§1What this business is
Dried red chillies are cleaned, dried further if needed, ground in an impact pulveriser and packed. Dried chilli is the only raw material. India is the world's largest producer, consumer and exporter of spices, and the Spices Board registers exporters and certifies quality. The report sizes the unit at 500 kg a day on a 10-hour shift.
Capacity: 500 kg a day on a 10-hour shift; the report runs at 40% in year 1.
§2Is it right for you?
Who it is for
Someone in or near a chilli-growing belt with links to kirana shops, hotels and wholesalers.
Who it is not for
Someone who cannot control quality — food-safety lapses in spices are taken seriously.
Advantages
- Chilli powder is used in every Indian kitchen
- One raw material and a short process
- Low machinery cost (₹7.20 L)
- Export route through the Spices Board
Drawbacks
- Thin margin in the report (4% in year 1)
- Chilli prices swing with the crop
- Adulteration scandals hurt trust in small brands
- Branded spice companies dominate retail
Skills you need
- Buying and grading chillies
- Grinding without overheating
- Food-safety testing and labelling
- Selling to retailers and bulk buyers
Why difficulty 2/5: Simple process; buying well and keeping quality steady are the real work.
§3Market
Who buys
- Households
- Hotels, restaurants and caterers
- Food processors and masala makers
- Exporters
How it sells
- Kirana shops through distributors
- Wholesale spice markets
- Bulk supply to food businesses
- Export through registered exporters
Good to know
- The report cites spice exports of 1.13 billion kg worth US$ 3.32 billion in 2018-19.
- It notes India produces about 75 of the 109 spice varieties listed by ISO.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Impact pulveriser without sieve | 1 | ₹3,00,000 |
| Packaging machine | 1 | ₹1,80,000 |
| Material handling and other equipment (bins, trolley, weighing machine, kitchen tools) | 1 lot | ₹2,40,000 |
From: PMEGP sample project report — Red Chilli Powder Unit (prepared by Udyami/Samadhan)
- Dried red chillithe only raw material; ₹39.00 L of chillies in year 1 of the report
- Packing materialpouches and cartons for retail and bulk packs
From: PMEGP sample project report — Red Chilli Powder Unit (prepared by Udyami/Samadhan)
Suppliers in Building Business Bazaar
Spices Board Quality Evaluation Laboratory, Kochi · Kochi →Spices Board Quality Evaluation Laboratory, Mumbai · Navi Mumbai →Spices Board Quality Evaluation Laboratory, Guntur · Guntur →Spices Board Quality Evaluation Laboratory, Tuticorin · Thoothukudi →Spices Board Quality Evaluation Laboratory, Narela (Delhi) · Narela →Spices Board Quality Evaluation Laboratory, Chennai · Gummidipoondi →Spices Board Quality Evaluation Laboratory, Kandla · Gandhidham →Spices Board Quality Evaluation Laboratory, Kolkata · Baruipur →Spices Board Quality Evaluation Laboratory, Jodhpur · Jodhpur →
In our raw material database
§5Licences & registration
- FSSAI licence
- Udyam
- GST
- Legal Metrology registration for packed goods
- Spices Board registration (CRES) if you export
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- PMFMECentralUnclear35% subsidy, up to ₹10 lakh
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
The report was written for PMEGP; PMFME supports micro spice units; MUDRA and CGTMSE help with the loan.
§7Money
How the investment is worked out: Samadhan report: plant & machinery ₹7.20 L + furniture ₹1.00 L + working capital ₹5.68 L = ₹13.88 L; premises own or rented (not costed).
Working capital: Working capital ₹5.12 L in the bank demand (₹5.68 L in the project cost) for 15 days of chillies and 15 days of powder.
Year not printed on the sample report — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: Spices Board India
- Confirm the 8-digit ITC(HS) line with DGFT or your customs broker before shipping.
- You need an Import Export Code (IEC) from DGFT before the first shipment.
§9Risks — where people fail
- Crop failure or price spikes
- Moisture and fungus (aflatoxin) in stock
- Adulteration complaints
- Brand competition
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working red chilli powder unit unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (FSSAI licence, Udyam), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Red Chilli Powder Unit?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.