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From Make in India to Aathmanirbhar Bharat, the Government of India has launched various schemes to boost manufacturing businesses in India. As a result, budding entrepreneurs are exploring new manufacturing business ideas. If you aspire to have a manufacturing business, this article elaborates on a few manufacturing business ideas that can turn out to be profitable.
5 small and medium scale manufacturing business ideas
Previously we have covered a list of the most profitable business in India. This list elaborates on innovative and new age manufacturing business ideas that are sustainable and profitable. Moreover, most of these manufacturing business ideas can be implemented in ₹50 lakh.
1. Manufacturing products made from recycled materials
Nowadays, consumers are inclined to eco-friendly products. Many businesses are turning waste plastics into fashion items such as shoes, t-shirts and so on. There are several startups as well as large-scale manufacturing companies working in this direction. The advantage of this business idea is that it is scalable. SME-sized startups such as Eco-Hike manufactures a t-shirt from around 5 recycled PET bottles. On the other hand, popular sportswear and equipment brand Decathlon also makes polyester t-shirts from PET bottles. Apart from plastics, many other materials such as paper, denim, etc., can be recycled to get a second life.
Depending on your business plan, availability of raw materials, market trends, etc., you can choose the raw material you want to work with. You can start small and scale it up.
2. Disposables dishes and biodegradable cutlery
The plastic ban that took place in India in 2022 opened up opportunities for many new businesses. Disposable dishes made from pressed leaves, bagasse, etc. A report from Transparency Research Market forecasts that the market for bagasse plates is expected to grow exponentially. As per the report, about 1,939 million units of bagasse plates were made in 2021 while in the market is expected to reach to 2,990 million units by 2029. This makes it an attractive business opportunity.
Alternatively, biodegradable cutlery made from plants starch, bamboo, etc., is gaining traction and can turn out to be a manufacturing business idea.
3. Toy making
The domestic market size of the toy industry is estimated to be $1.5 billion. According to Invest India, the Indian toy industry is one of the fastest-growing globally and is expected to grow at a CAGR of 12% between 2022-28 to reach $3 billion by 2028. There are various reasons for the rapid growth of the toy industry. One of the reasons is the availability of raw materials. Raw materials required for the business such as polyester, paper boards, textile, etc., are available in the country at competitive prices. This offers export opportunities too. Several states in the countries have specific schemes encouraging toy manufacturing. As a result, toy making becomes a lucrative manufacturing business idea.
Additionally, media reports suggest that the production linked incentive (PLI) scheme is expected to be introduced by the government of India.
4. Furniture making
Over the years, the Indian furniture market has witnessed a transition from a preference for basic furniture to lifestyle-oriented furniture. Moreover, COVID-19 induced lockdowns have changed the buying patterns and people have become conscious about making living as well as working from home more comfortably. This changing trend has created more demand for furniture in the market. Additionally, furniture with rich handicraft design has global demand.
According to Statista revenue in the furniture market stood at around $5.31bn in 2023 and is expected to grow at a CAGR of 8.19% by 2027. This makes it an attractive segment to invest in with domestic and global demand.
There are several new age furniture making companies that are successful in eCommerce too. Pepperfry, Urban ladder, etc., are making their presence in the online and offline business spaces.
5. Food processing unit
The food processing unit is yet another attractive idea. According to Invest India, the average annual growth rate of the food processing sector for the last 5 years has been 8.3%. This trend is expected to continue. In order to boost food processors, the government of India has launched several schemes including PLI. Moreover, 41 mega food parks, 376 cold chain projects, 79 agro-processing clusters, along with food testing labs are underway.
If you plan to start a food processing unit, there are several options available. Manufacturing cereals that have export potential or cold-pressed oil, seafood processing, biscuits plant, dairy, fruit juice, mineral water plant, papad or pickle making, spices making, savory snacks (namkeen) and so on. Depending on the availability of the raw material in your region, you can do a competitive analysis of your business idea.
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Concluding note: Tips to start your own manufacturing business
- Before you begin make a robust business plan. Do market study and competition analysis. This will give the feasibility of your idea.
- Understand the manufacturing technologies. Make a plan to acquire machinery and technologies.
- Make a plan to arrange funds for your business. There are several government schemes such as Prime Minister’s Employment Generation Programme (PMEGP) to start a new business. You can also consider taking a loan.
- Learn about various aspects involved in starting a new business in India. Understand company registration processes in your region and various licenses that you may need to acquire such as Udyam registration, ZED certification, FSSAI certification and so on.
Frequently asked questions
Here are answers to frequently asked questions about implementing manufacturing business ideas.