Did you know that according to Cushman & Wakefield’s 2021 Global Manufacturing Risk Index, India has emerged as the second-most attractive manufacturing hub in the world? — AMAZING!
This is due to favourable government initiatives, the huge skilled labour pool, international investments, and rising domestic consumption.
Even, the Indian Government has been putting forth initiatives to promote manufacturing business ideas. Due to this, there is immense scope for manufacturing businesses in India.
If you are curious and thinking about starting a manufacturing venture of your own, then this blog guide is for you!
What is the Growth Potential of the Indian Manufacturing Industry?
The manufacturing sector is the backbone of the Indian economy and is a globally competitive sector given its second-ranking worldwide in the Global Manufacturing Competitiveness index.
The Indian Manufacturing sector recorded the highest production growth in the last quarter of 2021 setting strong signals for the upcoming year. And this is already being reflected in the first quarter of FY22 where the Indian manufacturing sector’s Gross Value Added (GVA) is predicted to reach an all-time high of USD 97.41 billion at current prices and the contribution to GDP is expected to reach 25% from the current level of 16%.
Moreover, it is expected to be a trillion-dollar industry by 2025 highlighting the immense growth potential of the sector. The sector has the ability to generate large-scale employment for the Indian population and has been a key driver of favourable policies and measures by the Indian Government to accelerate the growth of the manufacturing sector in India.
What Are Some Favourable Regulatory Policies for the Manufacturing Sector in India?
A snapshot of the government initiatives to boost the Indian manufacturing business are as follows:
1. Make in India
The Make in India Policy was aimed at spurring growth in the manufacturing sector given its importance to the economy, living standard, and employment. The scheme aimed at localizing production by investing in Research and Development (R&D).
For small and medium scale enterprises (SMEs), the Make in India policy enabled them to enhance their capabilities, gain easy access to financing options and innovate to contribute.
The long-term vision of this initiative is to drive foreign and domestic investment into the manufacturing sector, improve the Ease of Doing Business Index in India and build the best manufacturing infrastructure.
The Make in India initiative focuses on 25 industries. Automobiles, automobile components, aviation, biotechnology, chemicals, construction, defence manufacturing, electrical machinery, electronic systems, food processing, IT & BPM, leather, mining, oil and gas, pharmaceuticals, ports and shipping, railways, renewable energy, roads and highways, space, textile, and garments are some of these industries in the Manufacturing segment.
This scheme was revised in 2021 as the Make in India 2.0 scheme with revised goals and objectives and a focus on 27 industries with a special focus on textile and apparel, pharmaceuticals, and active devices, among others.
2. Startup India
Startup India is one of the main schemes implemented to support the Make in India policy. The fundamental goal of Startup India is to create an ecosystem that encourages the growth of startups while also promoting long-term economic growth and generating large-scale jobs.
3. Advantage India
The Government of India has rolled out several Production-Linked Incentives (PLI) schemes to foster an environment favourable for creating global manufacturing behemoths in India across 13 sectors and has also allocated over USD 27.13 billion starting from 2022.
Besides this, India is home to a large pool of skilled labour. With the growing proportion of young working people in the demographic dividend of India, India is said to realize its full industrial potential by taking advantage of this vast workforce in the upcoming years. Moreover, India has the potential to become a worldwide manufacturing powerhouse, with an annual contribution to the global economy of more than USD 500 billion by 2030.
Despite the enthusiastic efforts of the Indian Government and market players, there are certain challenges that pose significant hurdles to the realization of the full potential of the sector. Most significantly, there is a lack of uninterrupted power supply to industries which can affect productivity and efficiency.
Secondly, logistical costs are high in India due to fragmentation and inferior transportation deadlines. However, this space is witnessing significant improvements with the Government focussing on Infrastructure and with private players such as Delhivery, ShipRocket, and Bluedart working to resolve issues of logistics for SMEs in the manufacturing space.
Manufacturing Business Ideas
1. Coconut Oil
Coconut oil has been rising in demand since 2006 due to the various health benefits it provides. The use of coconut oil is not limited to cooking alone. It is a key ingredient in many products including soaps, hair tonic, and cosmetics.
Coconut oil is derived from dried coconut, making it a key component in manufacturing the item. The copra needs to be reheated in a dryer to maintain the level of moisture. The copra is then chopped and then roasted using steam for 45 minutes in a cooker.
Then, the copra goes through a two-stage crushing process in the oil expeller. The cake bits are separated from the oil by using a vibrator. In order to get the finest quality of oil, it goes through two filters. The final product needs to be stored in closed tanks until they are ready to be packed.
Cocoguru Coconut Industries Private Limited is a growing company that produces coconut oil. The brand has an operating revenue ranging from 1 Crore INR to 100 Crores INR.
2. Soap and Detergent
It is an evergreen business as most people use hygiene products. It is one of the oldest manufacturing industries in India. It accounts for 50% of the consumer goods sector. However, the process of making soap can be a little complex.
The main components when making soap is fat and alkali. The fats can either be animal fats reduced to fatty acids or vegetable fats like coconut oil. The most common alkali for soap production is sodium hydroxide and potassium hydroxide, with each giving the soap unique characteristics.
You can add other raw materials like fragrance, colours, and glitter to make the soap more attractive. The manufacturing process requires you to melt the fat and alkali together, so you need to add the other components carefully to not evaporate.
Santoor was the first Indian soap brand to hit Rs2000 crores in sales. It is the third-largest soap brand in India after Lifebuoy and Lux.
3. Paper Manufacturing
Paper has a high demand as it is used in nearly every industry. It also has one of the lowest manufacturing costs due to the easily available raw materials. The space required to set up a paper manufacturing plant depends upon the paper dimensions, quantity, and volume.
The fibre required to make paper fibre comes from wood. Other components in the process can be recycled newspapers, vegetable matter, and recycled cloth. Wood from coniferous trees makes for stronger paper.
The process of manufacturing paper involves creating and filtering the wood pulp, beating, and pressing it into paper. Modern papermaking methods have evolved to produce paper from even hardwood trees.
The average profit margin to be expected in the paper manufacturing industry is 4.44%. JK Papers is a leading paper manufacturing brand. They offer a wide range of paper products and premium packaging boards.
Snacks such as biscuits and cookies are the ideal business ventures if you enjoy baking and cooking. People are often looking for unique tastes and flavours to enjoy aside from popular brands.
It is also much more profitable as the requirements to start this venture are comparatively cheaper. You just need a small space to work in, the ingredients, and a few people to help with the manufacturing process.
The machinery required depends on the goods you make. Some common setups include mixers, a grinder, and an electric oven.
The key to having a successful snack brand is in marketing. Analyze the market needs and demand and market your products in a way that best satisfies your customers. Baked goods have endless possibilities when it comes to flavours, with many niches still unexplored.
Balaji Wafers is a popular snack brand in India. It generates a revenue of 3000 Crores INR and employs nearly 5000 people. The brand currently dominates the western markets with a whopping 71% in market shares.
5. Candle and Wax Products
Candles are useful for religious traditions as well as part of a self-care routine. They are used as decoration and to make a room smell better. These products are easy to make and require a single primary raw material: wax.
It will take some trial and error to figure out how much fragrance and colour to add to make the perfect candle. You will need to secure the wick before pouring the molten wax into the jar/mould.
This business can easily be done part-time by students or people who are looking for a side hustle.
Misa is a homegrown candle brand that offers handmade luxury candles. The brand uses the finest fragrances from France and the USA. The vegan-friendly candle business also offers accessories such as the snuffer to avid candle enthusiasts.
6. Automobile Parts
As the automobile industry continues to thrive in India, so does the automobile spare parts industry. In 2020, the total turnover from the automobile components industry was INR 1.19 lakh crore.
Starting small in this field is preferable as it tends to be quite labour and capital-intensive. This particular industry requires advanced machinery and a large space. It is advisable to produce those parts that are demanded regularly to prevent any dead stock.
Once you have earned a place in the market, you can expand your business. As you grow, so do your profits. Many dealers offer price quotes rather than a standard fixed price, leading to higher profit margins due to the flexibility provided.
Motherson Sumi Systems Limited offers a wide range of products when it comes to auto spare parts. The present range includes wiring harnesses (electrical distribution systems), rearview mirrors, moulded plastic parts including car interior and exterior parts, bumpers, dashboards and door trims, high precision machined metal parts and injection moulding tools.
7. Furniture Making
An interior design would be lost without the right furniture to bring the room together. Furniture making is an art in itself, often passed down through generations. The demand for furniture is pervasive as it is required in nearly every kind of room or organisation.
The operating of such a business can be difficult to estimate as the raw material used varies depending on the type of wood used and the type of products manufactured.
By offering high-quality products as per the customer’s needs, and offering them at the best possible price, you can attract the right customers to support your business. As with any business, the best way to do this is through thorough market research and identifying your target audience.
Usha Shriram Furniture sells a variety of products ranging from home use to institutional lighting. Established in 1983, the company focuses on providing the best quality furniture and has satisfied millions of customers over the years. The company exports to countries in the Middle East after testing its products as per domestic and international standards.
8. Jewellery Making
You do not need to invest in expensive materials such as gold and silver to make great jewellery. More economically-conscious customers are looking to buy affordable accessories that can complete their look.
Several start-ups have ventured into making jewellery out of clay, metal wiring, and recycled materials. As with the previous idea, you will require good quality goods and a reasonable price to attract the right customers.
This business relies on your ability to keep up with fashion trends and consumer demands. You will also require a lot of tools to handle the delicate designs and materials used to make the jewellery.
Pipa Bella is one of the most popular artificial jewellery brands in India at the moment. The brand offers an array of accessories including charm bracelets, layered necklaces, mangal sutra bracelets, earrings, and rings.
9. Tempered Glass Manufacturing
Tempered glass is one of the best screen protector materials for smartphones. As smartphone sales rise, so does the need to safeguard the touchscreens on them.
The tempered glass manufacturing business is low in investment and offers high profits, making it a popular venture. On average, tempered glass manufactures earn 3 to 4 Lakhs INR as their monthly revenue.
Tempered glass uses a thermal tempering process that hardens annealed glass. The process requires special machinery like a tempered glass manufacturing machine, nano flexible glass for screen protection, packaging materials, and a laptop.
Established in 2006, Vishvesh Glasses Private Limited is a trusted manufacturer for a variety of glass types, including tempered glass. The company offers tempered glass for aeronautical, nuclear, automotive, and architectural uses.
10. Mineral Water Manufacturing Plant
Catered events like weddings, parties, or even hotels use bottled water. A bottled mineral water plant is a profitable investment as long as you maintain the hygiene standards.
In order to stand from the competition, you would need a good strategy and marketing plan for your drinking water brand. It is a capital-intensive venture, but it is equally profitable. You can earn an estimated annual profit of 50 Lakh INR if your business is successful.
The nature of the business also requires various certifications like ISI certification from the Bureau of Indian Standards (BIS), pollution control certificate from local pollution board office, small scale industry registration certificate, and pest control certificate.
Trupti Enterprises is one of the top suppliers of mineral water in India. The company offers bottled water in three sizes: 20L, 10L, and 2L bottles.
The toy business in India is booming. In 2021 alone, the industry generated a revenue of USD 53,082 million. As the consumer base grows, businesses are tapping turning innovative toy ideas into opportunities.
The Indian government has even encouraged the toy manufacturing business by setting up toy clusters across major states. There are currently not enough toy manufacturers to meet the demand in the domestic market, and hence the country has been heavily relying on imports.
While a toy manufacturing business is profitable, it is quite a labour-intensive venture. You would need to research your market and find your niche. For example, with the interest in STEM fields on the rise, parents are keen on finding toys that would help kids understand scientific concepts better.
You would also need to source the raw materials required to build and design your toys, the machinery that will be involved, the workspace, and the workforce. The investment to start such a business is relatively moderate and the potential for returns is high.
Funskool is a top toy manufacturing brand in India. The company earned a revenue of 235 Crore INR in 2018. Funskool has scaled up operations to export their products to Africa, Bangladesh, Bhutan, Europe, the Gulf Cooperation Council countries, Maldives, Nepal, Sri Lanka, and the United States.
Being one of the oldest industries in India, India is still only able to contribute to 5% of the global textile trade. The government has taken the initiative to promote the trade in textile industries by creating a brand for premium cotton, “Kasturi Cotton”.
The raw materials used to create these sheets of cloth are easily available at a low cost in India. So if you happen to live in a state where there is an abundance of cotton or silk, then a textile manufacturing business may be suitable for you.
You can start the venture at a small scale and then expand as your business prospers. The location of your manufacturing hub is key to its success. The closer it is to the source of raw materials, or the import/export hubs, the better it will be for expenses in the long run.
A large scale production would require a large space, high-tech machinery, and a skilled workforce.
Currently, Raymond Ltd. dominates the global market as an integrated manufacturer of fabric. The company is also India’s largest woollen fabric manufacturer. Raymond earned an operating profit of 138.71 crores INR in 2021.
13. Handicraft Items
Artisanal crafts have a growing appreciation in the local and international markets. Handmade products carry cultural value and one’s heritage. The unique ethnic designs appeal to the masses.
As a manufacturing business, the requirements would be a source of raw materials to craft from and highly skilled artisans to produce the goods.
The value of these products depends on their authenticity. Local artisans replicate designs of the culture present there, as opposed to trying to represent a different culture present in a different part of the country.
Gaatha sells “handmade treasures” from Gujarat. They sell crafts that present the consumer with stories and ideologies, from highly skilled artisans that deserve more recognition. Their products include handloom woollen shawls, cotton sarees, decorations, and banana fibre papers.
The pickle manufacturing business is one such venture that requires minimal investment. It can be conducted from your very own kitchen or a dedicated manufacturing building. Pickles are a part of daily meals in Indian households. The industry is estimated to be worth INR 400 crores.
When it comes to pickles, there are almost too many options to produce. Lemon, carrot, mango, prawns, mixed vegetables, garlic, and so on are all popular pickled items. The type and flavour of the pickle depend on the region.
You will need to find your target consumers’ tastes and preferences before starting production. Most of your expenses will come from buying the equipment used for production as the raw materials are available easily in India.
There should also be a significant focus on the packaging of the pickle before the sale. It should suit your product, transportation, and budget.
Priya Pickles is one of the bestselling brands in India. It offers a variety of flavours and combinations to the fancy of even the pickiest consumers. The company has even come up with unique products such as the drumstick pickle, coriander pickle, citron pickle, gongura pickle, and tomato pickle.
15. Smartphone Accessories
Phone cases, keychains, selfie sticks, and earphones are among a few of the accessories that can be manufactured. Just as with tempered glass, the demand for smartphone accessories has also been on the rise as a result of the demand for smartphones.
In India, mobile accessories are sold with a profit margin ranging between 30% to 60%. With several accessories being imported, starting a manufacturing business in this field would be a competitive advantage.
Due to the small size of phone accessories, they are easy to store for inventory. You can offer customized accessories, such as a phone case, to print on demand, or produce in bulk. The choice depends on your business goals and risk appetite.
The manufacturing equipment, materials, and the investment required depend on what you intend to produce. Phone cases alone come in a variety: gel cases, bumper cases, wallet cases, tough cases, and battery cases.
boAt is an Indian start-up company that offers high-quality audio accessories for smartphones. Currently, their products are earbuds, earphones, headphones, and wireless speakers.
16. Disposable and Eco-Friendly Cutleries
We live in the age of environmentally aware consumers and enterprises. On the same hand, there has been a boom of eateries and restaurants as well as food delivery platform aggregators such as Swiggy, Zomato, and Dunzo. Further, the Government is also incentivizing the shift away from one-time use plastics with favourable policies.
All of this has brought forth a large demand for durable consumer goods related to food delivery i.e. Eco-friendly cutleries in the form of reusable wooden/bamboo spoons, forks, plates, and bowls, etc.
Thus, this could be a lucrative manufacturing business opportunity that requires low investment and a set of machinery such as a power press and moulds. However, the pandemic has brought forth concerns of hygiene and safety thus pushing the need for disposable cutlery.
In this respect, cutlery manufacturing businesses could utilize E-commerce platforms such as Amazon and Flipkart to push these products to the public as well as engage in whole-sale to restaurant clients, airlines, etc.
17. Leather Goods
Manufacturing leather items is one of India’s fastest-growing businesses. India is a hub of manufacturing leather goods and produces over 12.93 per cent of the global leather products. It has one of the highest export values of over INR 328 billion and holds great promise for leather footwear and apparel.
Manufacturing leather goods necessitates a large capital investment besides investing in specialized technology and warehouses. Tanning and finishing, garments, footwear, per cent and leather jackets and products are some of the most wanted items on the global market.
There has also been a surge in demand for cruelty-free leather products which involve eco-friendly alternatives to traditional leather. Some of the alternatives to leather raw materials include Pleather, Naugahyde, vegan leather, barkcloth, cork, glazed cotton, and paper. Pleather is the most used replacement that produces faux leather apparel. When compared to leather, it is constructed of plastic, which is less expensive and lighter.
With this, you can consider building a local brand that sources eco-friendly raw materials to create cruelty-free leather products.
Agarbattis are a staple in Indian households. They are often used for religious purposes, but they can be used to make a room smell fresher. The industry is growing exponentially, with forecasts stating that the industry will achieve a 15% increase in exports
The raw materials required to manufacture agarbattis are few and simple. Also known as incense sticks, it merely requires bamboo sticks and fragrance oils to produce them. The bamboo sticks are coated with machilus sawdust paste, a highly absorbent material.
Incense manufacturers often keep track of trends in popular scents and fragrances. If they happen to come across one that would work well as an agarbatti, they produce test batches to share as samples.
If the samples receive positive feedback, the producer can then manufacture them at full scale.
Moksh Agarbhattis is India’s leading incense stick manufacturer. The brand exports its products to meet the demand of millions of Indians living in countries like Canada, the USA, Indonesia, Malaysia, Bangladesh, and Mauritius.
19. Homemade Chocolate
Chocolate lovers are constantly exploring new flavours and variants. People are also looking to try more homemade products rather than mass-produced goods by big-name brands.
Homemade chocolates are believed to be healthier, making them more appealing to choco enthusiasts. The demand for chocolates is also partially seasonal as the demand rises during festive seasons.
A successful chocolate manufacturing business could pave the path to having exclusive deals with hotels and bakeries that require quality chocolate to offer their customers.
Kocoatrait is the world’s first zero-waste chocolate. The brand positions itself as an eco-friendly company looking to reduce the environmental impact of producing chocolate. They offer varieties of chocolate for consumption and bakery use.
A footwear business would require a moderate to a large amount of space as there are different processes involved in shoe-making. Apart from stitch work, it also involves moulding, pressing, and pasting as well as warehouse costs.
The stitching techniques and materials used are different from those used for stitching garments. Therefore, you would require a specially skilled workforce for your venture.
Ideally, a footwear manufacturing business would start large scale production as the capital investment required is high. The machinery used for footwear production depends on the style of footwear and design you intend to produce.
Laskhani Footwear Pvt. Ltd. is the largest manufacturer of sports shoes, beach slippers, PU injected sports shoes, PVC injected sports shoes. The company has a total production capacity of 55.5 million pairs per year.
Additional Manufacturing Business Ideas for Indian Entrepreneurs
If you don’t resonate with the 20 manufacturing business ideas given above, then here are 20 more to consider!
- Hair products manufacturer
- Makeup production
- Fertilizer production
- Chalk manufacturer
- Electrical fittings manufacturer
- Musical instrument maker
- Eyeglass manufacturer
- Air freshener producer
- Sports equipment manufacturer
- Bread maker
- Belt make
- Designer bindi maker
- Diaper manufacturer
- Fruit pulp manufacturer
- Jam/Jelly making
- Hand Sanitizer manufacturer
The manufacturing industry is incredibly profitable and has growth potential. Starting a new business requires a lot of planning and investment. With manufacturing, you would also need to identify the best source for your raw materials in terms of quality and cost.
We hope these ideas have inspired you to start your own venture!