception. Starting any new business requires a lot of planning, efforts, implementation, licenses, and many more which comes in during the process. But knowing all about the business (which include government schemes, market demand, initial steps for entering a business, all the licenses and registrations, and others) can significantly decrease the time and effort required in it.
Here we are talking about Spice Export Business in India. So we are going to explain all aspects of it.
Why Spice Export Business in India?
It is pretty straightforward and the first question that strikes the mind of the most, when planning to start any business. And so far this is a must-raised question also. India is the largest spice exporter, consumer, and producer of Spices in the world. Out of 75 of the 109 kinds listed by the International Organization for Standardization (ISO), India contributes more than half of the trade of Spice at the global level.
The Spice Board of India is a government regulatory and export promotion agency for Indian Spices. The board promotes the export of Indian Spices in the global market and provides many government benefits for those who start their business in the export of spices in India. Some of those benefits are provided below:
- The Board proposes to assist in establishing primary processing facilities for spices in the NE (North Eastern) region. All registered exporters are eligible to avail the scheme.
- It proposes to reimburse the courier charges for sending the business samples abroad to develop the exports. It is proposed to provide 50% of the cost of courier charges subject to a maximum of Rs.1.00 lakh as grant in aid per annum.
- It proposes to assist all registered exporters to improve the existing packaging and develop modern packaging to increase shelf life, reduce storage and better presentation of Indian spices in the markets abroad.
- The scheme aims at scientific validation of nutritional / nutraceutical / cosmetic /medicinal and intrinsic properties of the spices and /or development of new products based on this validation.
- The scheme aims to assist exporters in penetration of Indian brands in identified overseas markets with a clear mark of traceability and food safety.
These are some of the schemes that are aimed at the expansion of Indian exports globally. There are many more promotional schemes for this that one can easily access through the government portal.
How to Start Spice Export Business in India?
Now, if you have set your mind and are willing to proceed with your decision of starting an export business in India, specifically spice export. Then, here are some of the things that need to be taken care of prior to the registration and licenses step.
Find a Business Name
Choosing a unique name for your business/brand is the very first step towards starting a business. This is the first basic step for starting any business. But also the difficult task. The selection of a name that is perfectly unique, suited to your business, and taken by none other usually takes a lot of time to find. There is one the most common problems that most startups face is finding a unique brand name. Every name they select belongs to someone else already.
{Tip: You can utilize Trademark Search Tool to know the status of your business name (already taken, applied for registration, or free to opt).}
Selection of the type of Business
While planning to start an export business, you must be aware of the types of businesses that deal with the export of spices. If we try to explain it in simpler language. There is a manufacturer who produces spices, then a merchant comes to play who trades the spices. Wholesalers are those who made spices available to retailers for packaging, distribution, and for sale. Third-party manufacturers are those who help in the production of spices. Supplier Exporter exports the spices to the foreign countries.
- Spices Manufacturer
- Spices Merchant
- Further, spices Wholesale Trader
- Spices 3rd-Party Manufacturer
- Spices Supplier Exporter
Selection of Location/Warehouse
Any new business must prioritize location above all else. And on-ground reality, it is the company’s prime priority. When launching a new business, there are a few crucial considerations to keep in mind. The following are some of the key choosing criterias:
- Well Connected to all transportation routes
- Availability of Good Transportation Services
- Accessibility to electricity, water, and other basic needs of a business.
Selection of Spices
This is however not any specific point that needs to be mentioned separately. As when you plan to enter into the spice export business, you already have some idea of the core product of your business. Some people specialize in a single spice, while others work with a variety of spices.
In case you have not yet decided the spice in which you will be dealing or should be dealing. Here are some suggestions on the most exported spices in India.
Chilli
India exported the largest amount of Chilli to Vietnam at the cost of Rs 95929 lakhs while India exported Rs 96101 lakh worth of chilli to Thailand. The growth in export is positive as it is more than the previous year’s export. Indulging in Chilli Export is one of the best export spices to deal with.
Mint Products
India is also a leading exporter of mint products to the world. India exported 22300 tons of mint in FY 2016-17 to many countries that had a total worth of Rs 252750 lakh. China, United States, Netherlands, Germany, and France are the leading importers of Indian mint. If not chilli then Mint can definitely be a good spice to export from India.
Licenses/Registration for Spice Export Business?
Now, you have all the prior planning for starting the spice export business. All you need after that is to obtain all the certifications for starting the spice export business. Here is an insight into all those licenses you will need for the spice export business in India.
Company/Firm Registration
In India, every business must register itself as a legal entity. Choosing the proper company structure is the most critical business-related decision. Doing so would allow your business to operate smoothly and meet legal requirements. There are numerous benefits of registering a company. There are different types of companies that you can register in India. To know more about them in detail, click on the particular type of business registration.
2. Limited Liability Partnership
Fssai central license
The Food Standard and Safety of India (FSSAI) is the legal authority that is responsible for the regulation of food security in India. All the FBOs must get a 14-digit FSSAI registration/license number according to their business activity and turnover and publish it on the food packages to overcome the adulteration in the food products. The FSSAI issues the Central License to all the large FBOs in India. It is the main requirement of the food businesses dealing in manufacturing, storage, distribution, transportation, or retailing of food products.
Import Export Code
Import Export Code is a ten-digit unique code assigned to an individual/company and is required for every import/export operation. The DGFT is in charge of issuing import-export codes. DGFT stands for Director General of Foreign Trade. Importer Exporter Code is the full form of IEC, although it is more commonly known as import-export code.
GST Registration
GST refers to Goods and Services Tax which subsumes all taxes such as Sales tax, Service tax, Excise duty, etc. into GST. GST registration is required primarily if your annual sales are more than Rs. 20 Lakh. Even if your sales are less than Rs. 20 Lakh, we suggest that you voluntarily opt for GST registration because:
- You will not get any tax refunds on purchases (e.g. if you buy goods worth Rs 1 lakh in a year, and tax rate is 28% – you will lose tax refund of Rs. 28,000).
- You cannot sell outside your state
Spice Board Registration
Manufacturers and merchants who deal with the export of Indian spices must register with the Spice Board (particularly 52 scheduled spices). On completion of registration, the manufacturer or merchant receives a Spice Board Registration Certificate known as CRES (Certificate of Registration as an Exporter of Spices).
ISO Certification
ISO stands for International organization for Standardization. It is a non-governmental organization that promotes global standardization for specifications and requirements for material, products, procedures, formats, information, and quality management. ISO is recognized globally, hence it creates a sense of trust among customers. It is mainly to focus on the quality of the products, therefore it satisfies the customers. They provide standard values for particular objects which the companies are bound to follow to protect themselves from violation.
Starting a new business and creating your separate identity in the market is a very challenging task in itself. We have tried creating a guide to help you in the process of setting up a new spice export business in India. In case you face a problem in obtaining licenses, then you can avail all the registration/licenses related services of Professional Utilities at one simple call. We will be more than happy to have your thoughts on this guide. Has it helped you or not?
