US Displaces China as Top Buyer of Indian Spices in FY26 Amid Sharp Drop in Chinese Demand

For the first time in several years, the United States has edged past China to become the largest buyer of Indian spices by value. In FY2025-26, American purchases stood at $624.35 million, compared with $518.98 million from China — a dramatic reversal from a trade relationship where China had long held the commanding position.

The change was not driven by a surge in US buying. American imports were themselves down from $711.16 million in FY2024-25, reflecting the dampening effect of tariffs and reduced shipment volumes. Rather, it was a steep contraction in Chinese demand that repositioned the two countries. India's overall spice exports fell 6.1 per cent to $4,430 million in FY26, against $4,722 million the previous year, underscoring that the headline shift comes against a backdrop of broad export weakness.

Chinese imports of Indian spices have collapsed from a peak of $928.28 million — with volumes of 3.09 lakh tonnes — in FY2023-24 to just $518.98 million in FY2025-26, a decline of 32 per cent year-on-year.

The primary culprits are two of India's highest-volume export spices: chilli and cumin. Cumin exports to China plunged 76 per cent in volumes and 80 per cent in value during FY26, as the neighbouring country ramped up domestic production. Chilli exports fell 21 per cent in value and 11 per cent in volumes.

Yogesh Mehta of SpicExim had noted recently that China recorded a very good chilli crop of around 85,000–90,000 tonnes last year, which sharply curtailed its need to source from India. Trade sources add that China has been actively expanding cultivation of heat-chillies domestically, a trend that could structurally reduce its reliance on Indian supplies over the medium term.

Industry voices are cautioning that the demand contraction from China is unlikely to reverse quickly. Emmanuel Nambusseril, Chairman of the All India Spices Exporters Forum, attributed the US move to the top buyer position directly to reduced Chinese appetite for chillies, pointing out that China has started cultivating heat-chillies at scale.

The concern is compounded by forward-looking signals from the trade: according to sources, China is expected to harvest an even larger crop in 2026, aided by favourable weather conditions and improvements in farming techniques. If that materialises, Indian exporters — particularly those in Rajasthan's cumin belt and Andhra Pradesh's chilli growing regions — may face another difficult year in their largest volume market.

For the US relationship, the picture is more nuanced. While headline value declined due to tariff headwinds, pepper and turmeric exports to the US grew during FY26, suggesting product-level resilience even as spice oleoresins saw a pullback.

The repositioning of the US as India's top-value spice buyer — even in a year when American purchases themselves declined — points to how dramatically China's withdrawal has reshaped trade flows. Though China still absorbs the largest volumes of Indian spices, value leadership has shifted West.

For the Indian spice industry, the lesson is one of concentration risk. Over-reliance on a single buyer that is actively building domestic production capacity has exposed exporters to sharp, sudden demand gaps. Diversification into value-added segments such as spice oleoresins — where the US is already a significant consumer — and deeper penetration of markets in Europe, the Middle East, and Southeast Asia will be critical levers to sustain export growth even as the China story evolves.