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How to Start a Masala Business in India?

By Tata Capital
02 January 2026
10 mins read
2937

India is known worldwide as the land of spices. The innumerable spices in Indian cuisine have fascinated other cultures since time immemorial. India is also the world’s largest spice producer.

With a growing fondness for exotic Indian cuisines around the globe, the spices sector is set for a boom. If you are looking for a new business venture, you should take advantage of this boom and start a spices business.

However, starting a spices trading business is filled with its own set of challenges. Worry not; here is a step-by-step guide on how to start a spices business in India.

Conduct Market Research for Your Spices Business Idea

The spice business in India is highly competitive. So, first, you need to familiarise yourself with the spices market- what spices are popular in India and abroad, what customers look for, who your competitors are, what spices they focus on, and so on.

Further, you need to identify potential suppliers for your spices business idea. Suppliers that provide good-quality raw materials or spices at a reasonable market rate are essential to your business’s profitability and sustainability. After collecting all this information, you are ready for the next step: preparing a business plan.

Also, read – Best Business Ideas in India

Develop a Strong Business Plan for Spices Manufacturing

A business plan is the blueprint of your masala business. Follow these steps to create an objective-oriented business plan:

Step 1: Create an executive summary

The executive summary of your spice business will include a mission and vision statement. You also need to list all the products and services you plan to offer. Finally, elaborate on your potential business structure, such as leadership roles, employees, etc.

Step 2: Prepare a business description

In the business description, you must elaborate on the market segment you plan to target. Your market research will provide relevant information on the potential market segments available to you. Don’t forget to include your competitors and how your masala business aims to establish its place in the market.

Step 3: Provide short and long-term financial projections

Once you have a business description, you must work out the expected short and long-term financial projections for your spices business idea. These financial projections will give you an accurate estimate of the funding required for your business. Here, you can get help from experienced finance professionals if needed.

Step 4: Decide on marketing and sales strategy

A marketing and sales strategy is a must in the modern marketplace. A solid marketing strategy can significantly increase the visibility of your spice business. Hence, preparing a marketing strategy at the outset of the business is essential. Don’t forget to factor the cost of the marketing and sales strategy into your financial projections. This will also include the cost of hiring a marketing or advertising agency if required.

Also, read – Manufacturing Business Ideas for Entrepreneurs

Select the Ideal Location for Your Spices Business

As with any business, location is the key to success with a spices business idea. To choose a suitable location for your masala business, you need to consider the following, especially if you plan on producing spices on your own:

Climate: Certain spices grow well in specific climate conditions. Hence, if you plan on growing your own herbs, you need to base your operations on the spices you choose for your business and the favourable climate conditions for these spices.
Soil: A nutrient-rich soil is more suitable for growing good-quality spices. Hence, along with the climate, you should favour areas with good, nutrient-rich soil ideal for farming spices.
Water supply: Spices require a steady water supply for optimum growth. The ample availability of water will further constrain your choice of location.
Transport links: Accessible areas with good roads should be a priority, as you must transport your spices from the farm to the marketplace.

Alternatively, if you’re planning on opening your store, you will also need to decide on a suitable location based on accessibility and vicinity to the target customers.

Also, read – How to Start a Wholesale Business in India

Source High-Quality Raw Materials for Spices

If you’re not growing your spices, you must procure them from suitable vendors. Once procured, the spices must be ground into powder for packaging after thorough cleaning. You can choose from various grounding processes, such as stone grinding or modern grounding machinery.

Once ground, the spices are packed in plastic bags, metal tins, or glass bottles. Finally, labels with relevant information must be placed on the packages. Now, the spices are ready to be shipped.

Also, read – How to Start a Furniture Business in India

Build an Efficient Distribution Network

A distribution network is your business’s lifeline. Once the spices are packaged, they must be sent to various stores and warehouses. You need to set up an efficient distribution network to do this effectively.

You can achieve this in two ways:

Work with an experienced distributor in the spices industry. The distributor will already have an established network to sell your product.
If you decide to set up your distribution network, you must identify retailers and wholesalers and build relationships to get your product into the market. Although more challenging, this path will also be more rewarding in the long term.

Also, read – How to Start a Clothing Brand in India

Create a Compelling Branding and Packaging Strategy

Now, with all the infrastructure in place, you need to focus on developing a branding and packaging strategy to optimise your product’s visibility in the market.

Follow these steps to create an attractive brand and package:

Choose a brand name that is memorable and stands out.
Create a unique logo for your business to be placed on the spice packets.
Choose packaging colours that are eye-catching and more attractive.
Employ digital marketing techniques to market your product using social media, newspapers and other avenues to reach your target customers.

Government Support and Subsidies for Spices Business

The Indian government offers strong support to help masala businesses grow, especially in exports, marketing, and processing. These schemes reduce costs and encourage global expansion.

1. Indian Spices Board Support

The Spices Board of India supports spice exporters through training programs, quality testing, certification, and guidance on global standards. It also helps businesses improve product quality and explore export markets.

2. Subsidy for Sending Samples Abroad

Registered exporters with a Spice House Certificate or Brand Registration can receive financial support of up to Rs. 50,000 for sending spice samples to overseas buyers.

3. Marketing and Branding Assistance

Exporters can get up to 50% subsidy on promotional materials like brochures and videos. The maximum support is Rs. 2 lakh per promotional activity.

4. Export Promotion Incentives

Businesses can access interest-free loans covering up to 100% of listing and promotion costs in foreign markets. There is also 50% support for product development, capped at Rs. 2.5 crore per brand.

5. Processing Support in North-East India

Individual entrepreneurs receive 33% financial aid for processing units, up to Rs. 25 lakh. Farmer groups can get 50% support, capped at Rs. 35 lakh.

6. Support for Trade Fairs

Exporters receive 50% airfare reimbursement (up to Rs. 1.5 lakh per year) and 50% stall cost support, capped at Rs. 1 lakh.

Also, read – How to Start a Jewellery Business in India

Legal Requirements and Licenses for Spices Business in India

Starting a spices business in India requires following the food safety and business laws set by the government.

These include:

Trade License

A trade license is issued by the local municipal authority. It allows you to run your spices business legally from a specific location and confirms compliance with local rules.

MSME Registration

Registering as an MSME helps small spice businesses access government schemes, subsidies, easier loans, and financial support at both state and central levels.

Spices Board Registration

If you plan to export spices, registration with the Spices Board of India is compulsory. It confirms your eligibility to trade internationally and supports export promotion.

GST Registration

GST registration is required for tax collection and filing. It also helps your business work smoothly with suppliers, distributors, and large buyers.

FSSAI License

An FSSAI license ensures that your spices meet food safety and hygiene standards. It is mandatory for processing, packaging, and selling spices.

Importer–Exporter Code (IEC)

An IEC is required for importing or exporting spices. It is issued by the Directorate General of Foreign Trade.

Other State-Specific Licenses

Depending on your state, additional permits may be required.

Also, read – 5 Steps to Start a Transport Business in India

Funding Options for Your Spices Business with Tata Capital

Running a spices business often requires timely funding to manage daily operations and plan future growth. Tata Capital offers business loans that help spice traders, manufacturers, and exporters meet these needs without stress.

A business loan from Tata Capital is unsecured, which means you do not need to pledge any assets. You can use the funds to buy raw spices, upgrade machinery, expand production, manage cash flow, or invest in better packaging and branding.

Tata Capital offers loan amounts ranging from Rs. 1 lakh to Rs. 90 lakhs with flexible repayment tenure between 12 and 60 months. Plus, you get to enjoy minimal documentation, quick approval, and competitive interest rates.

Types of loans available for masala businesses:

Business loans for women entrepreneurs to scale operations
MSME and SME loans for small and growing spice enterprises
Working capital loans to handle everyday business expenses
Machinery loans to purchase or upgrade processing equipment

Understanding FSSAI Registration for Spices

FSSAI registration is mandatory for anyone involved in the spices business, as spices are food products. It ensures food safety, hygiene, and legal compliance.

There are three types of FSSAI registrations, based on business size:

1. Basic FSSAI Registration

This is meant for small spice businesses and startups with lower turnover. It is suitable for local sellers, small processors, or home-based units. As the business grows, this registration must be upgraded.

2. State FSSAI License

This applies to small and medium spice businesses operating within one state. It covers manufacturers, packers, wholesalers, distributors, and retailers. This license requires more details about the business, premises, and operations.

3. Central FSSAI License

This is required for large spice businesses, exporters, importers, and companies operating across states or through ports and airports. It involves stricter compliance and additional documentation.

Also, read – How to Start an Event Management Business in India

How to Apply for MSME Registration for Spices Business

MSME registration helps spice businesses access government schemes, loans, and subsidies. The application process is simple and fully online.

Here’s how it usually works:

Step 1: Share Basic Details

Start by sending your business details and required documents via email. This includes owner details and business information.

Step 2: Select a Service Package

Choose a suitable package based on your needs and complete the payment using the available online payment options.

Step 3: Application Review by Experts

Once the order is placed, your application is assigned to a dedicated professional who handles the process on your behalf.

Step 4: Aadhar and Mobile Number Verification

The professional checks whether your Aadhaar card is linked to an active mobile number, which is required for registration.

Step 5: Application Submission

After verification, the application is submitted on the official MSME portal with accurate details.

Step 6: Receive MSME Certificate

Once approved, your MSME registration certificate is sent to you via email.

FAQs

Is the spice business profitable in India?

India is a leading producer and exporter of spices, making it a profitable business opportunity. The spice business can be started on a small, medium, or large scale, depending on the investment capacity.

What license is required to sell spices in India?

FSSAI registration is mandatory for selling spices in India. The Food Safety and Standards Authority of India ensures that all food products, including spices, are safe for consumption.

How much does it cost to start a spice business?

Starting a spice business in India typically requires an initial investment ranging from Rs. 5 lakhs to Rs. 20 lakhs, depending on the scale of the business.

Which spice is sold most in India?

The most sold spices in India include pure spices like chilli, turmeric, coriander, bay leaf, clove, cardamom, cinnamon, and tulsi leaf.

What is the cost of a Spice Board license?

For new manufacturers, the Spice Board registration fee is Rs. 17,000 (Rs. 15,000 + 18% GST), while for new merchants, it is Rs. 11,800 (Rs. 10,000 + 18% GST).

What are the essential licenses required to start a spices trading business in India?

You need a trade license, FSSAI license, GST registration, MSME registration, and Spice Board registration. An IEC is required if you plan to export.

How can I get a subsidy for starting a spices trading business in India?

You can apply through the Spices Board and government schemes that support processing units, exports, marketing, and trade fairs, subject to eligibility and registration.

What is the average profit margin for a spices trading business in India?

Profit margins usually range between 20% and 40%, depending on spice type, sourcing costs, processing quality, branding, and whether you sell locally or export.

Which spices have the highest export potential from India?

Chilli, turmeric, cumin, pepper, cardamom, coriander, and spice blends have strong global demand and high export potential from India.

How does Tata Capital support entrepreneurs in the spices trading business?

Tata Capital offers unsecured business loans, working capital finance, and machinery loans with flexible repayment options to support growth and daily operations.

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