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India’s Spice Industry Is Turning Quality & Traceability Into A Growth Opportunity

Posted on September 7, 2026 By

New Delhi [India], September 7: In April 2024, the Spices Board made ethylene oxide (ETO) testing compulsory for every spice consignment exported from India to Singapore and Hong Kong. This happened after Indian branded spice products were recalled in both markets.

Initially, this was seen mainly as an export compliance requirement. However, two years later, the issue has become much bigger. The focus is now shifting towards the quality and safety of spices sold within India as well. Spice companies are increasingly realising that ensuring food safety may require them to take responsibility for the entire supply chain-from the farm to the consumer.

Strengthening India’s Position In Global Spice Markets

India remains one of the world’s largest spice producers and exporters. According to the Spices Board’s annual report, India produced an estimated 11.99 million tonnes of spices in FY25, while exports were valued at US$4.52 billion.

Major export categories included:

  • Chilli: US$1,342.52 million
  • Cumin: US$732.35 million
  • Turmeric: US$341.54 million

FY26 export trends have been relatively softer, with average monthly exports of US$413.94 million, compared with US$520.54 million in FY25, representing a decline of 20.48%. While factors such as currency movements and importer demand also influence exports, the 2024 episode highlighted the importance of strong compliance and quality systems in protecting India’s position in global markets.

The experience has reinforced the need for greater traceability and testing throughout the spice supply chain. The larger opportunity, however, also lies within India.

India’s spices market was valued at approximately ₹221.83 thousand crore in 2025 and is projected to reach around ₹528.99 thousand crore by 2034, growing at a little over 10% annually.

A key feature of the Indian market is its highly fragmented structure. Around 60% of the market remains unorganised, while national brands together account for less than 30% of total revenue.

This presents a significant opportunity for organised spice brands to expand by offering consumers greater:

  • Quality assurance
  • Traceability
  • Food safety
  • Consistent product standards

Many Indian households still buy loose spices with limited visibility on sourcing and testing. Growing food-safety awareness gives organised brands an opportunity to build trust and expand in this largely unorganised market.

From Farm to Shelf: Building Trust Through Quality and Traceability

The focus on food safety is increasingly shifting upstream towards the source of raw materials. Since pesticide residue can enter the supply chain during cultivation, processing alone cannot always address the issue. This makes farm-level sourcing and engagement increasingly important.

The industry is therefore moving towards Integrated Pest Management (IPM) through controlled pesticide use, soil testing, farmer guidance, direct procurement, reduced dependence on open-market sourcing and stronger testing systems. These practices require long-term engagement with sourcing communities and cannot be established overnight.

For organised spice brands, this creates an opportunity to differentiate through purity, traceability, clean-label and ETO-free products, quality testing and stronger food-safety standards. Processing also plays a role, with cold grinding helping preserve natural spice aroma, while blended masalas can support greater product differentiation.

Ultimately, the quality of the finished product depends on the quality of the raw material entering the factory. Farm-level sourcing is therefore becoming an important link between responsible practices, product quality and consumer trust.

The Economics of Building Trust

Shyam Dhani Industries Limited, a Jaipur-based food processing company engaged in the manufacturing and processing of spices listed on the NSE SME platform since 30th December 2025, offers a useful worked example of the economics of building a quality-led brand.

The company has built its positioning around IPM and ETO-free spices, while investing in communicating that proposition to consumers. As part of its IPO proceeds, ₹635.63 lakh was earmarked for brand creation and marketing over two years, alongside a redesigned product range and the appointment of a brand ambassador.

The investment is already visible in the numbers. In FY26, Shyam Dhani Industries Limited total income rose 17.21% to ₹14,621.88 lakh, while profit after tax increased 6.16% to ₹853.70 lakh. At the same time, other expenses increased from ₹1,353.88 lakh to ₹1,990.76 lakh.

That is an important distinction for the industry. Category-building is a cost line before it becomes a moat.

For Shyam Dhani Industries Limited, the opportunity is also tied to the scale of the underlying supply-chain challenge. Management’s own estimate is that only 15% to 20% of Indian agricultural practice is currently IPM-aligned. If that estimate holds, the transition towards cleaner and more controlled sourcing still has a long way to go.

The implication is broader than one company. For organised spice makers such as Shyam Dhani Industries Limited, building a differentiated proposition around purity requires investment not only in packaging and marketing, but also in sourcing systems, farmer engagement, testing and consumer education.

Key Drivers Shaping the Future of the Spice Industry

Three factors are likely to play an important role in determining how quickly purity, traceability and food safety become stronger competitive differentiators in India’s spice industry.

1. Stronger Domestic Quality Standards

Export consignments are subject to stringent testing requirements. Wider adoption of quality and testing standards within the domestic market could help create a more level playing field and strengthen consumer confidence across the industry.

This could particularly matter for organised players such as Shyam Dhani Industries Limited, which are investing in ETO-free and quality-led product positioning while competing against a large unorganised market.

2. Growing Consumer Awareness

As consumers become increasingly aware of food safety and product quality, demand for better sourcing, testing and traceability could continue to grow.

The ability of companies to offer these benefits while remaining accessible and competitively priced will be important for large-scale adoption.

3. New-Age Distribution Channels

Quick commerce is emerging as an important opportunity for regional and emerging brands.

These platforms can enable companies such as Shyam Dhani Industries Limited to reach consumers in major cities without immediately building an extensive traditional distribution network. For regional brands, this can shorten the distance between a local manufacturing base and a national consumer.

Building the Next Phase of India’s Spice Industry

Three factors will determine whether purity and traceability become a real basis of competition: stronger domestic enforcement, consumer willingness to pay, and wider distribution.

While organised players such as Shyam Dhani Industries Limited are investing in IPM-led sourcing, ETO-free products, quality testing, brand building and new-age channels such as quick commerce, the challenge is to convert these investments into lasting consumer trust and differentiation. As sourcing systems improve and awareness grows, purity and traceability could become important drivers of the next phase of growth in India’s spice industry.

Sources

  • Spices Board India, Annual Report FY24–25 – production estimate for FY25, via IBEF spice industry page
  • APEDA – India spice export value FY25 (US$ 4.52 billion), via IBEF
  • DGCI&S, RBI and NIRYAT – FY26 versus FY25 monthly average spice export comparison, via IBEF
  • DGCI&S / RBI / NIRYAT – commodity-wise spice export values FY25 (chilli, cumin, turmeric), via IBEF
  • IMARC Group – India Spices Market size 2025, 2034 forecast and organised/unorganised split, 2025
  • Spices Board of India directive mandating ethylene oxide testing for consignments to Singapore and Hong Kong – Business Standard, 25th April 2024

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