Startup

How to Start a Spices /Masala Business in India?

How to Start a Powdered Spices Business in India

The fragrant portions of tropical plants that have historically been used to flavour food are known as spices, as are the dried seeds or fruit of temperate species that are used in a similar manner. Spices are fragrant seeds, berries, roots, buds, bark, and other parts of plants that are gathered for use in seasoning food.

Since a long time ago, spices have been essential to Indian cooking. These are some of the most expensive components found in both residential and commercial kitchens. Indian spices are rich in qualities that are crucial for good health. They are also well-known worldwide for their use as digestives and as appetisers. These spices are frequently used to make various kinds of chutneys, pickles, and jams because they have antioxidant and preservation characteristics.

Since ancient times, Indian spices have contributed significantly to improving economic conditions. Even if the powdered spices business has altered in numerous ways and leaps and bounds since then, its significance and purpose remain the same in today’s modernised and technologically advanced globe. Let’s start by having a thorough grasp of the Indian spice industry.

Scope of doing powdered spices business in India

In all varieties of Indian cuisine, spice powder is a need. Every cuisine in India includes one or more types of spices as a key component. Spices contribute to the flavour, colour, and scent of food. In India, whole spices like cardamom, pepper, cumin, bay leaf, cinnamon, and others are used often. Powdered spices include turmeric, chilli powder, coriander, cumin, and others. As a result, starting a powdered spices business is likely to be successful.

Now that you’ve made the decision to launch your company, the first step is to determine the potential for profit, existing market trends, and the level of demand for the goods you want to produce. There are now adequate chances for the powdered spices business to grow even more due to the present market demands.

A Quick Review Of Spice Statistics

In order to produce and market Indian spices on the world market, the Indian Government established the Spices Board in 1987. The Spices Board is an agency of the Indian government’s Ministry of Commerce and Industry. Exporting spices overseas is subsidised for authorised exporters who possess the Spice House Certificate, Brand Registration with the Spice Board, or Organic Certificate.

India exports a total of 1.53 million tonnes of spices, and from the financial year 2018 – 2022, the total exported quantity from India grew at a CAGR of 10.47 per cent. For the coming future, it is estimated to grow market value of USD 34.71 billion by 2023.

Advantages of starting a powdered spices business in India

  • Indian spices are highly sought-after and have a solid reputation on the international market.
  • The spice industry offers a sustainable and financially feasible opportunity to generate significant annual revenues.
  • Spice exporters also receive a number of subsidies that enable them to send spice samples overseas for less money.
  • Additionally, spice exporters pay the creators of promotional films, booklets, and other marketing endeavours.

What is the Spices Board Act, 1986

The Spices Board Act of 19861 established the Spices Board on February 26, 1987. It is one of the Ministry of Commerce & Industry’s five commodities boards. It is an autonomous organisation in charge of developing Indian spice goods and promoting exports.

Bill 2022: Spices (Promotion and Development)

  1. Documents Required to Be Submitted for Spice Board Registration
  2. These documents are required to get the certificate of registration as a spice exporter in India;
  3. A self-certified copy of the Partnership Deed, Memorandum of Association, or Articles of Association, as required by the circumstances of the particular case
  4. A self-attested copy of the IE Import-Export Code Certificate.
  5. Exporters of manufactured spices who wish to apply must provide a self-attested document from the Directorate of Industries.
  6. Form-I, the specified form, is found in Section 12 of the Spices Board Registration of Exporters’ Regulations 1989.
  7. The registration fee is in the form of an uncrossed demand draught payable to “Spice Board and Request.”
  8. Self-certified copies of GST Registration Certificate
  9. A photocopy of the applicant’s PAN card that is self-certified
  10. A passport-sized image of your company’s CEO or another designated officer

7 Facts about Starting a Powdered Spices Business in India

You must be aware of the following information in order to effectively launch your powdered spices business in India:

REGISTER YOUR BUSINESS

Make a plan and then formally register your spice business. Any of the following business structures may be used to register your company:

COSTS ASSOCIATED WITH THE BUSINESS

By 2020, the Indian market is projected to grow to almost $18 billion. 50 different types of spices are produced in India, which is the world’s greatest producer. This powder makes cooking more accessible.

In this regard, a few significant cost factors are mentioned.

  • These are useful and let you prepare a variety of delectable foods faster and with less physical work.
  • These powders are used on a regular basis by every commercial food business, including hotels, restaurants, catering, and many more.
  • With the help of this powder, starting a lucrative business is simple and just requires a minimal initial expenditure.
  • Initial outlay: 50,000 to 100,000 INR.
  • 250 square metres of space is needed.
  • The profit percentage ranges from 50% to 70%.
  • Earnings: From 50,000 to 150,000 per month in sales averaging 100 kg/day.
  •  Additional costs will also be incurred for personnel pay, upkeep of the equipment, and marketing expenses.

LICENSING REQUIREMENTS

Since spice powder is considered food, it must go by a number of rules set down by the government, including:

  • Obtaining a GST number also requires GST registration.
  • Businesses that qualify as SMEs can register and qualify for state government facilities and subsidies.
  • Apply for a trade mark, Udhyam/MSME, BIS, and IEC certification. • Obtain a commercial licence.
  • To guarantee effective goods and services to clients, businesses must obtain ISO 9001 certification.
  • Obtaining the AGMARK certificate is advised.
  • Food Safety Certification: To prove that your goods fulfil food safety requirements, you might need to get a food safety certification, such as HACCP (Hazard Analysis and Critical Control Points).
  • FSSAI Registration: The Food Safety and Standards Authority of India (FSSAI) governs the food industry in India; to operate in this industry, you must have an FSSAI licence.
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SPACE REQUIREMENTS

  • For a small firm to get off the ground, you just need around 250 square metres for processing the parts and another 250 squares for packing. Inspect the commercial property or the necessities like power and water. Starting a food company from home is subject to state government regulations; thus, confirm that the site complies with applicable laws.
  • Ensure that the site is practical and straightforward for the intended audience to use.

RAW MATERIALS REQUIRED

Unrounded items are the primary components needed to make this powder, and with raw materials, you’ll need wrapping materials to protect the powder.

MACHINERY UTILIZATION

  • The machinery needed for this company is the grinding machine. Equipment is used in accordance with the size of industries.
  • Small-scale companies utilise the two-stage pulveriser, whereas large-scale enterprises employ the impact pulveriser machine.
  • Additional equipment is needed, including the spice mill, balance, packaging machine, compressor, and roster.

MANUFACTURING PROCESS

The following steps are involved in manufacturing the spices:

1stStep: Cleaning

Cleaning the spices is the first and most crucial step since failure to do so might result in them being a source of many illnesses. First, large physical contaminants such as stones, dust, and grime can be physically removed using a variety of techniques.

2nd Step: Drying

The entire spices are cleaned, and then dried. The procedure is typically sun-dried, although artificial means can also be employed to hasten it. How effectively the spices were dried will determine the quality of the powdered spice. Depending on the weather, there are two different types of drying processes:

  1. Drying during the dry season
  2. Drying during the rainy season

3rd Step: Roasting

After drying, the spices are next roasted to add flavour, colour, and scent to the powdered spice.

4th Step: Grinding or Pulverising

Machines that pulverise or grind materials are used to convert raw, entire spices into powder.

5th Step: Evaluation

Based on the contents and the ratio of spices to their source materials, grading is carried out. Additionally, the size, flavour, shape, density, and colour of the spice are taken into consideration when assigning grades.

6th Step: Sieving

To make sure that all of the spices have a uniform mesh size, the powdered spices are sieved.

7th Step: Packaging

The spices are then shipped for packaging following all of these stages. The amount that has to be packed is considered when the powdered spices are weighed and packaged.

8th Step: Sealing

Each packet must be properly sealed, which is very crucial. Sealing is a crucial step since it may easily be harmed by moisture, dust, or bug infestations. Inadequate sealing can lead to the waste of the spice mixture.

Licenses required to start a powdered spices business in India

In order to establish the powdered spices business in India, one has to collect all the following licenses:

The author has explained all requirements of these licenses below.

Fssai License For Powdered Spices Business

  1. What is FSSAI Registration: Food Safety and Standards Authority of India is referred to by the acronym FSSAI. The Food Safety and Standards Act of 2006 governs the autonomous Food Safety and Standards Authority of India (FSSAI), which was created under the Ministry of Health and Family Welfare, Government of India. A 14-digit licence number that is printed on all food packages must be obtained by all distributors, manufacturers, and restaurants in the food business, including medical supply stores.
  2. Categories of FSSAI licence and their requirements: There are essentially three kinds, depending on your organization’s yearly turnover type. The following categories apply to them:
  3. Basic Registration: For companies with a twelve-lakh rupee yearly revenue.
  4. State Licence: For companies having a yearly revenue between INR 12 lakh to INR 20 crore. 
  5. Central License: Businesses with a yearly revenue of more than INR 20 crores are eligible for a central licence.
  6. Documents required for FSSAI registration: There are essentially three kinds, depending on your organization’s yearly turnover type. The following is the documentation needed for the various categories:

Basic FSSAI Registration

The Food Standards and Safety Authority of India (FSSAI) is India’s top regulatory and oversight body for food safety. The law requires FSSAI Basic Registration as a result. If their annual sales is less than INR 12 lakh, small businesses and start-ups are eligible to apply for a basic FSSAI Food Safety Registration.

Once business expansion and income exceed INR 12 lakh, the basic registration must be converted to a state licence. A large corporate business won’t be able to utilise this registration since, as suggested by the name, it is relatively simple.

List of documents required for Basic FSSAI registration:

  • Authorized person address proof
  • Passport size photo
  • Business name and address
  • FSSAI declaration form
  • Nature of business details

State FSSAI License Registration

FSSAI state licence can be applied for by companies with yearly sales ranging from INR 12 lakh to INR 20 crore. The FSSAI State Licence Registration is required for small to medium-sized producers, storage facilities, transporters, retailers, restaurants, marketers, and distributors, among others. 

List of documents required for State FSSAI license:

  • A duplicate of the lease for the business space.
  • A copy of the concerned person’s government-issued identification document
  • A copy of any of the following official records (The Company Incorporation Certificate/ The Firm Registration Certificate /The Partnership Deed / The Pan Card /The GST Registration Number /The Shop and Establishment Registration Certificate / The Trade Licence.)
  • A copy of the Memorandum of Association (MOA), Articles of Association (AOA), or Partnership deed should be provided by the applicant if it is a private limited company or partnership firm.
  • A letter on corporate letterhead confirming the applicant’s right to submit an FSSAI application to the individual in question.
  • One of the following certificates—a trade licence, shop and establishment registration, panchayath licence, or corporation license—must be shown when applying for a state licence.
  • If you wish to apply for Manufacturing /Repacker category, please arrange the following documents:  Images of manufacturing plants plans for plants. The capacity and horsepower
    • of the machinery used for manufacturing on your company letterhead
    • Product information on business letterhead.

Central FSSAI License Registration

The Food Standards and Safety Authority of India requires that importers and manufacturers that operate for the federal government, as well as in the railroads, airports, and seaports, among other places, get a federal FSSAI licence. A business may apply for an FSSAI central licence if its yearly turnover exceeds INR 20 crore.

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List of documents required for FSSAI Central License:

  • A duplicate of the lease for the business space.
  • A copy of the concerned person’s government-issued identification document
  • A copy of any of the following official records (The Company Incorporation Certificate / The Firm Registration Certificate / The Partnership Deed / The Pan Card / The GST Registration Number / The Shop and Establishment Registration Certificate / The Trade Licence.)
  • A copy of the Memorandum of Association (MOA), Articles of Association (AOA), or Partnership deed should be provided by the applicant if it is a private limited company or partnership firm.
  • A letter on corporate letterhead confirming the applicant’s right to submit an FSSAI application to the individual in question.
  • If you wish to apply for the manufacturing category, please arrange the following documents
  • Images of the production facility;
  • Information on the product and factory layouts;
  • Information on your company’s letterhead about the machinery (including its horsepower and capacity) that will be utilised in manufacturing;
  • A water test report is necessary if your business runs a facility that produces mineral water.
  • Process of getting an FSSAI Certificate: The following are the processes for applying for an FSSAI registration for a medical store:
    • Create a business strategy.    Calculate your annual turnover.    Ascertain which licence type is necessary for your company.    Complete the application and any required paperwork.    
    • Submit the application along with the required fee

Bis Certification for Powdered Spices Business

Without products of a certain quality and certification, it is challenging to succeed in this cutthroat climate. A BIS ISI certificate is required for manufacturers in order to sell their goods in the Indian market. The producer must certify that their product complies with the Indian standard in order to receive BIS certification and create a high-quality product.

According to the BIS Act of 2016 Rules and Regulations, BIS has the jurisdiction to conduct out commodity, facility, programme, and process compliance. According to the BIS (Conformity Assessment) Regulations, 2018, BIS grants licences to use the standard mark or conformity certificates under the product certification system (PCS) – I. The conformity evaluation systems are outlined in the 2018 BIS (Compliance Evaluation) Regulations.

Various types of schemes under BIS certification

Three distinct certification programmes are offered by the Bureau of Indian Standards (BIS), and they are as follows:

  1. Indian Standards Institute (ISI)
  2. Foreign Manufacturers Certification Scheme (FMCS)
  3. Compulsory Certification Scheme (CRS)

Procedure to obtain BIS ISI certification:

The following steps make up the simple BSI ISI Certification procedure in India:

  • Selection of pertinent product codes
  • Complete the online ISI Mark Registration application form with the necessary documentation.
  • Factory inspection by a BIS-approved auditor
  • Sample Report submitted by a laboratory approved by BIS
  • Licences granted by the BIS Authority

Documents Required for BIS ISI Certificate in India

The paperwork requirements are both very detailed and broad for the BIS ISI Certification application and they include the following:

  • Lab Test Reports in accordance with Product Standards
  • A duplicate of the manufacturer registration paperwork
  • A manufacturing process flowchart
  • Information about the internal testing facilities
  • A copy of all relevant papers, including the permitted signatory’s government-issued ID evidence.

Foreign manufacturers’ certification scheme

The FMCS is also known as Foreign Manufacturers Certification Scheme. It is a programme run by the Bureau of Indian Standards since 2000 for foreign manufacturers in accordance with Scheme-I of Schedule-II of the BIS Act, 2016 and the (Conformity Assessment) Regulations, 2018. With the help of this programme, producers and applicants from outside can sell their goods in India using the standard mark, commonly known as the ISI Mark.

What is the process for FMCS BIS certification?

  • Submit your application and any necessary supporting documentation.
  • BIS has given the okay to check all the paperwork you submitted with your application.
  • The applicant will get a postal notification from the authorities if any required documentation, testing equipment, or other requirements are missing or insufficient. All required papers must be included with the application to satisfy the authorities.
  • For the purpose of future correspondence, an acknowledgement number will be provided.
  • A BIS officer will visit the location of your factory.
  • A BIS officer will check the product’s production procedure, testing infrastructure, and in-house laboratory testing.
  • The sample will be collected by a BIS officer, sealed, and sent to a separate facility for analysis.
  • The sample will be delivered to a laboratory approved by BIS.
  • (Note: The applicant business will cover all costs associated with testing.)
  • The applicant will be required to pay a licencing fee, an advance minimum marking charge, and any unpaid balances after obtaining the test results.
  • Finally, a letter granting a licence will be sent out.

List of mandatory documents for FMCS ISI mark certificate

The documentation component of the FMCS BIS Certification scheme of BIS is now reasonably straightforward thanks to the introduction of the BIS Online application system, which collects and preserves information. The applicant must have the following necessary papers before beginning the project:

  • Registration records for your manufacturing or business
  • A flowchart of your production procedure
  • Information on internal manufacturing capabilities and, if relevant, an outsourcing agreement for the manufacturing activity.
  • Appropriate testing facilities
  • Quality Assurance Criteria and Records
  • Accept the annual marking fee, the laboratory product testing report, and other information in accordance with BIS standards, etc. The lengthy list of documents is available from BIS and is rather onerous.

Additionally, you could need a BIS certification from the ISI, and their requirements for powdered spices are as follows:

  • The ISI number for coriander powder is 2444-1963.
  • The ISI number for chilli powder is 2445-1963.
  • Spices are subjected to testing and sampling; ISI number: 1997-1961.
  • The ISI number for turmeric powder is 2446-1963.
  • The ISI number for Curry powders is 1909–1961.

Ag mark Certification for Powdered Spices Business

The Agmark accreditation serves as a yardstick for quality and is comparable to endorsing the items’ veracity. The Agricultural Produce (Grading and Marking) Act, 1937 (as modified in 1986) governs AGMARK.

List of mandatory documents for AGMARK Certification

Here is the list of all the documents required during the process of registration:

  • Documents of company registration;
  • A copy of the memorandum of association (MOA), in case of a Limited Company;
  • A copy partnership Deed, in the case of the partnership firm;
  • Details regarding the address of the business along with contact details.
  • Address of the premises where the grading and certification will be carried out;
  • List of all the commodities to be graded.
  • Period for which the applicant has been in business.
  • Attach the test report of your product(s) along with the application. (Note: It has to be duly authenticated by an independent Agmark-recognized laboratory.)
  • Applicant has to submit the sample packs of the product
  • Details regarding the turnover of the business in the previous financial year. Along with the total gross product for the previous year (in Kgs).

Udyam Registration for Powdered Spices Business

Users can quickly register themselves under UDYAM by providing the necessary information.

  • Step 1: Go to the Udhyam Registration portal. 
  • Step 2: Complete the Udyam Registration application form with all the necessary information.
  • Step 3: Pay for your Udyam application online.
  • Step 4: Your Udyam application will be processed by one of the registration executives in step four. 
  • Step 5: You will receive your Udyam certificate at your registered email address in one to two working days.
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Gst Registration

On the GST site, you may register for GST. Form REG-01 must be used to submit a GST registration request. Entities with a GST registration number are given a GSTIN or Goods and Services Tax Identification Number (GSTIN). GSTIN has a length of 15 characters. Based on the applicant’s PAN and State, a GSTIN is assigned. The State Code is represented by the first two digits of a GST registration number. The applicant’s PAN is represented by the next 10 digits.

Documents Required for GST Registration

  • The applicant’s PAN
  • The Aadhaar card
  • A certificate of incorporation or proof of business registration
  • Photographs showing the promoters’ and directors’ identities and addresses
  • Documentation showing the business’s address
  • Statement of a bank account or a voided cheque
  • Electronic Signature
  • Board Resolution or Letter of Authorization for Authorised Signatory

Process of GST registration

Below is a description of the GST registration process in Bhopal:

  • Submit the application on the GST Portal: The GST Portal requires the applicant to input their PAN details along with their cell phone number, email address, and place of registration. Once all of the papers have been validated, the applicant will be given a Temporary Reference Number (TRN). The applicant must send the additional papers using TRN.
  • Acknowledgement of the application: The applicant will get an acknowledgement when the application has been received. After that, an officer will review the application and its supporting documentation.
  • Issue of GST registration certificate: A certificate of GST registration will be given upon the conclusion of the verification and if the application is approved.

Trademark Registration for Powdered Spices Business

A subset of intellectual property rights (IPR) are trademarks. Individuals can maintain ownership of their creative work and innovative goods thanks to intellectual property laws. In India, there are various sorts of trademarks, and upon registration, each one grants the trademark owner legal rights and protection. Trademark registration in India is done via the Controller General of Patents, Designs, and Trade Marks. You have the option of registering either physically (physical filing) or electronically (e-filing) online.

Registering a trademark on the trademark registry’s website

The first step is to register your logo by logging into your account on the trademark registry’s official website.

  1. Trademark Search: The first and most important step before registering a logo is to perform a trademark search to see whether the company name, brand, or emblem is similar to any already registered trademark.
  2. Filing of trademark application: A brand name registration application can be submitted to the appropriate trademark registrar following the completion of a trademark search. The trademark registration application must be filed, authorised, and accompanied by all necessary paperwork and fees to the government.
  3. Examination of trademark application: Competent examiners review brand name applications that are submitted to the trademark register to see if they fit the requirements for trademark registration. If so, the brand name is later made public by being published in the trademark journal. However, in accordance with the Trade Marks Act of 1999, the application may be treated as being rejected for either absolute or relative grounds. In that instance, a report on the examination will be generated. The Trademark Registry has established a deadline for the resolution of any objections or anomalies regarding the trademark application.
  4. Show Cause Hearing: If the answer to the examination report is improper, the Trademark Registry has the right to convene a trademark hearing. The trademark hearing notification will be posted to the web as well as delivered to the address listed in the application. To provide evidence in favour of the application and request the hearing officer to approve the trademark application, the applicant must appear in person or with a representative or attorney.
  5. Publication of Logo in Trademark Journal: The trademark is examined before being published in the Trade Marks Journal. The application for the registration of a logo has a four-month frozen period during which opponents or third parties may still object. The Registry will hold a hearing if a party files an opposition to make sure the parties have enough evidence to support their arguments. The Registrar of the relevant trademark registration decides based on the case’s facts and supporting documentation in favour of either party.After being reviewed, the trademark is then published in the Trade Marks Journal. During the four-month freeze period following the submission of the logo registration application, third parties may submit an opposition. The Registry will hold a hearing if a party files an objection to make sure the parties have enough evidence to back up their allegations. The Registrar of the appropriate Trademark Registry then renders a decision in favour of either side based on the case’s facts and supporting evidence.
  6. Trademark registration & certification: Your logo trademark is legally registered if the Registry doesn’t receive any objections within the allotted time limit. The Trademark Registry will provide a certificate of registration with its seal on it.

Documents Required for Trademark Registration

  • In the case of Sole Proprietorship / Individual
  • A copy of the logo, ideally in black and white.
  • Signed Form 48
  • Identification documentation for the proprietor.
  • The proprietor’s or individual’s address proof
  • In the case of Partnership/Limited Liability Partnership/ Start-up or Small Enterprises
  • An optional copy of the logo
  • Signed Form 48
  • The registration certificate for Udyog Aadhar.
  • A certificate of incorporation or a partnership deed.
  • The Signatory’s Identity Proof.
  • Address of Signatory Proof.
  • In the case of other applicants

(These include companies that are not registered with Udyog Aadhar.)

  1. An optional copy of the logo
  2. Signed Form 48
  3. A certificate of incorporation or a partnership deed.
  4. The Signatory’s Identity Proof.
  5. Proof of Signatory’s Address.

Conclusion

Due to its flavour, texture, scent, and medicinal qualities, Indian spices are renowned as “the home of spices” and are sought after all over the world. India accounts for about half of the global commerce and produces around 75 of the 109 kinds specified by the International Organisation for Standardisation. It exports this stuff more than any other country. Since it is a mass-market commodity utilised mostly in seasonings for food or culinary items, its internal demand is booming.

These are now used more frequently as a result of changing lifestyles, notably altered eating patterns and rising affluence. To establish the powdered spices business, a number of certificates or permissions are needed. Given the availability of spices in India, starting a business in the powdered spice industry may be quite successful. Additionally, there are many opportunities because there will always be a demand for spices in India. Additionally, you may sell your goods in retail, wholesale, or on internet marketplaces, depending on your preferences and convenience, to make money. 

FAQ

Why India is called the Home of spices?

India is home to 75 of the 109 spices in the International Organisation for Standardization’s list. India is referred to be the “Home Of Spices” in light of this implication.

What are the factors affecting the powered spice business in India?

• The expense of beginning a spice business;
• the extensive list of licence requirements;
• the need for a physical location to operate the business.

Which state is the Spice Bowl of India?

Kerala has gained the nickname “India’s spice bowl” for its superb terrain, which supports the growing of several spices. The most well-liked areas in the region for spice development are Idukki and Wayanad.

What are documents required for starting a powdered spices business in India?

Mentioned here is the list of all the documents that you will need to start a
• Incorporation certificate
• Certificate of registration and membership from the spice board
• MSME registration
• Goods and service tax registration
• Company PAN Card.
• Trademark/copyright registration
• BIS certification

References

  1. https://lddashboard.legislative.gov.in/actsofparliamentfromtheyear/spices-board-act-1986

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