Spice industry banks on quality to builds trust in domestic market

India’s spice industry is seeing a growing shift from export compliance to farm-level food safety, as organised players seek to build consumer trust in a largely unorganised domestic market. The focus intensified after the Spices Board made ethylene oxide (ETO) testing compulsory for every spice consignment exported to Singapore and Hong Kong in April 2024, following recalls of Indian branded spice products in the two markets.

The episode highlighted the need for stronger traceability, testing and quality controls across the supply chain. India produced an estimated 11.99 million tonne of spices in FY25, with exports valued at $4.52 billion, according to the Spices Board.

However, average monthly spice exports in FY26 stood at $414 million, down 20 per cent from $520.54 million in FY25. The quality challenge is equally significant at home. India’s spices market, valued at about ₹2.22 lakh crore in 2025, is projected to reach ₹5.29 lakh crore by 2034, growing at over 10 per cent annually.

Around 60 per cent of the domestic market remains unorganised, while national brands account for less than 30 per cent of revenue. This fragmentation is creating an opportunity for organised brands to differentiate through quality assurance, traceability, food safety and consistent standards.

The shift is also pushing companies upstream, as pesticide residues introduced during cultivation cannot always be addressed through processing alone. Spice makers are increasingly exploring Integrated Pest Management, controlled pesticide use, soil testing, farmer training, direct procurement and tighter testing systems.

Such supply-chain changes require sustained engagement with farmers and sourcing communities. Jaipur-based Shyam Dhani Industries, which listed on the NSE SME platform in December 2025, has positioned itself around IPM and ETO-free spices and earmarked ₹7 crore from its IPO proceeds for brand creation and marketing over two years.

Its total income rose 17 per cent to ₹146 crore in FY26, while net profit increased 6 per cent to ₹9 crore. Other expenses, however, rose from ₹14 crore to ₹20 crore, reflecting the cost of building the brand. For emerging spice companies, the next phase of growth could depend on stronger domestic quality standards, rising consumer awareness and new-age distribution.

Quick-commerce platforms, in particular, can help regional brands reach urban consumers without immediately investing in extensive traditional distribution networks.