The Ben Ish Hai (Rabbi Yosef Haim of Baghdad, 1833-1909), in Parashat Vaethahan (3), discusses a number of Halachot relevant to Birkat Ha’re’ah – the Beracha recited before smelling fragrant smells. He writes that one should hold the spices in his right hand while reciting this Beracha, just as one reciting a Beracha over food or drink should hold the food or drink in his right hand while reciting the Beracha.
It is customary to recite after smelling the spices, "Re’ah Niho’ah Ishe L’Hashem" ("a pleasing fragrance, an offering to God").
Occasionally, one may want to smell the spices before reciting the Beracha to test them and make sure that they emit a fragrance. If one is unsure whether the spices are fragrant, or if a person feels congested and is unsure whether he would be able to smell the fragrance, he may smell the Besamim before reciting the Beracha, in order to ascertain that he may recite the Beracha over those spices. After testing the spices, he would then recite the Beracha and smell the spices again.
If a person has before him a food or drink of which he wishes to partake, as well as spices which he wishes to smell, which Beracha should he recite first?
The Ben Ish Hai rules that food and drink take precedence over spices, and thus one should first recite the Beracha over the food or drink, and then recite the Birkat Ha’re’ah after partaking of the food or drink. However, this applies only if both the food (or drink) and spices were available at that moment. If one has spices in front of him while his meal is being prepared, he does not have to wait until he can eat before smelling the spices. He may recite the Birkat Ha’re’ah and smell the spices while he waits for the food, and then recite the Beracha over the food when the food is served.
Summary: One should hold the spices in his right hand while reciting the Birkat Ha’re’ah, and recite the words "Re’ah Niho’ah Ishe L’Hashem" after smelling the spices. If he is unsure whether the spices are fragrant, he may smell them first before reciting the Beracha to test them. A person who has food (or drink) in front of him together with spices should first recite the Beracha over the food and eat before reciting the Beracha over spices.
