Regulatory reforms could expand India’s domestic spice market to USD 13 bn by 2034: ICRIER

• Addressing regulatory gaps could drive India’s spice market beyond USD 13 bn by 2034.
• Whole and ground spices account for 63% of the market, while 60–80% remains           

According to an ICRIER policy brief titled “Streamlining the Indian Spices Market: Issues and Way Forward”, India’s domestic food spice market has the potential to grow from USD 5.15 bn in 2025 to over USD 13 bn by 2034 if stakeholders address key regulatory gaps related to standardisation, implementation, testing and monitoring, particularly across the conventional spices supply chain.

The report states that whole and ground single spices account for 63% of the domestic food spice market, while 60–80% of the overall spices market remains in the informal sector. Although the government has undertaken several measures to formalise the sector and strengthen food safety standards, food safety concerns continue to persist. The brief also notes that micro, small and medium enterprises (MSMEs) continue to face challenges in scaling up to the organised branded segment, with the formal spices sector growing below its potential due to structural constraints limiting MSMEs’ transition to the organised market.

Standards, testing and supply chain issues

The policy brief highlights that India produces around 75 varieties of spices, but the Food Safety and Standards Authority of India (FSSAI) has prescribed standards for only 45 varieties. Standards for spices such as kokum and vanilla are yet to be notified, resulting in quality variations. It also points to inconsistencies between standards notified by FSSAI and the Bureau of Indian Standards (BIS), with overlapping or conflicting provisions in certain cases. The report recommends aligning domestic standards with the United Nations’ Codex Alimentarius, while an FSSAI representative stated that the authority is working with Codex to align Indian standards with global benchmarks.

The absence of uniform testing procedures across laboratories operated by different agencies increases compliance costs by an estimated INR 25,000–30,000 per sample, according to the report. It also highlights excessive use of pesticides and insecticides at the farm level, which falls outside FSSAI’s regulatory ambit as its standards apply only from the post-production stage. In addition, poor post-harvest storage and processing practices, along with fragmented supply chains and limited farm-level traceability, continue to contribute to product contamination and quality concerns.

Outlook

According to the ICRIER policy brief, addressing regulatory gaps in standardisation, implementation, testing and monitoring, while improving food safety oversight, quality standards and supply chain traceability, could support the expansion of India’s domestic food spice market from USD 5.15 bn in 2025 to over USD 13 bn by 2034.