What Manufacturing Business Should I Start in India?

. 7 min read
What Manufacturing Business Should I Start in India?

Youngsters passing out of college with a good degree generally aim for a job with a reputed organisation. The promise of a secured career and decent life is the principal attraction. The rapid growth of the internet and the emergence of social media create a new world of opportunities waiting to be exploited.

Many young people are successfully venturing into internet dependent businesses and are quite happy and satisfied with their achievement. The internet as a source of information helps many people find a suitable business project in manufacturing, trading, or retail.

Creating a manufacturing enterprise from scratch and nurturing it carefully to see it grow is a matter of incredible thrill and satisfaction. Many entrepreneurs enjoy such challenges and are successfully managing their businesses.

What Product Should You Manufacture?

Starting a manufacturing business involves substantial commitments – for finance, facilities, equipment, raw materials, workers.

Coordination is the main ingredient of success in a manufacturing operation. It would help if you had clarity on several issues before you begin your manufacturing journey.

Issues For Self-Assessment

1. What product to manufacture

  • Cost-effective method of manufacturing.
  • How many competitors are making the same item?
  • Are the necessary raw materials readily available – how much will be the logistics cost?
  • Quality aspects of the product— what standards competitors are following?
  • The market for the product— estimated demand; will a new entrant cause price destabilisation? What is the estimated life-cycle of the item to be manufactured— is it prone to a technological threat?
animated characters of employees standing on blue background

2. Employees

Skill level required for various functions of manufacturing; average cost; availability in the proposed location.

3. Statutory requirements

What kind of permits/licenses are required? Are the sanctioning authorities available in nearby locations? What are the statutory tax and other formalities to be maintained?

4. Location

Distance to the main road; access for trucks and parking space; water source; waste disposal; public transport availability.

5. Finance

The amount of total investment required along with the estimated working capital needs; possible sources of funds. The amount of your share in initial investment and the security against the loan. What are the incentives available from various government agencies?

Few Product Manufacturing Ideas

1. Eco-Friendly Bags

  • Shopping bags made from jute, a biodegradable material; easy availability of raw materials and are logistically most favourable in eastern India as most jute mills are located there.
  • Cloth bags made out of rejected/waste cloth.
  • Paper bags

This project begins with the advantage of being environment-friendly and is eligible for such ventures' special incentives. Favourable treatment is also expected in loan approval by banks/other financial institutions.

The estimated investment is in the range of Rs 5 to 6 lakhs. Criticality would be sales and distribution network and marketing activities to develop your brand. Moderately labour intensive; therefore, good management skills required.

2. Disposable Cups, Plates and Packing Material

Disposable food-grade items like cups, plates are a large segment in India. Apart from event-based usage, these are used daily by street food vendors across India.

Plastic derivatives like Styrofoam and the like are the primary raw material for this segment. Environmental laws are gradually banning the use of plastics for these items.

There is a good prospect for quality products at a competitive price which can happen if manufactured under quality guidelines, using the right raw materials. Some tree leaves (banana, palm, patravali and more) are also used as raw material besides recycled paper.

The estimated investments will be around Rs 8 to 10 lakhs.

3. Roofing Material

India's rural population is vast, and a majority of the houses today are semi-permanent structures. Tin, asbestos, galvanised sheets are the typical choices for roof material at present.

Asbestos has major environmental issues. Its production may come under a government ban; Tin, too, has ecological problems at the mining stage and may face a production curtailment. Galvanised sheets are an expensive option.

Aluminium recycled building material waste (recycling technology available) and plastic slabs made from waste materials and fitted in an aluminium frame are alternate options for roof material.

The primary market for roofing items will be rural India; one must develop the necessary network in villages and semi-urban towns.

Roofing is an excellent business proposition, and if you embark on the venture with proper planning and resources, this could well be a game-changer.

The estimated investment for this project is in the range of Rs 10 to 14 lakhs.

cashew nut oil poured in a jar and cashews placed on table with the jars

4. Cashew Nut Shell Oil

Oils and resins made from cashew shells find extensive use in lamination, surface coatings, electrical insulations, printing ink and few more products. This industrial item's expected demand is likely to show strong growth in the coming years based on the user items' subsequent development and growth.

Cashew oils are also exported from India to several countries. While there are many cashew oils manufacturers at present, the industry is growing fast enough to accommodate more players.

If you are located near a cashew producing region, this could be an ideal business choice with a high return prospect for you.

The investment requirement is in the range of Rs 15 to 20 lakhs. Higher working capital is necessary since the money turnaround time will be longer for this industrial item.

5. Detergent and Household cleaners

Rising living standards are directly linked to cleanliness; market sources indicate a per capita detergent consumption in India (2020) to be around only 3 kg per annum. The consumption is lower than most south-east Asian countries and much lower than the US or European countries.

If you have good marketing ability and can sustain your venture on a long-term basis, this could be the correct choice for you with a high ROI probability. Large players and well-established brands dominate the industry.

Success in this venture initially will come from mainly B and C class towns and rural areas. Your primary focus area should be product quality, distribution and brand building. Selecting a low price segment and offering a quality product in market-preferred pack sizes should be an effective strategy. Investment required for this is Rs 20 lakhs.

6. Organic Fertilisers

Consumer preference for organically grown fruits and vegetables is rising rapidly both in India and in the rest of the world. New processes are being developed in this sector regularly. Potentially, the segment is huge. If you can market your product correctly under a strong umbrella brand (covering all the items), you stand to gain a significant market share. The small but highly value-added home garden segment also provides an enormous scope in addition to the agricultural demand.

The investment will vary with your venture's scale and scope and can be from Rs 2 Lakhs to Rs 15 Lakhs.

Manufacturing offers a high challenge and a higher degree of satisfaction. It also requires more investment and in-depth planning and strategic decision making. But, if you are committed to your venture, willing to take risks, and timely decisions, the keys to your dream world are in your hands.

Also Read:

1) What are The Best Tech Business Ideas to Start?
2) What Are Some Good Small Business Ideas in a Residential Area?
3) Why Do Most Small Businesses Stay Small?
4) How to Get the Attention of Small Business Owners?
5) OkCredit: All you need to know about OkCredit & how it works.


Q. I am an MBA and want to enter the business— is trading better or manufacturing in terms of investments and ROI?

Ans. Investment is related to the product and scale of operations.

The real ROI depends on your planning, dedication, efforts, and hard work. These factors are common for success in any business.

Manufacturing will require in-depth planning and all-round coordination. The choice should depend on your motivation and confidence levels.

Q. Our family business is the manufacture of micronutrients. It is facing a loss, and we want to change our business line. What is the best option?

Ans. Micronutrient is still a good option. There may be operational issues which you can handle to make the unit profitable again. Alternatively, since you are already in an agricultural product, you can consider organic fertilisers.

Q. If I venture into manufacturing, will I be required to mortgage my house and other assets?

Ans. Security against the loan is not related to the type of business, and it is linked to the amount you borrow. Yes, manufacturing will need higher investments (depending on the product), but many schemes and incentives are available for this sector.

Q. I am based in a small town. Is it possible to start a manufacturing business here?

Ans. You can plan for an agri-based item like cattle feed or organic fertilisers, which can be sold quickly in the nearby rural areas. But, understand the business realities first before you make a move for a change.