Starting a spice business in India can be a lucrative proposition. The country is known for its diverse spices, and there is a growing demand for them both domestically and internationally.
The country is the world’s largest producer and exporter of spices, with a market worth more than Rs. 80,000 crores. India exports spices to over 185 countries across the world.
However, starting a spice business in India can be challenging, as the market is highly competitive and the regulations are complex.
This article provides an overview of the process of starting a spice business in India, from registering your company to obtaining licenses and permits to set up your production facility.
What Is A Spice Business, And Why You Should Start One?
Spices are an integral part of Indian cuisine and are used in almost all dishes. As such, there is a constant demand for fresh spices. Starting a spice business is, therefore, a viable option for entrepreneurs interested in starting their own business.
A spice business is an enterprise that manufactures, sources, or sells spices. These businesses can be brick-and-mortar stores, online retailers, or wholesale suppliers.
There are many reasons to start a spice business in India:
- The country is home to a large number of small farmers who grow a variety of spices, making it an ideal source of raw materials.
- Additionally, the Indian population is increasingly health-conscious and interested in trying new flavors, which has led to a growing demand for spices.
Scope Of Spice Business In India
The scope of the spice business in India is vast. As mentioned earlier, India is the largest producer and exporter of spices in the world.
In addition, the country has a large domestic market for powdered spices. The Indian spice industry is worth an estimated Rs 80000 (US$11 billion), and it is growing at a rate of 7-10% per year.
The Indian spice industry comprises both small-scale and large-scale businesses.
There are a large number of small-scale businesses that produce and distribute spices on a local level. These businesses typically have a turnover of less than Rs 5 crore (US$0.7 million).
On the other hand, there are also a number of large-scale businesses that operate on a national or even international level. These businesses typically have a turnover of more than Rs 500 crore (US$70 million).
The spice business can be broadly divided into two segments: the wholesale segment and the retail segment.
Whole sellers purchase spices from farmers or manufacturers and then sell them to retailers who, in turn, sell them to end consumers. The wholesale segment comprises businesses that sell spices to other businesses, such as hotels, restaurants, and caterers.
Retailers can either sell spices online or through brick-and-mortar stores. The retail segment comprises businesses that sell spices to individual consumers.
The investment required for starting a spice business in India depends on the type of business you want to start.
Do you want to start a wholesale business or a retail store? Are you looking to outsource your spices or manufacture them on your own? And how do you wish to scale your business?
The table below outlines the different types of spice businesses in India, their respective capital requirements, and other important details:
|Type Of Business||Capital Required (Avg)||Scope|
|Wholesale Spice Business||10 lakhs||High Return on Investment|
|Spice Retail Business||5 lakhs||Moderate Return on Investment|
|Spice Manufacturing Unit||5 lakhs – 1 crore||Highest Return on Investment(More you invest, more you earn)|
Why Is Spice Manufacturing The Best Bet?
A small home-based spice processing unit can be started with a capital investment of Rs. 5 lakhs. This type of business does not require a lot of space and is ideal for those who want to be their own boss.
A medium-sized spice processing unit can be started with a capital investment of Rs. 20 lakhs. This type of business requires more space and manpower as compared to a home-based unit.
A large-scale spice processing unit can be started with a capital investment of Rs. 1 crore. This type of business requires a large amount of space and resources. It is ideal for those who want to establish themselves in the spice industry.
Since a manufacturing unit provides you with more options to choose from and a wide scope for you to grow your business, we feel the spice manufacturing business is indeed your best bet. Besides, with time you can even start earning from exports.
Here are the steps to start your own spice manufacturing unit from scratch. However, if you wish to get your spices pre-manufactured, you can skip a few steps and follow the process.
10 Steps To Follow To Start Spice Manufacturing Business In India
Spices are an important part of Indian cuisine. They add flavor and aroma to the food and make it more delicious. There is a big demand for spices in the domestic and international markets.
If you are planning to start a spice company in India, then here are 10 steps that you need to follow in order to make it successful and profitable.
1. Do Your Research
The first step to starting any business is to do your research. This is especially important if you are starting a spice business in India because there is a lot of competition.
You need to find out what kind of spices are in demand and how much they are selling for. You also need to research the different methods of production and packaging.
Spice Production Methods
There are a few different production methods that you can use for your spice business in India. The most common methods are grinding, pressing, and extraction.
- Grinding is the most common method, and it is used to produce powdered spices such as black pepper, cumin, and coriander.
- Pressing is used to produce spices such as cardamom and ginger.
- Extraction is used to produce spices such as cloves and nutmeg.
There are also a few different packaging methods that you can use for your spices. The most common methods are vacuum packing, nitrogen packing, and airtight packing.
- Vacuum packing is the most common method, and it is used to preserve the flavor and aroma of the spices.
- Nitrogen packing is used to prevent the spices from oxidizing.
- Airtight packing is used to protect the spices from moisture and pests.
2. Develop a Business Plan
Once you have done your research, you need to develop a business plan. This should include your goals, target market, and marketing strategy. It is also important to calculate your start-up costs and projected income.
To calculate your start-up costs, you need to factor in the cost of equipment, licensing, permits, and the cost of hiring employees. You also need to factor in the cost of marketing and advertising your business.
The projected income for a spice business in India varies depending on the type of spices you produce.
Did you know? Most spices are sold at a profit margin of 100-300%.
3. Choose a Location
When choosing a location for your spice business, it is important to consider the cost of rent and utilities, the availability of raw materials, and the accessibility of your target market.
You also need to make sure that your business is located in an area that is zoned for commercial use.
The cost of land will depend on the location and size of the plot you choose. If you are planning to set up a small-scale business, then a plot of 500 square feet should suffice.
However, if you are planning to set up a large-scale operation, then you will need a larger plot of land. The cost of land in India can range from 50,000 to 5 lakh rupees per acre, depending on the location.
If you are planning to set up a physical shop, then make sure it is in a high foot traffic area.
If you are starting a home-based spice business, then choose a location that has adequate space for storing and processing spices.
There are a few things to consider when determining the best area for your spice grinding business.
- First, you’ll want to find a space that has a steady stream of customers. This could be a busy intersection, near a grocery store, or any other high-traffic area.
- You’ll also want to make sure the rent is affordable and that there is enough space to accommodate your equipment and inventory.
- Finally, you’ll want to choose a location that is convenient for both you and your customers.
4. Get the Necessary Licenses and Permits
Once you have arranged the finances for your business, the next step is to get the necessary licenses and registrations in place. These will vary depending on the state in which you are setting up your business.
In order to start a spice business in India, there are certain legal requirements that must be met.
Here are the necessary permits and the reason why you should get them:
1. Food business license:
A food business license is required in order to operate a spice business. This can be obtained from the municipal corporation or the food and drug administration in your state.
The AGMARK certification and food business license ensures that your business is following all the necessary food safety and hygiene regulations.
2. Shop and establishment license:
This is required if you are setting up a physical shop for your business. It can be obtained from the local Municipal Corporation.
3. GST registration:
Goods and Services Tax (GST) is a tax levied on the supply of goods and services in India. If your turnover is more than Rs 20 lakhs, then you must get GST registration done.
4. FSSAI registration:
The Food Safety and Standards Authority of India (FSSAI) is a statutory body that regulates food safety in India. All food businesses must obtain an FSSAI license or registration.
5. Business insurance:
It is always advisable to take out business insurance to protect your business from any unforeseen risks. Some of the common types of insurance policies for businesses are property insurance, liability insurance, product liability insurance, etc.
6. Trademark registration:
If you want to brand your spices with a logo or trademark, then you will need to register it with the Intellectual Property Office of India. This will protect your intellectual property rights and prevent others from using it without your permission.
7. IEC registration:
An Import Export Code (IEC) is required if you want to import or export spices. It can be obtained from the Directorate General of Foreign Trade. Remember that a trade license is essential too.
8. Quality certification:
9. Spice processing machine:
You will need to purchase a spice processing machine that meets Food Safety and Standards Authority of India (FSSAI) norms. It is advisable to buy from reliable manufacturers like Mill Power Pvt. Ltd.
10. Packaging materials:
The packaging materials used for spices must be food grade and should meet FSSAI standards.
Following these legal requirements will help you start your spice business on the right foot and avoid any legal complications later on.
Note – It is important to note that there are different licenses and permits required for each state in India.
5. Buy Equipment
The type of equipment you need for your spice business depends on the production method you are using.
- If you are using the grinding method, you need a grinder, sifter, and packaging machine.
- If you are using the pressing method, you need a press and a packaging machine.
- If you are using the extraction method, you need an extractor and a packaging machine.
- You also need to buy raw materials, packaging supplies, and labels.
Scrolling down is a detailed list of machinery to choose from as per your spice manufacturing process.
6. Hire Employees
If you are planning on starting a spice business in India, you need to hire employees. The most common positions are production workers, quality control inspectors, and salespeople.
It is important to note that you may need to provide training for your employees.
The basics of operating a spice machine include:
- understanding the types of spices and their usage,
- understanding the grinding process,
- and being able to operate the machine safely.
It is also important to be knowledgeable about the hygiene and safety standards that need to be followed in a spice grinding business.
7. Market Your Business
There are a few different marketing strategies you can use for your spice business in India. The most common strategies are online marketing, print advertising, and word-of-mouth marketing. You can also participate in trade shows and offer discounts and promotions.
- When it comes to online marketing, you need to create a website and social media accounts. You should also consider creating video content and blog posts.
- For print advertising, you can place ads in newspapers, magazines, and directories.
- Word-of-mouth marketing is free and it is the most effective way to market your business. You can do this by asking your satisfied customers to leave reviews and testimonials.
- Participating in trade shows is a great way to network with other spice businesses and attract new customers. You can also offer discounts and promotions to attract new customers and increase sales.
8. Sell Your Spices
There are a few different ways you can sell your spices in India. The most common way is to sell them online. You can also sell them offline through retail stores and distributors. You can also export your spices to other countries.
- When selling your spices online, you need to create a website and social media accounts. You should also consider creating video content and blog posts.
- For selling your spices offline, you need to find retail stores and distributors that are interested in carrying your products.
- If you want to export your spices, you need to obtain an export and trade license from the Directorate General of Foreign Trade (DGFT).
9. Expand Your Business
Once you have started selling your spices, you can expand your business by opening new production facilities or adding new product lines.
You can also franchise your business or start an online spice shop. Another way to expand your business is to participate in trade shows and offer discounts and promotions.
When expanding your business, it is important to choose the right strategy for your company. You should consider your budget, target market, and goals. It is also important to research the competition and make sure there is a demand for your products.
With the right strategy, you can successfully expand your spice business in India.
10. Evaluate and Adjust your Business Plan
After you have been in business for a while, it is important to take some time to evaluate your progress. You should look at your sales, profit margins, and customer satisfaction levels.
If you are not happy with your results, you may need to make some adjustments to your business plan. You may need to change your product line, target market, or marketing strategy.
You should also keep track of industry trends and make sure you are keeping up with the competition.
By regularly evaluating your business, you can make the necessary changes to ensure your spice business is successful.
By following these steps, you can start your own spice business in India and be successful in this highly competitive market. Do your research, plan carefully, and focus on marketing and promotion to build a successful business.
How To Choose The Right Equipment For Your Spice Business?
When you decide to start a spice business, the first question that comes to your mind is, what would be the right equipment for my spice business? Here is the best spice machinery available in India.
A spice processing business can be started at home on a small-scale basis. The overall process of spice grinding involves several operations like cleaning, grinding, mixing, pressing, and packaging.
Below is the list of some common machines used in the Spice Manufacturing Process-
1) Cleaning Machines-
The first step in starting a spice business is cleaning the spices. For this purpose, you will need destoner machines and sifters. These machines help in removing impurities.
Vibro Sifter Machines
A vibro sifter is a machine that separates solids from liquids or slurries by vibrating the liquid material at high frequencies. This causes the heavier solids to settle out while the lighter liquids are carried away.
Vibro sifters are usually used in spice grinding businesses to remove impurities like stones, sand, dust, and dirt from the spices.
There are different types of vibro sifters available in the market, depending on the size of the machine and the production capacity.
- The best type of vibro sifter from Mill Power Pvt. Ltd. comes in different diameters (24, 30, 36, 48, 60, and 72 inches) and has a stainless steel body.
- The capacity of this machine ranges from 0.5 HP to 5 HP and depends on the size of the sieve and the material density.
The stones present in the spices can damage the grinding machines, so it is important to remove them with a destoner machine.
The destoner machines are available in different capacities to suit the needs of small and large spice businesses. The machines also have varying production capacities to meet the needs of different businesses.
We at Mill Power Pvt. Ltd. offer 6 types of Destoners that vary based on Capacity: 1.5 HP to 3 HP and Production: 400 to 2000 kg/hr.
2) Processing Machines (Pulverizers/Expellers/Mixers)-
After cleaning, the next step is grinding the spices. For this purpose, you will need different types of pulverizing or grinding machines like a double-stage blower pulverizer or an impact pulverizer.
These machines are designed to quickly and efficiently grind spices to powder form, making it easy to get a perfect consistency.
The Blower Pulverizer is a versatile grinding machine that can be used for a wide range of applications. It can be used to pulverize spices, herbs, and other food items.
The Blower Pulverizer is also known as a Spice Grinder. The machine is easy to operate and comes with a user manual. The Mill Power Blower Pulverizer is also very affordable, making it an ideal choice for all business sizes.
Our range of Blower Pulverizers is available in different capacities to meet the diverse needs of our clients. These machines are known for their durability, efficiency, and easy maintenance.
Blower Pulverizers from Mill Power Pvt. Ltd. –
1. Small-Scale Business Owners – 25~60 kgs/hour:
- 2HP Blower Pulverizer
- 3 HP Blower Pulverizer
- 5 HP Blower Pulverizer
2. Medium-Sized Requirements – 85~120 kgs/hour:
- 7.5 HP Blower Pulverizer
- 10 HP Blower Pulverizer
3. Large-Scale Production – 220~330 kgs/hour:
- 15 HP Blower Pulverizer
- 20 HP Blower Pulverizer
- 25 HP Blower Pulverizer
An impact pulverizer is a type of grinding machine that is used to grind spices and other materials. The impact pulverizer works by using a series of hammers to crush the material.
This type of grinder is ideal for grinding spices because it produces a very fine grind. The impact pulverizer is also a very versatile grinder that can be used to grind other materials, such as coffee beans and rice.
If you are thinking about starting a spice business in India, then an impact pulverizer is an essential piece of equipment. With its ability to produce a uniform mesh, it will help you create spices that have maximum flavor and aroma.
Impact Pulverizers from Mill Power Pvt. Ltd. –
1. Small-Sized Requirements – 60~100 kgs/hour:
- 7.5 HP Impact Pulverizer
- 10 HP Impact Pulverizer
2. Large-Scale Production – 200~600 kgs/hour:
- 20 HP Impact Pulverizer
- 30 HP Impact Pulverizer
- 60 HP Impact Pulverizer
The oil expeller works by crushing the seed and then extracting the oil. Oil expellers are very popular in the spice industry because they allow for the extraction of high-quality oil.
If you are thinking about starting a spice business in India, then an oil expeller is an essential piece of equipment. With its ability to produce high-quality oil, it will help you create spices that have maximum flavor and aroma.
Oil Expellers from Mill Power Pvt. Ltd. –
1. Small-Sized Requirements – 3~7 kgs/hr:
OE400 Oil Expeller
OE600 Oil Expeller
2. Medium-Sized Requirements – 10~12 kgs/hr:
OE1200C Oil Expeller
3. Large-Scale Production – 20~30 kgs/hr:
OE2000C Oil Expeller
If you are looking to start a spice business in India, a hammer mill is a great option. Hammer mills are affordable and easy to operate, making them the perfect choice for small businesses. Hammer mills can grind grain and masalas, but they are not suitable for fine grinding.
When choosing a hammer mill, it is important to select one that is appropriate for the size of your business. Small businesses will need a smaller hammer mill, while larger businesses will need a larger one.
Hammer mills come in a variety of sizes and can be customized to meet your specific needs. The type of motor you choose will depend on your budget and the power requirements of your business.
Hammer Mills from Mill Power Pvt. Ltd.-
1. Small-Scale Business Owners – 18~20 kgs/hour: 2HP Hammer Mill
2. Medium-Sized Requirements ~30 kgs/hour: 3 HP Hammer Mill
3. Large-Scale Production ~50 kgs/hour: 5 HP Hammer Mill
Masala mixers are used to grind and blend spices. They are very popular in the spice industry because they allow for the creation of a variety of spice blends.
Ribbon blenders are an essential piece of equipment for any spice business. These blenders are used for spice mixes, creating a perfect blend.
With its ability to mix spices together, a masala mixer will help you create blends that are perfectly balanced.
Masala Mixing Machine from Mill Power Pvt. Ltd. –
1. Small-Sized Businesses – 15 kgs/hour:
1 HP Ribbon Blender
2. Medium-Sized Requirements ~30-50 kgs/hour:
1.5 HP Masala Mixer
2 HP Spice Mixing Machine
3. Large-Scale Production – 100 kgs/hour:
3 HP Ribbon Blender
Roaster Drying Machine
A roaster is a type of drying machine that is used to remove moisture from spices. Roasters work by circulating hot air over the spice, causing the water to evaporate.
This type of drying machine is very popular in the spice industry because it is effective at removing moisture without damaging the flavor or aroma of the spice.
Get the best Roaster from Mill Power Pvt. Ltd.- 1 HP Roasting Drying Machine.
3) Packaging Machines-
After the grinding process, the spices need to be packed properly to maintain their freshness and aroma.
There are a variety of packaging machines available that can be used to pack spices. The most popular type of machine is the vacuum packing machine.
The vacuum packing machine removes all the air from the bag and seals it tightly. This helps to keep the spices fresh for a longer period of time.
Other types of packaging machines include:
- Weighing Scale
- Pouch Packing Machine
- Flow Wrap Machine
- Sealing Machine
- Stretch Wrapping Machine
- Corrugated Cartons
4) Label Printing Machine-
A label printing machine is used to print labels for the spice packets. This is an important step in starting a spice business because it helps you create a professional-looking product.
The label printing machine can be used to print a variety of labels, including:
- Nutrition Facts Label
- Ingredients Label
- Allergen Statement
5) Barcode Scanner and Printer-
A barcode scanner and printer are used to print barcodes for the spice packets. This helps you track your inventory and keep track of your sales.
Barcode scanners and printers are available in a variety of sizes and prices. You can choose the one that best fits your needs.
6) Storage Containers-
After the spice products are packed, they need to be stored properly to maintain their freshness. There are a variety of storage containers available, including:
- Glass Jars
- Plastic Bins
- Storage Cabinets
After the spices are packed and labeled, they need to be transported to your customers. There are a variety of transportation options available, including:
With the right equipment, you can start a spice business that will be successful and profitable for years to come.
FAQs on Starting A Spice Powder Business
Here we have compiled a list of FAQs that will help you get started with your business.
1. What are the most popular Indian spices in India?
Some of the most popular Indian spices in India include cumin, chili powder, turmeric, coriander, fennel seeds, and garam masala.
2. Where can I source raw material for my spice factory?
There are numerous raw material suppliers in India. You can find them online or through word-of-mouth recommendations.
3. What is the best way to package and store spices?
The best way to package and store spices is in airtight containers or corrugated cartons. This will help to keep the spices fresh for longer.
4. What are the taxation requirements for starting a spice business in India?
To start a spice business in India, you will need to obtain a tax registration number from the Income Tax Department. You will also need to pay GST on your spices.
For more information on taxation requirements for businesses in India, you can visit the website of the Central Board of Excise and Customs.
5. What are the export requirements for Spice Powder?
All shipments of Spice Powder must be accompanied by an invoice that includes the following information:
- The name and address of the exporter
- A description of the goods being shipped
- The HS code for the goods being shipped
- The value of the goods being shipped
- The country of origin of the goods being shipped
- The destination country for the shipment
- The name and address of the consignee
All shipments of Spice Powder must also include a certificate of analysis from the manufacturer.
6. What are some of the popular spice markets in India?
Some of the popular spice markets in India include Ahmedabad, Delhi, Kolkata, Mumbai, and Chennai. These markets offer a wide range of spices that are used in various cuisines.
7. What are some of the popular spice festivals in India?
Some of the popular spice festivals in India include the Delhi Spice Festival, Kolkata Spice Festival, Mumbai Spice Festival, and Chennai Spice Festival. These festivals offer a wide range of spices that are used in various cuisines.
8. Which is the best machine to grind turmeric in India?
If your main spice is Turmeric, Impact Pulverizers are your best bet! Learn more here.
9. Which is the best machine to pulverize chilli in India?
Chilli is one of the most important spices of India, thus giving huge scope for profitable business investment. Blower Pulverizers are the best choices when it comes to chilli grinding, here’s why.
Final Thoughts on How to Start a Spice Powder Business In India
There are many ways to start spice business in India. You can either start your own spice powder business from scratch or buy an existing business.
If you’re starting your own business, it’s important to have a clear idea of the spices you want to sell and the target market you want to sell them to. It’s also important to have a good knowledge of the spice manufacturing process so that you can produce high-quality spices.
If you’re looking to buy an existing business, there are many things to consider before making a purchase. Make sure you do your research and understand the business before making any decisions.
With the right planning and execution, starting a spice business in India can be a very successful venture. Call us today to learn more about how to start spice business with our machinery!