While one section of the Indian industry argues that India will face tough competitions in the days to come and find itself overtaken, another section feels that China is way behind in technology. "India can leverage the Chinese presence to get cheaper intermediate products, which can be re-processed to add value. At present Chinese made oleoresins are raw and not made to international food standards," VJ Kurian, chairman of the Spices Board, told FE. Indian oleoresin makers are already utilising the oleoresins made in China to make products that are more advanced. Reports suggest that India imported around 400-450 tonne of crude oleoresins from China during 2008-09.
Oleoresins are suitable and highly flexible for the new trends in the food processing industry. It provides competitive advantages, is economical and has great flexibility in formulating new products. Spice oleoresins are largely used by the food processing industry. India is capable of manufacturing oleoresins and natural oil extractions from almost 42 different spice products. They are obtained by solvent extraction. These isolates serve as convenient and hygienic substitutes for raw spices in food products. Chilli and pepper oleoresins contributed around 80% of India's oleoresin export of 6,850 tonne in 2008-09, according to Spices Board data. Turmeric, ginger, cardamom and others contributed the rest.
China produces mainly chilli oleoresins from the paprika variety, while India has the advantage of expertise in the whole range of spices. "China is known to farm only a limited variety of spices while India enjoys dominance in a whole lot of spices," VJ Kurian said. He believes that Indian companies can scale up to derive benefits from its domain expertise. Indian spice processors needed to scale up capability and quality standards to meet the challenge posed by China, sources added.
Some trade experts see Indian companies shifting base to China to escape from the stringent pollution standards enforced by the Indian authorities. "Multinational processors turned to Indian in the 80s when the grinding industries faced actions in the developed world due to the pollution problems. An Indian company has recently shifted its marigold color extraction plant from Tamil Nadu to China when authorities objected to the pollution," a leading spice exporter told FE.
The state-run Spices Board is keenly watching the developments in China and studying the implications and advantages they offer to the Indian industry, board sources said.