Opening a Spice Export Business Unit

by Enterslice ITES Pvt. Ltd. Start and Manage Business

India has traditionally been the house to a wide variety of spices. Due to their aroma, texture, taste and medicinal value, the Indian spices have been in great demand since ancient times. India is the largest producer, consumer, and exporter of spices in the world. Of the 109 types of spices listed by the International Organization for Standards (ISO), India alone produces about 75 of them. Some of the top Indian spices are pepper, cardamom, chillies, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, ajwain and many more.

The government of India had specially created the Spice Board of India in 1987 under the Spices Board Act, 1986 to work towards promotion of Indian spices, in the domestic as well as international market. The board works under the aegis of the Ministry of Commerce & Industry. Other than promotion, it also ensures proper standards, quality control and certifications, registrations to exporters and participates in major international and domestic fairs and exhibitions.

What are the current Spice industry trends in India?

In 2008-09 India was growing and producing about 4000 metric tons of spice while in 2014-15 it produced about 5300 metric tons of spices. Andhra Pradesh is the highest producer of spices in India followed by Rajasthan. Interestingly about 12.98% of India’s total area of agriculture is used for growing spices. In 2015, there were about 3700 registered spice exporters in the country. By 2020, the total value of spices produced in India is expected to touch Rs. 30,000/- Crore.

Export figures:-

In FY 2017-18, the total value of spices exported was USD 3.10 billion, that was approximately 1.08 billion kilograms of spices. Indian spices are in huge demand in the US, Vietnam, China, UAE, and Iran.

What are the essential licenses that need to be obtained for starting a spice export business in India?

Mandatory preliminary registrations include:-

a. Registering the business entity either as a sole proprietor, partnership firm, LLP or private limited company. Partnership Deed, Partnership Agreement, Memorandum of Understanding and the Articles of Association drawn up as per the type of business entity.
b. Register a Trademark for the name of the organization, this helps in brand building.
c. Getting the Digital Signature Certificate, and having the Opening a current account with a nationalized bank
d. Registration under the Goods and Services Tax for the GST Identification Number
e. Registration with the Ministry of Micro, Small and Medium Enterprises to get the Udyog Aadhaar number.
The application and registration for GST, as well as MSME Udyog Aadhaar, can be done online following a simplified process.

The other specific registrations that are necessary for starting your spice business are:-

a. Import Export Code (IEC) from the Director General of Foreign Trade (DGFT). For undertaking any export/import activity, this code is mandatory. The application for the same can be done online and by the end of the process, the business owner will be issued a ten digit code.
b. Register with the Spice Board of India’s nearest branch from the location of the manufacturing unit or the port of export. This process can now be done online too. The fresh or renewal certificate is issued only after inspection of the manufacturing unit. In fact, as per a revision made in the Handbook of Procedures by the DGFT in 2005, it was made mandatory for all export-oriented units including the ones in SEZ region, engaged in import/export of spices to obtain the Registration cum Membership Certificate (RCMC) from the Spices Board of India. Registration with Spice Board also helps the entrepreneur in a number of other ways:-

· Registered spice exporters having the Spice House certificate can avail special subsidy for sending spice samples abroad to potential clients.

· Registered spice exporters also get a subsidy for printing promotional literature, video or brochures.

· Interest-free loan up to 100% of the listing fee and 50% of product development cost is provided for promotion of Indian spices in international markets that have lesser number of Indians living.

· Special discounts and subsidies are also given to spice growers in the North-eastern region and hilly states of the country

· Special assistance is provided to spice exporters who wish to participate in international trade fairs and exhibitions.

Source: - https://www.deviantart.com/entersliceites/journal/Opening-a-Spice-Export-Business-Unit-756515952