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How to start Spices Business in India | Recipe to Success

By Shreya Durgan

Are you looking for how to start spices business in India?

It is one of the most well-known businesses. In fact, India produces 75 out of 109 listed spices in the world that is almost 70% of the total production.

So, the good thing is that the industry is huge and potential to invest. However, with this huge market comes tough competition. The trick is to find your niche and excel in that.

Steps to start Spice Business in India

Business Planning
Register your Spice Business
Get the Licenses
Set up the Location
Source the Raw Materials and Equipment
Decide on Investments
Start your Spice Business

Step 1: Business Planning

Planning is the first step of setting up your business. So, it is crucial and necessary for bringing your idea to life.

An effective business plan requires three things:

Research
Study
Analysis

Of the spices industry, the market and consumer behaviour.

With this in mind, the things to keep on check while making a business plan are:

Business Name
Business Summary
Founder and Director
Investment
Location
Target Niche
Marketing Strategy
Product Uniqueness
List of Products

List of Specific Recipes Masalas

Sambhar Masala
Chola Masala
Pav-Bhaji Masala
Fried Rice Masala
Manchurian Masala
Chilli Paneer Masala
Parantha Masala
Curry Masala
Chicken Masala
Biryani Masala
Tandoori Masala
Pickle/Aachar Masala
Butter Paneer Masala
Rajma Masala

You can always come up with your own special list.

What can you manufacture or trade?

You can choose from any of the following categories for getting into the masala business:

Spices for Specific Preparation
Spice Powder
Whole Spices (like Cardamom, Cloves, Cinnamon)

Step 2: Register your Spice Business

After making a plan, register your spice business officially.

You can register your business as any of the following structures:

Private Limited Company
Partnership
One Person Company

Fill in your details on the right and our experts will contact you within 24 hours and help you with company registration online.

Documents Required

Passport Size Photograph of all Directors (Scan Copy)
PAN Card Copy
Proof of Identity of all Directors
Proof of Residence of all Directors (NOT OLDER THAN 2 MONTHS)
Aadhar card of all Directors
Address Proof of Company (NOT OLDER THAN 2 MONTHS)
Electricity bill
Telephone/Mobile bill
Internet / Broadband/ Wi-fi/ Fiber bill ~Any Other Government Utility Bill

Step 3: Get the Licenses

A Spice Business needs the following licenses to operate in India

FSSAI License
GST Registration
Shop and Establishment Act License
MSME Registration
BIS Certificate (For Quality Check)
NOC from State Pollution Control Board (In case of Powdered Spices)
Trade License (Regionally)
Trademark for your brand (Optional but recommended)

However, you may not require some of these licenses depending on your business plan.

After acquiring the Licence required for Spice Business you are good to go for starting your operations.

You can get in touch with our experts for queries regarding how to start spices business in India and start one instantly.

Step 4: Set up the Location

Choosing the right location depends on the scale of the business and budget.

It is preferable to choose a location in your city because you know the actual rates of the area to rent there.

Above all, you already have a link with the retailers and suppliers of your city.

For setting up a spice processing unit in India, you require a recommended area of 200 sq. yards.

For storing the packed products, you will need around 100-150 sq. yards minimum.

Step 5: Source the Raw Materials and Equipment

Raw materials are the key to the secret door of masala making business. So, if you got that right, you can open all the doors to success.

The quality of raw materials decides the smell, taste and customer reliability on the product.

Accordingly, I did some deep research for you and sorted out the list of states and their famous spice production to source it from.

Spices	States
Pepper	Kerala, Tamil Nadu, Karnataka.
Cardamom	Kerala, Tamil Nadu, Karnataka.
Ginger	Andhra Pradesh, Karnataka, Kerala, Madhya Pradesh (MP), Orissa, Arunachal Pradesh, West Bengal, Mizoram, Sikkim, Himachal Pradesh, Meghalaya, Tamil Nadu, Chattisgarh, Jharkhand, Uttaranchal
Turmeric	Andhra Pradesh, Meghalaya, Karnataka, Orissa, Tamil Nadu, West Bengal, Maharashtra, Kerala, Assam, Bihar, Uttar Pradesh, Arunachal Pradesh, Tripura.
Chilli	Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Orissa, Tamil Nadu, Uttar Pradesh, West Bengal, Madhya Pradesh, Uttaranchal, Rajasthan
Coriander	Uttaranchal, Rajasthan, Uttar Pradesh
Cumin	Rajasthan, Uttar Pradesh, Gujarat
Fennel	Gujarat, Uttar Pradesh, Rajasthan
Fenugreek	Uttar Pradesh, Gujarat, Rajasthan
Clove	Tamil Nadu, Karnataka, Kerala
Nutmeg & Mace	Tamil Nadu, Karnataka, Kerala
Cinnamon	Kerala, Tamil Nadu
Saffron	J & K
Ajowan / Ajwain	Jammu & Kashmir, Bihar
Dill Seed	Rajasthan, Gujarat
Kokam	Karnataka
Mustard	Uttar Pradesh, Andhra Pradesh, Bihar
Tejpata	Sikkim, Arunachal Pradesh (AP)
Pomegranate seed	Tamil Nadu, Maharashtra
Herbal & Exotic Spices	Tamil Nadu

Machines and Equipment required for the spice business are:

Grinding Machine
Blending Machine
Pulveriser
Weighing Machine
Packaging and Box Printing Machine
Compressor
Roaster
Disintegrator
Sieves

After that, for packing the masala's, you will need:

Plastic Packets (Size : 50 gm, 100 gm, 150 gm, 200 gm, 500 gm & 1 kg)
Cardboard Box
Paper Packets

Masala Manufacturing Process

Step 6: Decide on Investments

After finding the perfect location, it is time to get the funds and investments for the masala factory project cost.

To start a spice business in India, you will require a minimum of Rs.5 lacs- Rs. 20 lacs as the initial investment.

But before estimating the investment required, shortlist your expenses to run the masala business for 2 years. At least, until you start establishing your presence and earn profits.

Therefore, I have listed some primary expenses in the spice business:

Rents
Machinery
Raw Materials
Logistics
Packaging
Salary
Utility Bills
Furniture
Office Setup
Accounting Software
General Expenses

After estimating the fund requirement for the masala business, here are some sources of finance that could help you:

Friends
Family
Savings
Business Loans
Angel Investors
Startup Funding
SMERGERS

Step 7: Start your Spice Business

As soon as all the above tasks are fulfilled have a grand opening and start your masala business operations on a good day.

Hiring

To start your masala making business, the people you require initially are:

Nutritionist
Manager
Accountant
Labour for operating machines, processing, packaging
Security Guards
Sales Person
Logistics Team
Drivers
IT professionals (hire freelancers at the initial stage)

After that, allot and delegate the tasks to the team.

Finally, have a pooja and kickstart your work.

Marketing & Advertising

Marketing and Advertising are the two things that can take your spice business to ultimate heights if done right.

When packing your products, make sure to choose the colours that attract customers.

For example, colours like red and yellow tend to evoke the tastebuds and effectively grabs attention.

Keeping a check on these things will also help you establish your business presence swiftly.

You can also advertise in newspapers and through hoardings in your area as well as nearby cities.

These two methods may be old but are still very effective to catch the customers attention.

Also, you can sponsor events on your business's behalf and get recognised through it.

Scope of Masala Business in India

Indian spices are used globally in a very impressive quantity. In fact, the masala business industry is growing by Rs. 40,000 crores every year. As a result, it is giving high returns on low investment.

Not only this but, even if an individual starts a masala business from home, they can earn good profits in a short period.

Above all, even the domestic demand for spices are very high in Indian households that you do not need to look for foreign markets.

So, it is clear that the spice industry definitely has a good scope with a growth rate of 15% every year with a very promising future.

Therefore, if you have a great strategy and good marketing, your success in the industry is certain.

Potential in Masala business

Today, the current market demands are generating good opportunities for the spice industry every day. Moreover, as the technology has advanced to a remarkable extent, you can supply worldwide and have a larger market.

In other words, the spice business has enough growth potential because of various uses and applications. They are used in food as well in cosmetics and have medicinal properties.

Frequently Asked Questions

1) Where will you sell the spices to earn maximum profit?

Generally, the masala business profit margin is 30% - 50%.

You can sell the spices in departmental stores (easyday, reliance fresh), grocery stores etc. Some of the platforms that are best to start selling spices are:

Local Retailers: You can find the dealers by asking the retailers of your city or neighbourhood about who supplies them with the spices.
Wholesalers: Find the wholesalers who supply packed food in your market area. Generally, they are present in small streets within the market itself.
Online Websites: Create a business account on websites like Amazon, Flipkart, Indiamart etc and launch your product online to target a wider market. In fact, you can even get bulk orders from these websites.
Exporting: As Indian Spices are famous all over the world, exporting is also a good option to consider. However, for that you have to apply for an IEC Import-Export Code) License.

Also, you can have a sales team that does the on-field job. For example, sample supply, order booking and distribution to the retailers in the nearby cities.

2) How much time does it take to set up a Spice Business?

Usually, it takes around 2-4 months to set up a spice business.

3) What are Spices for Specific Preparation?

These are the spices that are specific to recipes. For example, Chola Masala, Sambhar Masala, Pani Puri Masala etc. Therefore, if you want to add uniqueness to your business, focus on producing something specific.

4) Where can you get the recipe for these masalas?

Sometimes the recipes are passed on through generations in families. However, you can also search for these recipes on the internet. It is always smart to consult a food enthusiast. Now, this question in your mind will prove your interest in the business. Also, it shows your willingness to give the best to customers.

Conclusion

Spices business in India is one of the most well-known and established businesses. In fact, India produces 75 out of 109 listed spices in the world that is almost 70% of the total production.

So, one good thing is that it is a huge market and opportunity. However, with this huge market comes tough competition. The trick is to find your niche and excel in that first.

The two things that buyers look for when they buy spices is taste and smell. If you master these, your business is bound to succeed. Moreover, according to IBEF, India exported US$ 44 Billion worth of spices in the financial year 2021.

SPICE BUSINESS EXPORT FY21