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Are Indian spice exports heading for crisis?

Spice mix contamination investigations, tightened safety rules, market volatility due to crop production changes, and price hikes are affecting India’s spice market.

Global revenue for spices and herbs has reached almost $49 billion in 2024, Statista reports. The market is expected to grow at an annual rate of 5.75%.

India is one of the leading markets for spices. The country’s spice exports totalled $4.25 billion during the 2023-2024 season, making up 12% of the world’s export share. In the 2024 fiscal year, India’s exported spices are valued at approximately $692.5 million.

However, several significant factors threaten the sector’s success. While the Russia-Ukraine war continues to impact the market, food safety concerns, crop disruption, and new rules on maximum residue limits (MRLs) are creating further uncertainty.

Routine screening identified banned substance in spices

Contamination concerns of certain branded spices have led to recalls, prompting fear for the quality of the broader flavour segment. In April 2024, countries including Singapore, Hong Kong and Nepal, suspended sales of certain spice products. The items included three spice blends produced by spice manufacturer MDH and a spice mix for fish curry by Everest.

Other countries, including Australia, the US and the UK announced they were strengthening their testing procedures on Indian spice goods.

The products were recalled after routine screening found they contained ethylene oxide. The gas, which is commonly used to produce other chemicals, can be used as a pesticide and sterilising agent.

In the US, ethylene oxide is regulated under the Federal Insecticide, Fungicide, and Rodenticide Act. Some products containing the gas are considered pesticides, as they can kill viruses and bacteria. Food Standards Australia New Zealand and the UK’s Food Standards Agency have also confirmed that ethylene oxide is not permitted in food products sold in their respective countries.

(Click here to find out more about the different regulations governing ethylene oxide use around the world).

A potential multi-billion dollar disruption in spices

In May 2024, the Global Trade Research Initiative (GTRI) released a report highlighting the “crisis in India’s spices trade”, specifically that quality concerns over these products could threaten over half of India’s spice exports.

If China, following Singapore’s lead and influenced by developments in Hong Kong and ASEAN, chose to adopt comparable measures, GTRI foresees a potentially significant decline in Indian spice exports. The impact could affect exports worth $2.17 billion, which is 51.1% of India’s total global spice exports.

There is a concern that the situation may escalate if the European Union (EU), which frequently turns down Indian spice shipments due to quality concerns, does the same, the GTRI says. If the EU rejects Indian spice shipments on a broader scale, it could potentially result in an additional $2.5 billion impact, leading to a total potential loss of 58.8% of India’s global spice exports.

“India needs to address the quality issues with urgency and transparency,” says the report. To re-establish trust and credibility in Indian spices, rapid and extensive food safety investigations, company accountability, and repercussions are called for.

“The response from Indian authorities has been tepid and formulaic,” the report said. While it noted that after global markets reacted by suspending sales and upping their testing processes, the Spices Board and the Food Safety and Standards Authority of India (FSSAI) then started to routinely sample spices, there remains no definitive statement on the quality of these spices.

“This lack of clear communication is disappointing, especially given the comprehensive laws and processes for quality assurance,” says GTRI. The worry is that the perceived delay in responding to quality and safety concerns raises further doubts over the wider spice market. “If the quality of products from top Indian firms is questionable, it casts doubt on the integrity of spices available in the Indian market as well,” it says.

India introduces maximum residue level rule

In a further hit to the spice market, the recalls and testing requirements came as the FSSAI tightened the rules on maximum residue levels (MRLs) of pesticides for spices and culinary herbs. In making the announcement, the FSSAI revised the methods and limits allowed for certain pesticides.

It came after the Authority previously said in 2022: “In India, in the case of spices and culinary herbs, MRLs are not specified for most pesticides due to a lack of field data”. The Central Insecticides Board & Registration Committee is responsible for providing such data that then endorses India’s rules.

Production and price changes

Volatile prices in the spices market are also destabilising the sector. In recent weeks, the cost of cumin has gone up and then gone back down, feed commodity trading platform Mundus Agri says. The financial uncertainty is due to the significant cumin production volumes from other countries, including China, Afghanistan and Turkey.

India is responding to this growing competition by preparing to release larger quantities of spices. Predictions indicate this will likely occur at the beginning of July at the latest, as farmers need revenue the most during this time of the season. However, with global concerns over Indian spices still prevalent, this raises doubts about the country’s ability to compete with other markets and provide the needed funds to protect farmers’ livelihoods.