25 Small Scale Manufacturing Business Ideas in India
Starting a large business is fine. Provided, you have ample capital and other resources required.
However, a glimpse into most large business houses of India reveals, they started as small scale manufacturers and expanded over time.
More often than not, it can be pretty difficult to find capital to start a business. Given this scenario, the best option is to start a small scale business.
Generally, such businesses require capital up to Rs. 100,000 or lesser.
Indeed, products made by small scale industries are in greater demand since product quality is often higher and prices rather competitive.
25 Small Scale Manufacturing Business Ideas
1: Manufacturing Herbal Hair Oil
Admittedly, a lot of brands of herbal hair oils that promise near miracle cures for problems such as hair loss, hair fall and healthy hair are available in the market.
This tends to confuse consumers about which product will offer them best results. There are several traditional formulae for herbal hair oils which seem to be overlooked by large manufacturers.
Should you possess any such traditional recipe that prevents or reduces hair loss and greying, you can enter this business.
2: Papad & Sago Fritters
Papad and sago (Sabu dana) fritters are in demand all year round. Preparing them is very simple. It does not require a lot of manpower.
All you require to setup this manufacturing business are proper recipes and basic equipment that includes a gas stove, utensils and plastic sheets for drying.
And of course, the basic ingredients that go into these foodstuff such as flour, sago and spices. You might also need food grade plastic wrappers and a sealing machine.
These are available at fairly low prices in the market. Papad and sago fritters made at home or by small scale manufacturers are readily bought by stores or cooperatives who sell them at a premium.
3: Manufacturing Exotic soaps
India is a land of exotic herbs and spices that possess medicinal qualities. Lots of these herbs and spices have beneficial effects when applied on the skin.
Further, Indians, by nature, lay heavy emphasis on bathing and freshness every morning.
All you need is little study into beneficial effects of certain herbs and spices on the skin and blended with the simple process of making soap.
Making exotic bathing soaps can help you enter the small scale manufacturing business that promises rich returns.
4: Manufacturing Handmade chocolates
You and I love chocolates and so does almost everyone. Manufacturing chocolates is fairly easy. Moreover, they have a ready market since people always wish to try newer variants and exotic flavors.
You can let your culinary imagination run wild and make chocolates with the flavor of any spice or fruit. Chocolates also make ideal gifts during festive season and special occasions.
You can take orders for special varieties as well as sell regular ones through cake and pastry shops. Assuredly, there are several pastry shops who buy handmade chocolates from small scale industries.
5: Manufacturing Cookies and biscuits
Small scale manufacturing business of cookies and biscuits is extremely lucrative. Understandably, people look for newer tastes and varieties than those offered by large companies.
Furthermore, several smaller manufacturers and bakeries no longer produce cookies and biscuits since due to their inability to cope with stiff competition from giant companies.
Hence, there exists a vacuum in the market for cookies and biscuits that are made with traditional recipes and offer a taste of yesteryears.
Hence, small scale manufacturing of traditional cookies and biscuits is something you may consider to open a business.
6: Cottage butter, paneer and ghee
Nowadays, we are all accustomed to salted butter manufactured by large companies. Of course, a few varieties of unsalted butter are also available.
Despite, there are no manufacturers of cottage butter, as it is called. Cottage butter can be described as that derived from churning buttermilk. It has immense health benefits.
Furthermore, Indians are large consumers of paneer- or milk casein, derived by splitting milk. Traditional, homemade ghee or clarified butter, as it is called abroad, also has a great market in India.
With milk- both from cow and buffalo in abundant supply, a small scale manufacturing business to produce cottage butter, paneer and ghee is sure to succeed.
7: Manufacturing Incense sticks/ Agarbatti
Over decades, the state of Karnataka, especially the city of Bengaluru, held sway over the incense sticks or agarbatti manufacture in India. Primarily, this was due to easier availability of raw material in that region.
Nowadays, with superior transport facilities leading to easier access to raw material, agarbatti manufacturing business idea is rapidly spreading to other parts of India.
The agarbatti market in India is estimated at whopping Rs.3,500 crore annually and growing. Indian-made agarbatti are also making rapid inroads into foreign countries.
Agarbatti manufacturing is one of the small scale manufacturing businesses that show promise of exponential growth over coming years.
8: Candles & wax products manufacturing
With power failures rampant in several parts of India, candles are in great demand. Understandably, there is a huge market for candles of all shapes and sizes.
Nowadays, one can buy small candles used on birthday cakes to jumbo sized ones used for providing light during power outages. Candles are also used for religious ceremonies and rituals.
Additionally, a huge market for other wax products for offering at churches and other religious shrines or for decorative purpose also exists.
Making candles and wax products is fairly easy and has a ready market across the country. This makes candle and wax products making a great small scale industry idea.
9: Candy and hard-boiled sugar confectionery
Interestingly, large manufacturers seem to have relegated the candy and hard-boiled sugar confectionary market in India to the backseat.
Of course, there are quite a few large players in the market, but small scale manufacturers seem to dominate this fairly unorganized market.
Machinery to make candy and hard-boiled sugar confectionery is readily available and can be easily set up at any small premise. Furthermore, basic in manufacturers are readily available anywhere.
Moreover, there exists a large market for such candy and confectiogredients that include sugar, glucose syrup, approved food colors and flavors from reputed Nery on the Indian Railway network, where stalls at station sell such inexpensive products to travelers.
10: Soda & flavored drinks
A great example of small scale manufacturing business of soda of all types- plain and flavored can be seen in the state of Goa.
For just Rs.5, you can buy a 300ml glass bottle of plain soda while orange, lemon, strawberry and other flavored variants cost Rs.7 each.
In comparison, plain soda from large manufacturers costs Rs.10 and upwards while flavored soft drinks are priced around Rs.15 to Rs.20 each.
Interestingly, there are over two dozen small scale soda manufacturers in Goa but each of them has a fair share of the business. This is evident from the fact they have been in business since decades.
Furthermore, they are licensed manufacturers. Admittedly, there are large players in the market but the Goa example aptly reveals there is scope for small scale manufacture too.
11: Fruit pulp manufacturing
Shockingly, millions of rupees worth high quality fruits are wasted in India annually. Primarily, this wastage occurs due to the absence of an advanced cold chain logistic system.
Sufficient refrigerated trucks and warehouses are not available to store surplus produce. You can benefit from this malady by opening a small scale manufacturing business of producing fruit pulp.
High quality fruit pulp is in great demand among large scale ice-cream manufacturers, sweet makers, restaurants and star rated hotels as well as individual customers.
The demand for pulp of seasonal fruits such as mango is said to be rather high, especially from reputed ice-cream manufacturers and Indian sweet makers.
12: Dehydrated, frozen vegetables
As explained earlier, India is known to waste large quantities of fresh produce. This also holds good for vegetables.
Colossal quantities of high quality vegetables that end up in trash daily can be put to good use, merely if they are dehydrated and frozen.
For example, dried tomato, dehydrated onions, frozen green peas and cut beans are in great demand. Hence, a huge domestic and export market for dehydrated and frozen vegetable exists.
The sole impeding factor for India to enter this lucrative market is lack of adequate small scale manufacturing businesses that can provide such products.
Opening a unit that dried and frozen vegetables can open you doors to the large global market.
13: Indian bread (Chapati/ Paratha)
Almost every major city or industrial zone is witnessing an unchecked influx of single people- men and women. They converge on these cities, towns for employment.
Consequently, they are forced to live in accommodations that do not permit cooking or lack time and inclination to prepare their own meals.
Nowadays, another trend is for both spouses to work, to earn extra income to meet rising inflation or for better lifestyle. Chappatis, roti and parathas are staples of the Indian diet and most meals are incomplete without these types of bread.
A growing number of small scale manufacturers are now producing these Indian breads on industrial basis and selling them in convenient packs at economical rates.
Machines to knead dough and bake these breads are available at fairly reasonable prices.
14: Paper bags and envelopes manufacturing
Undoubtedly, recycling is fast gaining momentum. This is due to growing awareness for the need to preserve our environment.
You too can help preserve the environment while making money by opening a small scale manufacturing business that makes paper bags and envelopes.
Since this is a manpower intensive small scale business, you will also play a key role in providing employment. Generally, paper bags are made of discarded newspapers and similar material.
These bags and envelopes are in high demand with large supermarkets, pharmacies and other retailers. Especially, since they cost lesser and impart a great impression about the retailer being environment conscious.
Raw material you need is available aplenty and equipment such as cutters is inexpensive.
15: Costume/ imitation jewelry manufacturing
Costume and imitation jewelry has never been out of fashion. In the past, it was the mainstay of the economically weaker segments of the society.
However, as women, especially teenage girls are becoming increasingly fashion conscious, they look for matching accessories to suit their attire.
Online stores have also made fashion garments inexpensive. Correspondingly, a large but vastly untapped market for costume and imitation jewelry exists in India.
Women seek matching jewelry to go with their dresses. You can fulfill these needs by staying in touch with the latest fashion trends, often dictated by Bollywood movies.
Further, you can manufacture such costume and imitation jewelry that are trending. Few can afford to buy jewelry made of precious metals such as platinum, gold or silver for daily use.
Hence, you can meet the need by opening a small scale manufacturing business of costume and imitation jewelry.
16: Disposable plates, cups and crockery
Parties, celebrations and picnics are round-the-year events. Nowadays, almost no host or organizers bothers to offer ceramic, melamine or metal plates, cups, forks and spoons to guests, invitees or participants.
Instead, they rely upon food-grade plastic and Styrofoam plates and cups, forks, spoons and knives for guests to relish their food.
Understandably, since they are inexpensive, lightweight and disposable. Meaning, it saves them the bother of washing. Paper plates and cups are also common nowadays.
Street-side food vendors also use paper plates and cups. Keeping in mind this heavy reliance upon disposable plates, cups and plastic crockery, you too can open a small scale manufacturing business producing these products.
The market is huge and all parties get a slice of the pie.
17: Concrete blocks manufacturing business
Rest assured, India is witnessing a construction boom. This applies both- to civil construction including residential buildings to large infrastructural projects such as bridges and industrial units.
Especially in the building sector, the earlier trend of using traditional bricks is fast becoming extinct. Instead, these ubiquitous reddish-brown bricks are being fast replaced by concrete blocks of various types.
Understandably, with pressures to complete housing and other building projects faster, builders are constantly on look out for reliable suppliers of readymade concrete blocks.
Indeed, in some cases, the demand is so high, that builders are willing to pay premiums to procure these concrete blocks.
Setting up a small scale manufacturing business of concrete blocks of various sizes is inexpensive while returns are assured and high.
18: Mangalore Tiles manufacturing business
Surprisingly, Mangalore Tiles as they are called are not made only in that coastal city of India’s southern state, Karnataka. They are now made in various parts of the Indian sub-continent as well as the Far East.
While those made in and around Mangalore are made of locally available clay, makers elsewhere use somewhat similar material.
Nowadays, Mangalore Tiles are used mainly to impart a decorative look to bungalows and buildings, thanks to their aesthetic appearance.
A huge export market for Mangalore Tiles from India also exists. Mangalore Tiles are made by small scale manufacturing businesses.
With some space and the required equipment as well as proper raw material, you can open a Mangalore Tile manufacturing unit. Making Mangalore Tiles nowadays has shifted from traditional processes used in late 1800s to new, modern techniques.
19: Handbags, wallets and purses
Unmistakably, handbags, wallets and purses form an essential part of our daily life. Regardless of whether you are female or male, you rarely leave your home without either of these.
Handbags, wallets and purses can often cost a mini-fortune. Especially those products made by designers or some highly reputed manufacturer.
However, a very large market exists for unbranded handbags, wallets and purses. Almost everyone is tempted to buy a new one, provided the cost is commensurate with the quality.
A small scale manufacturing business that makes these essential items for women and men is something we recommend.
Provided, you are setting up a unit in some area where you have easy access to raw material and can procure the required manpower.
Here, skilled manpower is essential since people are always on the lookout for newer designs.
20: Bed sheet and blankets manufacturing
There are several locations in India known for manufacturing high quality bed sheets and blankets. These include Solapur in Maharashtra and Davangere in Karnataka, to name a few.
However, these locations are known more for their tradition of manufacturing bed sheets and blankets. The demand for high quality bed sheets and blankets, especially those made of cotton, continues to remain high.
Manufacturing these bedroom essentials is fairly easy provided you have skilled manpower and the required looms.
Setting up a small scale manufacturing business that produces bed sheets and blankets as well as pillow cases, is fairly inexpensive. The market is huge and ever growing.
21: Plastic tablecloth and tablemats
Increasingly, restaurants and households are dispensing with the regular fabric tablecloth and tablemats. The reason being- washing and maintaining them is time consuming and laborious.
Instead, they rely on disposable plastic sheets decorated with floral or other designs for use as tablecloth. Plastic tablemats are also in vogue since they allow easier cleaning- a mere wipe or wash in soap water is sufficient.
Plastic tablecloth and tablemats are increasingly finding favor with restaurants too. This makes their manufacture a very lucrative business.
You can consider opening a small scale manufacturing business to produce these table accessories.
22: Vehicle accessories manufacturing
Here, we do not imply automobile spares. Instead, we suggest you open a small scale manufacturing business that makes stuff including steering wheel covers, seat covers for cars and bikes and other similar accessories.
India is a large market for used vehicles of all types. There is also a booming market for new automobiles. Further, Indians are also known to keep their vehicle in a generally good condition and attractive looking.
Cloth, artificial leather and other such material is easily available and so are skilled labor and machinery to manufacture these accessories on a small scale.
23: Spice powders manufacturing
Indian cuisine heavily relies on myriad blend of spices. Admittedly there are giant players in the market. However, they have one inherent drawback.
Large manufacturers do not take into consideration, local or ethnic tastes. Instead, their spice powders are somewhat generic in nature.
Consequently, a small scale manufacturing business that makes spices suited to cuisines of certain or specific ethnicities will find a good market.
However, to enter into this business, you will require astute knowledge about the proportion of spices that will go into each powder.
You can decide upon the size of the package you plan to offer since stale spice powders lose their punch.
24: Medical requirements
Understandably, a huge market exists in India for medical requirements. These include surgical gloves, gauze, cotton swabs and similar paraphernalia used at clinics and surgery rooms.
Generally, such material in India is provided by small scale manufacturing units. However, one of the requirements to open such a small scale manufacturing business is- you will require clearances from the Food and Drug Administration.
This certification is required to ensure that your product meet the prescribed standards and are safe for use at clinics and hospitals.
Interestingly, a lot of cotton products including ear-buds and cotton balls are also used for cosmetic purposes. This expands the scope of your market.
You will also be able to bid in tenders floated by hospitals and the government for supply of these products.
25: Aluminum and fiber-glass doors, windows
Nowadays, wood has become an expensive commodity. Furthermore, making wooden frames for windows is pricier.
Simultaneously, most people prefer fiber glass doors for use bathrooms and toilets since they are water resistant and hence, have a longer life.
Additionally, they cost much lesser than their wooden variants. Fabricating aluminum frames for windows and making fiber-glass doors of various sizes is a simple small scale manufacturing business to set up.
Once again, machinery required is easy to procure and the manufacturing unit does not require large premises. You can offer readymade solutions or take orders for tailor-made sizes.
A small export market for these items also exists, primarily in the Middle East and Far East.
Financing your small scale unit
As we mention earlier, finances for a small scale manufacturing business can sometimes be difficult to find. However, you need not be discouraged.
The Micro Units Development and Refinance Agency (MUDRA), commonly called Mudra Bank, established by the Indian government, offers some assistance.
Mudra Bank is a scheme offered by the government through various banks. To avail of a Mudra Bank loan, you will require a comprehensive project report.
This has to be submitted to any Public Sector Banks or other financial institutions that are participating in the Mudra scheme.