India’s spice exports registered a notable decline in the financial year 2025-26, with total earnings falling 6% to **$4.43 billion** from $4.72 billion in the previous year, primarily due to weak overseas demand for chilli and cumin .
Export volumes also dropped 4% to 17.34 lakh tonnes, down from 17.99 lakh tonnes in FY25 . In rupee terms, the decline was 2%, with earnings falling to ₹39,140 crore from ₹39,994 crore .
Chilli: The largest export hit
Chilli, which continues to be India’s largest spice export by both volume and value, suffered a 12% decline in value to $1.17 billion, down from $1.34 billion in FY25 . Export volumes fell 4% .
Industry sources attribute the decline to reduced off-take from key buyers China and Bangladesh, where weak economic conditions and sufficient domestic stocks curtailed import demand . The slowdown in Chinese demand particularly affected sentiment in major trading hubs, with exporters reporting that Chinese buyers remained largely inactive in the international market .
Cumin exports plummet
Cumin, India’s second-largest spice export, recorded a sharper contraction, with export value plunging 28% year-on-year to $524.22 million . Export volumes fell 14% to 1.96 lakh tonnes from 2.29 lakh tonnes .
The Gulf crisis emerged as a major bearish factor for cumin markets during the year. The Iran-Israel-USA conflict triggered volatility in crude oil prices and shipping movement, resulting in higher freight rates, war-risk premiums, and marine insurance costs for Gulf-bound cargoes . Exporters reported freight costs to West Asia increased by 15-25% during peak escalation periods.
UAE imports of Indian cumin during January-March 2026 declined nearly 45% to 8,735 tonnes from 8,735 tonnes a year earlier, while Saudi Arabia’s imports dropped to 539 tonnes from 1,132 tonnes .
China also turned away from Indian cumin. One exporter source noted that China had sufficient domestic cumin production this season, reducing immediate import dependence on India .
Spices that held steady
Despite headwinds in key categories, several spice segments demonstrated resilience. Turmeric maintained stable export demand, as did coriander . Spice oils and oleoresins, while down 1% to $528.73 million, continued to represent a significant portion of earnings .
Cardamom, pepper and tamarind registered growth during the fiscal year, partially offsetting the decline in other categories .
Exporters eye EU FTA as bright spot
Just months before the end of FY26, India and the European Union concluded a long-pending Free Trade Agreement (FTA) on January 27, 2026, which is expected to benefit the spice sector going forward .
Under the deal, Indian spice exports—including cumin, chilli, turmeric, ginger, coriander, pepper, and cardamom—will gain zero-duty entry into the EU market, eliminating tariffs that were previously up to 8% on several products . The EU typically accounts for around 20-25% of India’s spice export value .
Exporters note that around 11,000 tonnes of cumin are exported to the EU annually, and the removal of duties will improve competitiveness against producers such as Turkiye, Syria, China, and Egypt . However, compliance with stringent EU food safety and quality norms—including pesticide residue limits and traceability requirements—remains a critical challenge .
Market diversification and structural challenges
India retains its position as the world’s largest producer, consumer, and exporter of spices . However, industry analysts point to structural gaps that constrain export growth:
- Dominance of raw and semi-processed exports reduces margins and limits integration with high-value global supply chains
- Fragmented supply chains with over 80% of spice cultivation driven by smallholder farmers
- Quality consistency and traceability remain persistent challenges
The Federation of Indian Spice Stakeholders (FISS) has emphasized the need for enhanced engagement between Indian authorities and EU regulators under the FTA framework to address non-tariff barriers . Investments in quality assurance, certification, and branding for European markets may be key to long-term growth .
Outlook
Industry experts suggest that the next phase of growth in India’s spice exports will depend on a decisive shift toward value-added products such as spice blends, oleoresins, nutraceuticals, and branded retail packs . As global consumers increasingly prioritise sustainability and transparency, aligning with these trends could offer Indian exporters a competitive edge.
For now, exporters remain cautiously optimistic that the EU FTA will provide a much-needed boost, even as geopolitical risks and competition from other producing nations continue to cast uncertainty over the sector.
