Role And Significance Of Spices In Indian Economy: An Empirical Study

Horticulture occupies a very important place in India and horticultural crops play a unique role in India’s economy. India, with diverse soil and climate comprising several agro-ecological regions provide ample opportunity to grow a variety of horticulture crops. These crops contributed a significant part of total agricultural produce in the country comprising of fruits, vegetables, root and tuber crops, flowers, ornamental plants, medicinal and aromatic plants, spices, condiments, plantation crops and mushroom. Cultivation of these crops is labour intensive thus, generating a lot of employment opportunities for the rural population. (Datta,2013).

India is the seventh largest country in the world with a total geographical area of 328.73 M ha and has second largest population of 121 crores (2011), after China. Around 60 percent of the total population depends on agriculture and allied activities.

India is a predominant player in global spices trade. It is the major producer, consumer and exporter of spices in the world. Out of the 109 different spices listed by International Organisation for standardization (ISO), 75 different varieties of spices are grown in India because of varied agro-climatic conditions and soil types. India produces more than 100 Lakh MT of spices, of which, about 15.78 Lakh MT (15%) is exported to more than 180 countries. Despite the COVID Pandemic, spices export from India continued its upward trend during 2020-21, attaining an all-time high of US $ 4.0 billion mark for the first time in the history of spices export. During 2021-22, the export of spices/spice products from India was 15,31,154 tons valued `30,576 crore (4102.29 million US$) (Ministry of Commerce and Industry, Government of India, Spice Board, India,2023).

Production of Spices in India:

Indian spices have a global presence with a considerable share in the world market. Indian spices are valued globally, for their exquisite aroma, texture, taste and medicinal value. The varying climatic conditions in India provide ample scope for the cultivation of a variety of spices. Almost all Indian states produce spices, with the total area under spice cultivation being 3.21 million hectares with the passage of time, the Indian spices have evolved and matured as a technology based, quality-conscious, customer-centric and market-driven industry. India is the world’s largest producer, consumer and exporter of spices and the country produces about 75 of the 109 varieties listed by the International Organization for standardization (ISO) and also accounts for half of the global trading in spices. (Spice Board of India,2014).

Table1: PRODUCTION OF SPICES IN INDIA (Production in Tons)

Source: State Agri/Horti Departments/DASD Kozhikkode

Table 1 shows the production of spices in India for 2011-12 and 2021-22. The highest share of spices production for the year 2011-12 is chilli with a percentage of 23.781, next is dry turmeric with a percentage of 22.291 and third highest is ginger(fresh) with 15.180 percent. For the year 2021-22, the highest is garlic with a share of 30.391 per cent, second is ginger (fresh) with 19.665 per cent and third is chilli with 17.304 per cent.

Table 2: Item-wise export of spices from India (Quantity: tonnes, Value: Rs in Lakhs)

1. Include Ajwan seed, Dill seed, Poppy seed, Aniseed, Mustard etc.
2. Include Asafoetida, Cinnamon, Cassia, Cambodege, Saffron, Vanilla, Spices(NES) etc.
3. Include menthol, menthol crystals and mint oils.

Source: Spices Statistics at a Glance 2021, Directorate of Arecanut and Spices Development

The export for the different spices during the year 2016 to 2020 was 58,49,500 tonnes in quantity and Rupees 1,04,55,421 lakhs in values. It can be seen from the table 2 that the three spices namely turmeric, ginger and chilli have a large share in the export of spices from India. As India is the largest producer, consumer and exporter of chilli, the table 13 depicted that during the year 2016 to 2020, 24,10,150 tonnes with a value of Rupees 29,87,842(in lakhs) were exported. In the case of turmeric 6,78,050 tonnes with a value of Rupees 6,65,726( in lakhs) were exported and for ginger 2,51,815 tonnes with a value of Rupees 1,95,484(in lakhs) were also exported.   

For the year 2020-21, chilli secured first position among the spices exported with a share of 38.43%. Cumin ranked second with a share of 19.10%, followed by turmeric (11.69%). The fourth position is obtained by ginger with a share of 8.03%. Comparing the year 2016 and 2020, these spices have registered an increase, chilli(50.28% in volume,66.24% in value), ginger(403% in volume,194.35% in value),turmeric(53.54% in volume,35% in value), cumin(151.26% in volume and 116.64% in value), cardamom(small)(68.83% in volume,162% in value), cardamom(large)(69.87% in volume,10.43% in value),coriander(88.11% in volume,67.70%),celery(22.4% in value,59.8% in value), fenugreek(10.43% in volume,34.82%), other seeds( 169.61% in volume, 94.15% in value),other spices(9.42% in volume,40.21% in value), curry powder and paste(34.91% in volume and 48.79% in value), mint products(22.86% in volume,45.13% in value) and spice oils and oleoresins(35.95% in volume,34.67% in value). The following spices have shown a decrease, pepper (7.38% in volume, 52.37% in value), fennel (22.45 in volume, 59.8% in value), garlic (44.25% in volume, 49.10% in value) and nutmeg and mace (23.57% in volume,19.65% in value).

It is interesting to know that during 2020-21, the export of spices reached an all-time high both in terms of value and volume by registering a growth of 17% in value and 30% in volume. India produces about 75 of the 109 varieties listed by the International Organization for Standardization (ISO). The most produced and exported spices are pepper, cardamom, chilli, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, garlic, nugmeg & mace, curry powder, spice oils and oleoresins. Out of these spices, chilli, cumin, turmeric, ginger and coriander make up about 76% of the total production.

Table 3: Major-country-wise export of spices from India 2014-15 to 2019-20 (Quantity:tonnes, Value: Rs in Lakhs)

Source: Spices Statistics at a Glance 2021, Directorate of Arecanut and Spices Development

India is one of the world’s largest, consumer and exporter of spices, and it exported spices and spice products to 180 destinations worldwide in 2019-20. The top destinations among them were China, U.S.A, Bangladesh, U.A.E, Thailand, Sri Lanka, Malaysia, U.K, Indonesia and Germany. These ten destinations made up of more than 78 per cent of the total export earnings in 2019-20. As shown in the table 3 that, spices worth Rs.5,15,323 lakhs were exported to China in 2091-20 whish constituted 33.64% of the overall value exported. During the same year U.S.A imported Rs 3,35,127 lakhs (21.31%), while Bangladesh imported Rs.1,17,703 lakhs (7.83%). Spices worth Rs.1,07,833 and Rs.1,07,813 were exported to U.A.E and Thailand consisting of 7.18% and 7.17%.

 Objective:

To study the role and significance of spices in Indian economy

Role and significance of Spices in Indian economy:

India is usually referred as ‘spice bowl of the world’ owing to the cultivation of 75 varieties of spices out of 109 shortlisted by International Organization for Standardization(ISO) and it is also for her production of different variety and superior quality spices India has highest number of spice varieties in the world (Ralte and Ekhe,2022;Anantha and Sidana,2019).This is due  to the varying climatic conditions in India which provide ample scope for the cultivation of a variety of spices.  Indian spices are the most sought-after globally, given their exquisite aroma, texture, flavour and medicinal value. India has the largest domestic market for the spices of the world (Palani,2019). Over the years, the Indian spice community has evolved and matured as a technology-based, quality-conscious, customer-centric, market-driven industry. With Karnataka and Kerala on the front foot, almost all Indian states produce spices, with a total area under spice cultivation being 3.21 million hectares (Spice Board of India, 2016). In financial year 2022, the area under cultivation of spices was estimated to be 4.49 million hectares across India.

According to Spices Board of India, in the year 2021-22, the country produced about 10.9 Mn MT of spices in 4.4 Mn Ha (adv. estimates) with average productivity of nearly 2.5 MT/Ha. Over the period (2010-11 to 2020-21), the production increased at a CAGR of about 7% from 5.35 Mn MT in 2010-11 to 11.04 Mn MT in 2020-215. The acreage has also increased at a CAGR of nearly 4% from 2.9 Mn Ha in 2010-11 to 4.5 Mn Ha in 2020-2(Spice Board of India, 2023). It is interesting to note that the glory of Indian spices prevails all over the world and that helps India holding a commanding position in the global spice trade. Indian spices can be found in abundance in the highlands, tropical rain forests, marshes, marshy woods, fertile valleys, and beautiful green plains. 

India is also named as ‘Home of Spices’ due to the fact that, it is the largest producer, consumer and exporter of spices in the world. Spices play an important role in augmenting farmers income and also export market (Papang et al.,2016). The term ‘spice and condiments’ apply to natural or vegetable products or mixtures that are used in whole or crushed form mainly for the taste, aroma, for colour of food or for tempering of foods and beverages such as soups and also for medicinal properties. Spices are a natural plant product that are utilized to enhance the taste, aroma and colour of food products. Spices refer to the dried part of a plant that contains volatile oils or aromatic flavors (Salma and Ramakrishnan,2017).

The most produced and exported spices are pepper, cardamom, chilli, ginger, turmeric, coriander, cumin, celery, fennel, fenugreek, garlic, nutmeg & mace, curry powder, spice oils and oleoresins. From the spices produced in India, chilli, cumin, turmeric, ginger and coriander make up about 76% of the total production (Spice Industry and Export in India,2022). Nearly all the states and union territories in India cultivate at least one of the spices due to the favourable climatic conditions prevailing in all the states and union territories (Rajanbabu et al.,2022). In terms of the value of the world trade, pepper, cardamom, ginger, turmeric, chilli, cinnamon, nutmeg/mace, cloves and vanilla are the most important spices crop from tropical regions and cumin, coriander, sesame seeds, mustard, sage, bay, oregano and mint are the spices crop from the non-tropical regions (FAO,2005). India is the largest exporter of spice and spice products. During the year 2020-21, the country exhibited an upward trend and exported spices worth US $4.18 which was a 34% increase from that of 2019-20. United States of America (USA) imports the highest quantity of spices in the world (Sharangi and Pandit, 2018) with a value of 1,701 thousand USD which contributes 16.35 per cent of world import value whereas India ranks third with a value of 596 thousand USD with a total share of only 5.73 per cent in the import value of the world (Yes Bank and IDH, 2018)

The word spice comes from the old French word espice (Dubey,2017). Spices can be in various forms, it can be in the form of fresh, prepared, dried or broken, it can also in the form of barks, leaves, buds, roots, seeds etc. that cause the smell, flavour, taste, sharpness in the food items apart from the seasoning aspect. Spices are distinguished from herbs, which are leaves, flowers or stems from plants used for flavouring or as a garnish (Dubey,2017). Spices can be said to be an integral to the Indian community as influences the Indian history. Spices is an important additive in all the Indian cuisines as it offers culinary value in exquisite aroma, texture and taste and spices also possess tremendous nutritive and therapeutic value (Dini,2019; Bower et al.,2016); Srinivasan,2014).

Spices have become very popular today not only because of its flavouring, colouring and preserving nature but also for its medicinal value. Active ingredient, anti-oxidant, functional foods, super-food are keywords in health and agriculture today (Wilson et al.,2013). According to Bagal et al., (2020), spices refer to such natural plants or vegetable products or mixtures in whole or ground form and as used for imparting flavour, aroma and pungency to and for seasoning of foods. Spices may be made up of various parts such as floral parts(clove), fruits (cardamom, chillies), berries (black pepper), seeds (cumin, coriander), rhizome (ginger, turmeric), roots (horse radish), leaves(tejpat), kernel(nutmegs), aril(mace), bark(cinnamons) and bulbs (garlic, onion) or any other part of spice plants.

Table 4: SPICE WISE AREA AND PRODUCTIION (Area in Hec, Production in Tons)

Source: State Agri/Horti Departments/DASD Kozhikkode

Spices play an important role in the economy of India as India is one of the largest producers of spices in the world. Spices production in the country grew from 67.64 lakh tonnes in 2014-15 to 106.79 lakh tonnes in 2020-21 with an annual growth rate 7.9%, following an increase in area from 32.24 lakh hectare to 45.28 lakh hectare. Among the major spices, Cumin (14.8%), Garlic (14.7%), Ginger (7.5%), Fennel (6.8%), Coriander (6.2%), fenugreek (5.8%), Red chilli (4.2%) and Turmeric (1.3 %), show significant growth rate in production (Spices Statistics at a glance 2021). Table no.4 shows the area and production of fifteen spices for 2011-12 and 2017-18 and advanced estimates of 2021-2022 in India. The three spices namely Chilli, turmeric and ginger ranked first, second and third among the fifteen spices produced during 2011-12. For the year 2017-18 and 2021-22, the highest production is for garlic and followed by chilli, ginger and turmeric.

Table 5: Area of Production of Spices in India

Adapted from Source: State Agri/Horti Departments/DASD Kozhikkode

During the past years, there has been a steady increase in area production of spices in India. The annual growth rate of area of production of spices in India is estimated to be 3.6%. As shown in the table 5, the total area under spices cultivation is 34.12 lakhs hectare in 2012 and 40.31 lakhs hectare in 2022 that is an increase of 6.19 percent. Madhya Pradesh, Telangana, Andhra Pradesh, Kerala, Karnataka, Tamil Nadu, Orissa and North Eastern States are important states for spices production.

Among the fifteen popular spices cultivated in India, an increase in the area of production can be seen from the eleven spices viz; coriander, garlic, cumin, turmeric(dry), pepper, fenugreek, ginger(fresh), cardamom(large), nutmeg, celery and clove. Coriander spice has registered the biggest increase with a large margin of 2,69,550 hectares followed by garlic with an increase of 2,29,367 hectares.

Table 6: Major state-wise area and production of spices in India (Area in Hectare, Production in Tons)

Source: State Agri/Horticulture Departments/DASD Kozhikkode

(*): 1^st advance estimate         F: FINAL