Home ／ Insights on entering the Indian market
2026.03.26
Kerala is called the "Spice Garden of India" and is a major production area for key spices such as black pepper, cardamom, cinnamon, cloves, and nutmeg. About a third of India's total black pepper production, about three-quarters of its cardamom, and all of its nutmeg are produced in Kerala. Its central city, Kochi (formerly Cochin), is a port city that has developed since ancient times as an international hub of the spice trade, where Arab merchants and European traders once gathered.
India's spice exports in FY2025-26 came to 17.34 lakh tonnes (about 1.73 million tonnes) by volume and $4,430.90 million by value. This is a pause from the peak of the previous fiscal year (17.99 lakh tonnes, $4,722.65 million), down 4% in volume and 6% in dollar value. Export volume grew 88% from FY2013-14 to FY2024-25, and the spice industry plays a core role in India's food exports. For Japanese food companies, Kochi, a nexus in this spice supply chain, could serve as a strategic base for accessing the value chain from raw material sourcing through processing and export.
Kochi's Mattancherry district is a globally renowned spice collection hub with a history of spice trading spanning centuries. Ginger, cloves, cardamom, turmeric, and pepper are traded here daily, with sorting, drying, and packing work carried out on site. Cochin Port is a major shipping port for India's spice exports, functioning as a key node in the global spice supply chain.
Kochi's spice processors and exporters set prices based on quality assessment, certification compliance, and export demand, giving them major influence over the prices producers receive. As shown by the fact that the International Spice Conference is scheduled to be held in Kochi in 2026, Kochi maintains its position as an important decision-making hub for the global spice industry.
The global black pepper market faces a structural supply shortage. Against global production of about 434,000 tonnes, consumption stands at about 460,000 tonnes, with demand continuing to outstrip supply. Since 2023, this supply gap has pushed prices up roughly twofold. This upward price trend benefits Kerala's pepper farmers and processors, but is a cost-increasing factor for Japanese food makers as an importing country.
A strategic option for Japanese companies is to sign long-term contracts with spice processors based in Kochi to hedge against price volatility risk. Building direct sourcing relationships is recommended to ensure consistent quality control while putting in place a system that protects the company from market price fluctuations.
Cardamom, also called "Green Gold," is one of the world's most expensive spices. High-quality small cardamom from India trades at about $33 per kilogram in the auction market, a roughly twofold premium over bulk product. India's domestic consumption of cardamom and nutmeg is estimated at about 50,000 tonnes a year, with about 90% of production consumed domestically.
Major export destinations are centered on Middle Eastern countries such as the UAE (more than a third of India's cardamom exports), Saudi Arabia, and Kuwait. In the Japanese market, cardamom is still a niche spice, but demand is steadily increasing as curry specialty restaurants and spice cuisine grow in popularity. Direct sourcing of cardamom for Japan via Kochi offers benefits in both quality and price.
The Kerala state government is actively working to develop the food processing industry, and the state has in place 5 state-of-the-art food processing parks, 2 mega food parks, 14 food production clusters, and 10 mini food parks. These facilities provide an integrated processing framework from primary spice processing (washing, drying, sorting) through advanced processing (grinding, blending, packaging), functioning as manufacturing bases for high-value-added spice products.
When Japanese companies develop a food processing business in Kerala, using these food parks directly translates into lower initial investment and more efficient regulatory compliance. Mega food parks in particular are equipped with shared cold storage, quality testing labs, and logistics facilities, providing highly effective infrastructure for small and medium-sized entrants.
Kochi also occupies an important position as a food distribution hub for South India. Kerala accounts for about 20% of India's total food exports and also boasts one of the country's largest production scales for coffee, cocoa, and tea. From Kochi, Bengaluru (about 550 km) and to Chennai (about 700 km), access is secured, allowing it to function as the starting point for a distribution network covering four South Indian states (Kerala, Karnataka, Tamil Nadu, and Telangana).
South India's food culture differs greatly from North India's, forming its own distinctive flavor system built heavily around coconut, curry leaves, tamarind, and black pepper. For Japanese companies entering the South Indian market, understanding this region's distinctive palate, together with localization is essential.
In the global spice market, demand for "premium spices" backed by organic certification, proof of origin, and traceability is expanding rapidly. There are also indications that Kerala urgently needs to shift toward premium spice exports, and moving from conventional bulk exports to branded, high-value-added products has become an industry challenge.
This "premiumization" trend is a major opportunity for Japanese companies. Japan's food industry has quality control technology, packaging aesthetics, and brand storytelling capability, all elements that can contribute to adding value to Kerala-grown spices. For example, a business model that sorts and processes organic Kerala black pepper to Japanese quality standards and markets it as a "single-origin" premium spice in Japan and global markets is expected to have ample commercial viability.
Many of the spices used by Japanese food makers, such as black pepper, turmeric, and cinnamon, are grown in India. Setting up a sourcing base in Kochi eliminates intermediaries, making it possible to optimize on both quality and price. FSSAI Partnering with processing facilities that meet Japan's quality standards translates directly into securing raw materials that satisfy Japanese food safety standards.
An effective approach is to jointly develop spice blend products for the Japanese and Indian markets together with Kerala's spice processors. Compounding and processing in Kochi the spice mixes used in Japanese curry roux or ramen soup bases can simultaneously cut manufacturing costs and stabilize quality.
This is a business model that processes Kerala-grown spices to Japanese quality standards and exports them as a premium brand to Japan and East Asian markets. Single-origin spices with organic certification in particular are a category that attracts strong interest among Japanese consumers.
Developing health foods and supplements that make use of functional compounds found in Kerala-grown spices, such as curcumin in turmeric, gingerol in ginger, and cinnamaldehyde in cinnamon, is an area where Japanese companies can leverage their strengths. Products that fuse the knowledge of Ayurveda, India's traditional medicine, with Japan's functional food technology India can be differentiated in the domestic market as well as in the Japanese and global markets.
A technology-transfer business that provides Japanese food processing technology, particularly drying technology, freeze-drying technology, and quality inspection technology, to Kerala's spice processors is also promising. Combining Kerala's food park infrastructure with Japan's processing technology can build a win-win business structure for both sides.
When developing a spice-related business in Kerala, compliance with the regulations and certification system of the Spices Board (Spices Board India) is required. Exporting spices requires registration with the Spices Board, and compliance with quality standards, pesticide residue standards, and heavy metal content standards is mandatory. FSSAI In addition to certification, international certifications such as HACCP, ISO 22000, and organic certification (India Organic/NPOP) are also important for exports.
Reasons businesses fail in India The slow response to regulation often pointed to as a common failure pattern applies equally to the spice industry. It is necessary to understand regulatory requirements in advance and build a collaborative framework with local legal and certification consultants.
India's spice industry is expected to keep growing sustainably going forward, riding the tailwind of the global Health consciousness is riding the trend and should keep growing steadily. The global spice and seasoning market is projected to reach $28-48 billion by 2033 (the range reflects the different scopes research firms use). New product mixes, sustainable sourcing, and rising demand for functional spices are driving that growth.
The International Spice Conference, to be held in Kochi in 2026, will be an important venue for business talks connecting global spice buyers with Kerala's producers and processors. For Japanese companies, participating in this conference is an excellent opportunity to build a network with Kerala's spice industry. Strategic participation in the spice supply chain starting from Kochi will India Market contribute greatly to strengthening the competitiveness of a food business in that broader market.
It is a port city in the South Indian state of Kerala, and a long-standing spice trading hub. Known as the "Spice Garden," a collection center for black pepper, cardamom, and other spices, it is a market that serves as the starting point for raw material sourcing and exports.
Because they can source spice raw materials directly, close to the production area, making it easier to manage quality and traceability. It also serves as a starting point for food distribution across all of South India, and business opportunities are expanding in the increasingly premium spice market.
A wide range of areas can be considered, from raw materials through to finished products: building a direct sourcing base for spice raw materials, jointly developing spice blends and seasonings, exporting value-added spice products, developing health and functional spice products, and technology transfer or joint ventures in food processing technology.
The basic approach is to use Kochi as a base for raw material sourcing, export, and processing. It is efficient to divide roles with Chennai and Bengaluru and other major South Indian cities for full-scale rollout as a consumer market.
In addition to complying with food regulations such as FSSAI, managing quality, pesticide residue, and traceability is important for spices. Since items like black pepper are also subject to price volatility from supply shortages, a contract and inventory strategy that factors in sourcing risk is required.
It is sound practice to first decide which raw materials or products you want to source or handle, and start by looking for partners among local producers, processors, and exporters. Confirm quality standards and regulatory compliance, then start with small transactions and expand the relationship from there.
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