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Spicing Up the World: India’s Role in the Global Chilli Trade
MAY 23 2025

Spicing Up the World: India’s Role in the Global Chilli Trade

Spicing Up the World: India’s Role in the Global Chilli Trade

Chillies are more than just a kitchen staple—they’re a global commodity powering billion-dollar trade flows. India, the largest producer and exporter of chillies, plays a critical role in shaping international market trends. As demand continues to rise worldwide, understanding the dynamics of both the Indian and international chilli markets is vital for stakeholders across the supply chain.

India: The Backbone of the Global Chilli Trade

India accounts for nearly 40% of global chilli production and is the largest exporter of dried red chillies. The major chilli-producing states include:

  • Andhra Pradesh (Guntur)
  • Karnataka (Byadgi chillies)
  • Telangana 3
  • Madhya Pradesh

Key Indian Chilli Varieties in Trade:

  • Guntur Sannam (S4): Bold in colour and heat, with high capsaicin content.
  • Byadgi: Rich red colour and low pungency, widely used in spice mixes and oleoresin extraction.
  • Teja: One of the hottest varieties, in high demand internationally.

Indian Market Trends:

  • Strong export demand from countries like China, Vietnam, Bangladesh, USA, and Malaysia.
  • Rising domestic consumption driven by the processed food industry.
  • Increased interest in stemless chillies and value-added forms like chilli powder and oleoresin.
  • Fluctuating prices due to unpredictable weather, pest issues, and changes in Minimum Support Prices (MSP).

Production Statistics of Chilli in India

India had 8.09 lakh hectares of Chilli cultivation during 2023-24, with an estimated production of about 29.13 lakh tonnes and an average productivity of 3273 kg/ha. Among the states, Andhra Pradesh tops the list in Chilli production with 14.44 lakh tonnes (49.57%), cultivated on 2.47 lakh hectares (27.75%) with a productivity of 5846 kg/ha, followed by Telangana, Madhya Pradesh, Karnataka, and West Bengal. Major Chilli grown in India are Jwala, Teja, Bhoot Jolokia, Dhani and Bhavnagri.

 

Dry Chilli Production in India

Dry-Chilli-Production-in-India

State Production in 2024
Andhra Pradesh 1,185.27
Telangana 654.27
Madhya Pradesh 293.33
Karnataka 181
Orissa 89
Others 157.68

Source Link : https://www.statista.com/statistics/870940/chili-production-by-state-india/

 

International Chilli Markets: Who’s Buying and Why?

Major Importing Countries:

  • China: Bulk buyer of Indian Teja and Sannam chillies for processing.
  • USA & EU: Prefer hygienically dried, low-pesticide, stemless chillies.
  • Thailand & Vietnam: Act as processing hubs and re-exporters.
  • Middle East & Africa: Growing markets due to increasing taste for spicy foods.
 

Key Global Trends:

  • Organic and residue-free chillies are gaining preference in developed markets.
  • Rising demand for chilli extracts, flakes, and powders in convenience foods.
  • Climate change is impacting production in traditional growing countries like China and Mexico, pushing buyers towards Indian suppliers.
  • Supply chain diversification is leading buyers to explore alternative sources like Ethiopia, Myanmar, and Peru.

Top Importing Countries of Indian Red Dry Chillies 2023–2024

Top-Importing-Countries-of-Indian-Red-Dry-Chillies-2023–2024

Country Import Volume (Tonnes)
China 1,79,000
Bangladesh 90,570
Thailand 59,838
USA 36,413

Challenges Faced in Both Markets

In India:

  • Post-harvest losses and drying inefficiencies.
  • Price volatility.
  • Residue issues leading to rejections in exports, especially to the EU.
  • Lack of standardized grading and processing infrastructure.

Globally:

  • Trade barriers due to phytosanitary regulations.
  • Dependence on fewer supplier countries.
  • Logistics disruptions (e.g., Red Sea crisis, container shortages).
  • Need for traceability and certification for organic or food-safe products.

Domestic vs Export Volumes (2021–2024)

domestic-vs-export-volumes-20212024

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