Managerial Economics Project

Spice Industry in India

Introduction

India, known as the home of spices, boasts a 100+ year old history of trading with the ancient civilizations of Rome and
China. Today, Indian spices are the most sought-after globally, given their exquisite aroma, texture, taste and medicinal
value. Traditionally, spices in India have been grown in small land holdings, with organic farming gaining prominence in
recent times. With a market of ~14 Bn USD and average annual production of 9.41 Mn MT, India is the world's largest
producer, consumer and exporter of spices. India produces about 75 of the 109 varieties listed by the International
Organization for Standardization (ISO) and accounts for half of the global trading in spices. The most produced and
exported spices are pepper, cardamom, chilly, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, garlic, nutmeg
& mace, curry powder, spice oils and oleoresins. The largest spices-producing states in India are Madhya Pradesh,
Rajasthan, Gujarat, Andhra Pradesh, and Telangana. India is also the largest exporter of spice and spice items with China,
the US, Vietnam, and Thailand being the biggest destinations for India’s spice trade.

Key Highlights

● For the year 2020-21, the country exported spices worth US$ 4.18 billion, a 34% increase from the year 2019-20.
The five-year CAGR of India’s spice export was 12%
● In 2020-21, India exported 1.76 million tonnes of spices. This was a 46% increase from 2019-20 exports of 1.21
million tonnes
● Avendus Capital estimates India’s branded spice market to double in size to around Rs 50,000 crore by 2025

Why this industry?

● The increasing demand for innovative flavors, authentic cuisines, and ethnic tastes in foods and snacks is
augmenting the market for spices in India.
● A significant growth in the food processing industry along with hectic work schedules and sedentary lifestyles of
the consumers are also propelling the demand for convenient food options.
● The growing utilization of spices in processed and ready-to-eat food products is further driving the market growth
in the country.
● The expanding HoReCa sector in India is also bolstering the market growth of spices in India.
● The increasing penetration of western food trends is further catalyzing the demand for a variety of newer spices.
● The Indian government has introduced stringent regulations to curb the adulteration and maintain the quality of
spices, thereby inducing the production of safer product variants.

● The rising consumer concerns towards the negative health impact of synthetic additives in spices are augmenting
the demand for natural and organic spices in the country.