KOCHI: From Vasco da Gama’s landing in Calicut in 1498 to the Dutch and the British setting up forts and factories along its coast, Kerala’s spices once lured the world. But today, the state’s spice capital, Kochi, home to four of the world’s largest value-added spice extractors, is staring at an uncertain future as the United States slaps a punitive 50% tariff on Indian spice exports beginning August 27.
The blow is significant. Synthite Industries, Plant Lipids, Mane Kancor and Akay Group – all headquartered in and around Kochi – together command about 70% of the global market for spice oleoresins and natural extracts. Their customers include the world’s biggest FMCG, food & beverage, nutraceutical and flavour & fragrance brands. Together, they turn Indian spices into billion-dollar exports.
But there is a twist. Despite Kerala’s historical legacy as the land of pepper, nutmeg and cardamom, these companies no longer depend on local farms. Instead, their tankers bring in raw materials from Vietnam, Indonesia, Sri Lanka and even Guatemala, process them in high-tech factories in Kerala, and re-export them to the world.
“Our production is grossly insufficient for internal consumption,” admits Viju Jacob, executive chairman of Synthite Industries, which alone clocks nearly $500 million in revenues. “We are importing pepper from Vietnam, Indonesia and Sri Lanka, adding value, and then exporting it. Except cardamom and nutmeg, almost everything else comes from outside.” That model is now at risk.
Tariff Trouble
For companies that run on wafer-thin margins – with raw materials forming nearly 75% of their costs – the 50% US duty could be a deal-breaker.
“Even if you say it’s the US consumer who will bear the burden, your competitive advantage is gone,” warns Geemon Korah, CEO of Mane Kancor. “If we sell at $10 today, with tariffs it becomes $15. The consumer will buy the same product from another source at $12. Customers have already asked us to hold back shipments until there is clarity.”
India has built itself into the world’s processing hub for spices, thanks to Kochi’s expertise, ecosystem and manpower. But with tariffs tilting the playing field, other producing nations may leapfrog. “If raw materials are anyway coming from Vietnam or Indonesia, why wouldn’t companies simply set up factories there?” asks Korah.
That is exactly what the Kerala majors are now considering – moving parts of their operations abroad. “We cannot put all our eggs in one basket,” Korah says. “This has been a wake-up call. We have to look beyond India.”
Losing Ground at Home
Even without tariffs, Kerala has been losing its edge. Pepper, once branded black gold, is now cultivated more in Karnataka than in Kerala, where rising labour costs have crippled production. Vietnam, producing five times more pepper than India, has become the world’s supplier.
“Indian pepper is flavourful, but Vietnam sells at $2,000 a tonne cheaper,” says veteran exporter Kishor Shamji. “Domestic demand is over 100,000 tonnes, but India produces only 75,000 tonnes. The gap is filled with imports – some even from Sri Lanka and Myanmar.”
That irony stings: the very land that drew conquerors for its spices is now importing them to sustain its global spice trade.
Global Giants, Local Roots
The Kerala cluster remains formidable. Synthite controls about 40% of the global oleoresin market, Plant Lipids 20%, Mane Kancor 20%, and Akay about 5%. Together, they have put Kochi on the world map of food ingredients.
Multinationals have taken note. French flavour giant Mane acquired Kochi’s Kancor in 2016. Danish natural colour major Oterra bought Akay in 2022. The sector is deeply integrated with global supply chains, and the US – still 30% of the market – cannot be wished away.
“It is very easy to say, ‘go find other markets’,” Korah says. “But the US is the largest consumer economy in the world, ten times India’s. No industry can afford to ignore it.”
What Next?
For now, exporters are holding back consignments, waiting to see if Washington blinks. “We hope the US is just flexing muscles and will roll tariffs back once the standoff ends,” another big exporter told TNIE.
But behind the bravado is worry. These Kochi-based firms, which turned Kerala into the Silicon Valley of spice extraction, may now be forced to spread their factories across Vietnam, Indonesia and Africa. For a state that once ruled the global spice trade, the shift is both poetic and painful. Kerala may have given the world its first taste of pepper, but in the 21st century, the world’s pepper may no longer need Kerala.
Kerala’s Spice Extract Giants: Quick Facts
Global Market Share (Oleoresins & Natural Extracts)
Synthite Industries
(Kolenchery): 40%
Plant Lipids
(Kolenchery): 20%
Mane Kancor
(Angamaly): 20%
Akay Group (Kochi): 5%
Together:
~70% of global market
Raw Material Dependence
Imports: Pepper, chilli, turmeric, coriander from Vietnam, Indonesia, Sri Lanka, Myanmar
Domestic: Mainly
cardamom & nutmeg
The Tariff Shock
US share of market:
~30% (down from
50% a decade ago)