Kochi: The Union government has opened up the spice products industry to large businesses as it aims to develop the country as a global spice processing hub.
The ground and processed spices industry has until now been reserved for small businesses with investment capped at Rs5 crore. The industry also received incentives such as a five-year tax holiday and cheaper power tariffs.
With the recent change in policy, larger companies investing more than Rs5 crore will also be able to avail of these incentives.
New units with large infrastructure and innovation ability would help advance the country’s ambition to be an international spice-processing hub, said S. Kannan, director of the Spices Board, a trade body. “The new order should see big investments come in for the expansion of the processing sector,” Kannan said.
India, with a 50% share in the global spice trade of $2 billion (Rs9,900 crore), has capacity for cleaning, grinding and sterilizing about 7,000 tonnes of spices per day. Sushma Srikandath, director and chief operating officer of spice exporting firm AVT McCormick Ingredients Pvt. Ltd, a 50:50 joint venture between the US-based processed foods company McCormick and Co. Inc. and Kochi-based AV Thomas Group, said India has to start exporting value-added spices such as powders and pastes to be competitive in the international market.Several companies including AVT McCormick have already started spice processing operations even without the benefits that were till now reserved for the small-scale sector. Value-added spices, except spice oils and mint products, command about 25% of India’s total spice exports of around $1 billion.
Navas Meeran, director of Eastern Condiments Pvt. Ltd, which makes spice powders and curry masalas, said that given the local processing capacity, many international spice companies would be willing to invest in India.