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Source-This post on Challanges in India’s Spice Exports has been created based on the article “Spice route: Tackle barriers faced by turmeric exports published in “Live Mint” on 17 July 2024.
UPSC Syllabus-GS Paper-3- Transport and Marketing of Agricultural Produce and Issues and Related Constraints
Context- India, known as the “Spice Bowl of the World,” has seen spice exports triple from 575,000 metric tonnes in 2010-11 to 1.54 million MT by 2023-24. Turmeric is a key export, with 324,000 hectares cultivated, producing 1.16 million tonnes in 2022-23, which is 75% of global supply.
In 2022-23, India exported over 154,000 tonnes of turmeric worth $207.45 million, with projections to reach $1 billion by 2030. The US is the top importer, holding a 20% share, followed by Bangladesh, Iran, and the UAE.
What are the Challenges in the Spice Export Sector?
1) Demand-side Challenges: Demand for turmeric is declining in developed countries like the Netherlands and Germany as they increasingly meet their needs domestically. As a result, these countries are becoming major exporters of turmeric within the EU.
2) Supply-side Challenges:
A) There is growing competition from smaller countries like Fiji, which was the fourth-largest turmeric exporter in 2022-23, as well as from Myanmar, Vietnam, and Indonesia.
B) The share of turmeric in total spice production dropped from 11% to 8.3% between 2021-22 and 2022-23, while its share in the total cultivation area decreased from 7.6% to 6.3%.
3) Quality Control Issues:
A) Indian spices face rejections in key markets due to phytosanitary issues, such as toxins, high maximum residue limits (MRL), and adulteration. For example, Singapore and Hong Kong recently banned some Indian spice mixes.
B) Issues persist despite the presence of quality control bodies like the Spices Board of India and Agricultural and Processed Food Products Export Development Authority.
A detailed article on India’s Spice Exports – Significance and Challenges can be read here.
What should be the way forward?
1) Supply Chain Evaluation: There is a need to conduct a thorough assessment of the spice supply chain to identify quality gaps and reduce rejections.
2) Regulatory Reforms: There is a need to create a single regulatory body with the authority to monitor and ensure high-quality laboratory testing and product traceability before exports.
3) Compliance and Standards: Encourage exporters and supply chain partners to follow Good Agricultural Practices and adhere to standards set by the International Organization for Standardization and Hazard Analysis and Critical Control Points.
4) Stakeholder Coordination:
A) Key stakeholders like policymakers, traders, corporations, and processors need to collaborate on a common platform.
B) Utilize events like the World Spice Congress and Global Turmeric Conference for knowledge sharing and capacity building.
5) International Agreements
A) Focus on signing mutual recognition agreements (MRAs) for harmonization of spice standards. For ex- the recent MRA for organic products signed between India and Taiwan in 2024 is an example of this approach
B) Engage in discussions for trade facilitation and push for harmonized testing and certification standards in trade agreements.
Question for practice
What are the Challenges in the Spice Export Sector? What should be the way forward?
