Investing in different types of small scale industries is on the rise these days. As people seek ways to be their own boss, choosing one of the low investment small scale manufacturing business ideas seems to be the best way to start their own business.
- Small factory business ideas
- Home manufacturing business ideas
- New small-scale manufacturing business ideas
- Best business ideas with low investment
Economic Importance of Small Business
Small Scale industries are attracting more and more people because they require less startup capital and have low infrastructure demands. Setting them up is also relatively easy than other types of high investment business.
Additionally, such low investment businesses are a boon to emerging economies like India.
Such low investment manufacturing businesses create many job opportunities for people that help in increasing their standards of living. With the increase in the gross domestic product the GDP per capita also rises. People are able to afford better houses, schools, health care and other amenities of life.
Hence, by investing in small scale business projects you are not only doing a service to yourself but also to the nation.
Small Manufacturing Business Ideas
Before we help you explore the various small scale business ideas, let us first start by laying down the prerequisites of starting a small scale industry.
According to government sources, a small-scale industry is defined by the amount of investment put into it. In case of manufacturing sector if the investment in plant and machinery is more than 25 lakhs but less than 5 crores then it will be viewed as a small scale manufacturing industry.
Similarly, in the service sector if the investment is in the range of 10 lakh and 2 crores then it will come under small scale service industry.
There are various types of small scale businesses and before investing in any one of them they should be evaluated thoroughly. Following things should be considered before you decide to invest in a small manufacturing business idea.
- Total setup cost
- Raw material required and its availability
- Human resource required and its availability
- Current demand of the product
- Expected demand growth
- Export potential
- Return on investment and expected payback time
One of the important aspects of starting a business is finance. According to an announcement made by the Ministry of Finance, certain small scale manufacturing businesses would be eligible for a capital subsidy for an upgradation in their manufacturing process.
You can also select one of the small scale industries ideas depending upon whether it is eligible for the capital subsidy scheme or not.
Following agencies will be responsible for the implementation of this Credit Linked Capital Subsidy Scheme.
- The Small Industries Development Bank of India
- The National Bank for Agriculture and Rural Development
- State Bank of India
- Canara Bank
- Bank of Baroda
- Punjab National Bank
- Bank of India
- Andhra Bank
- State Bank of Bikaner & Jaipur
- Tamil Nadu Industrial Investment Corporation
- The National Small Industries Corporation Ltd.
Once you have evaluated the business idea thoroughly you will need to know the laws governing its setup. You will also need to register it and obtain necessary licenses and permits depending upon the business type. Some online resource that would help you do this are:
You can also explore the list of items that are reserved for small scale manufacturing industry.
Now, let’s go ahead and have a look at some profitable small scale manufacturing business ideas.
50 Low Investment Small Scale Manufacturing Business Ideas to Start in India
#1. Disposable Plastic
These are plastic cups that are used in hotels, tea stall or restaurants. They are also used extensively in parties and events.
The cups come in small, medium and large sizes and can hold up to 300 ml of cold or hot liquids. They are disposable and easy to use hence their market demand is also huge.
According to a report published on the ministry of small scale industry site the start-up capital for this type of small scale manufacturing business would be around 10 lakhs. This will include only machinery and equipment. The cost of the land/building, labor cost and raw material cost will be separate.
#2. Tissue Paper and Paper Napkins
Tissue paper, paper napkins or facial tissue are a part of hygiene and beauty products. With increasing awareness among the public about the importance of cleanliness the demand for such products is also increasing.
Apart from their use in the domestic households they are also used in the hotel and catering businesses. They are small, lightweight and can be carried along anywhere.
The tissue papers are made from wood pulp and cellulose pulp. To start this small scale manufacturing business, you will need some equipment and machinery and an initial staff of 2-4 people. You will need to provide for training as well.
You must have heard of small manufacturing companies of notepad like Navneet or Classmate. Manufacturing notepads like these companies will require a startup capital of several lakhs.
The demand for notepad will always be there among the students. Hence it is a good and long term manufacturing idea.
Raw materials required for this type of manufacturing are paper, stitching wire, and gum. Notepad comes in all sizes and will require raw material accordingly.
The set-up of the business takes from three to six months. You can also apply for trade mark registration at the Trademarks registry site.
Agarbatti’s or Incense sticks are a must in any Indian household. They are used for all types of religious functions and ceremonies. The preparation of agarbatti is also quite easy.
The ingredients are mixed with water and applied on bamboo sticks. They are left to dry and then packed. All the process can be done easily by hands. Hence, it is one of the ideal home based manufacturing opportunities.
It requires low investment too. The equipment includes weighing balance, wooden planks, aluminum trays, hand sieves and would cost around forty thousand rupees. The cost of labor and raw material and other expenses when included will bring the total startup cost to around 4 lakhs.
#5. Kitchen Utensils
Kitchen utensils can be categorized into two types. Big utensils like pots and pans and the smaller one that are called cutlery items.
Manufacturing of both the types of utensils require machinery. You can choose to install a fully automatic machine or a semi-automatic one depending upon how much you want to invest.
You will require labor and space to set up the machines. The raw material needed will depend upon the type of utensil you will be manufacturing; aluminum, iron, copper.
This small scale manufacturing business provides a good return on investment and is a long term business model.
#6. Soap Making
Soap making is a booming small scale manufacturing business. It is easy to make, requires little raw material and provides a good return on investment. It is a fast moving product that is used by people all over the world on a daily basis.
There are different types of soap manufactured for personal/medical/laundry use. The main raw material used in the soap is fats and oils. Depending upon the type of the soap more raw materials can be added like glycerin or bacteria killing substances.
The initial investment required for this business setup is 15 lakhs. It will also require some space to set up the machinery and equipment. You can set up your business as Limited Liability Partnership in order to avail various business loans.
The steps to register a business as a LLP are given on Ministry of corporate affairs site.
#7. Organic Fertilizer
The demand for environmentally safe products is growing day by day. And that includes organic fertilizers. People are becoming wary of chemical fertilizer because of their harmful effects on the human body.
Organic fertilizer is a growing market and its manufacturing unit can be easily installed. It will require some machinery and equipment that would cost around 60 lakhs. The total cost including labor and raw material will come to 140 lakhs.
The raw materials used in the manufacturing of organic fertilizer are animal manure, composts and crop residues. They can be easily procured by coordinating with the local sewage management authority and butcher shops.
#8. LED Tubes and Bulbs
Light Emitting Diode bulbs and tubes are becoming the preferred source of light for people in homes and offices. These bulbs and tubes are inexpensive and energy efficient. It is also one of the emerging new small scale manufacturing business ideas.
The LED works on the principle of converting electric energy to light. They are also much cooler than the traditional bulbs and hence are long lasting.
The cost of setting up a manufacturing unit of LED bulbs and tubes is also not much. The machinery will cost around 8 lakhs. Additional labor charges and building/land charges will have to be added.
#9. Children’s Toys
Children’s toy is the best manufacturing business to start. Not only it has a huge market, but it also offers a variety of options to choose from. You can set up a small scale manufacturing business to make educational toys, electronic toys, soft toys or wooden toys.
Depending upon the type of toy manufacturing unit you decide to set up, the cost will vary. It ranges from several lakhs to several crores.
You can get more information about the toy manufacturing industry through the Toy association website.
#10. Packaging Boxes
Paper boxes and cardboard boxes are replacing wooden boxes. More than 80% of packing is done in cardboard boxes. They are easy to use and light weight. They are used in a wide variety of industries like soaps, tea, biscuits, and pharmaceuticals and so on.
The manufacturing process includes cutting, slitting, creasing, slotting and stitching. The machines required are cutting machine, slotting machine and stitching machine.
The total cost for this setup is more than 20 lakhs. It would include machinery, land, labor and raw materials.
#11. Matchbox and Matchsticks
Match box containing matchsticks is a small scale manufacturing business that has a growth potential of 5% as per a research done by the NIIR consultancy services. The use of matchsticks is everywhere from homes to offices to commercial establishments.
The setting up of this business is also quite easy. It is a good business opportunity for newcomers in the industry.
#12. Nut Bolts and Nails
Nuts and nails are an important part of any carpentry or construction business. They are required in abundance too. The manufacturing of nut bolts and nails is done according to industry standards.
Nails are generally made of steel, but they can also be made from aluminum and brass. Nails are also made of varied sizes and lengths.
Starting a nails manufacturing unit requires an initial capital of more than 50 lakhs.
Vermicelli is used extensively in all households across India. People of all religions use it to prepare festive delicacies. According to a report by NIIR project consultancy services setting up a small scale manufacturing business of Vermicelli requires a total investment of 34 lakhs.
The cost includes 7 lakhs for machinery and 15 lakhs for working capital.
The product is made from whole wheat flour which is easily available. The return on investment is also pretty good for this industry at 40%.
Buttons are mostly required by the textile industries and are always in huge demand. The manufacturing of buttons is also easy and does not require much capital. This business can be easily started from a small room.
This small scale manufacturing business requires a button machine, some button supplies and a design cutter. Try to get all this from quality suppliers in order to avoid any breakages.
Buttons can be made from various type of material but buttons made from plastic are generally in more demand. They are inexpensive and light weight too.
#15. Tennis Balls
Sport is being encouraged by the government at all levels. We see many sports complexes and sports arena coming up these days.
One of the sports that is on rise these days is Lawn tennis. Hence manufacturing tennis balls can be considered a profitable venture with high growth potential.
The raw material required for the manufacturing of a tennis ball is rubber chemicals and rubber. Generally, the implementation process of this small scale manufacturing business takes about one year.
Tennis balls can be manufactured in various grades. The total cost of setting up a tennis ball manufacturing unit comes to around 15 lakhs.
Doors come in a variety of shapes, sizes and materials. You can choose to start any one manufacturing unit of doors from PVC doors, wooden doors, and aluminum doors and so on. The cost of set up will be different for different type of door manufacturing.
The demand for doors is growing with the increase in construction activity all over the country. They are required by construction companies and carpenters.
#17. Drugs and Medicines
Setting up a small scale manufacturing business for drugs is a little difficult. It requires extensive research and many approvals and license. The drugs should also pass quality control before they are made available in the market.
You can decide to set up a manufacturing unit that produces tablets or syrups or ointments. According to reports published by NIIR the cost of equipment to manufacture a Paracetamol tablet manufacturing unit will cost 10 lakhs whereas the cost of a cough syrup manufacturing unit will be 40 lakhs.
Information about quality controls can be obtained from the Central drugs organization website.
With growing population and increasing awareness among mothers, diapers have become a necessary baby product. The market for diapers has shown a steady growth rate of 5-8% in recent years.
A diaper is made from water proof paper, absorbent paper, cloth and crushed pulp. It has the capacity to absorb 30-50 ml of liquid. It is easy to use and carry and provides comfort to a baby.
The machinery for making diapers will cost around 60 lakhs. It is one of the most profitable small scale manufacturing businesses in the modern world.
People have been using candles for festivals and also as a source of light when there is no electricity. The demand for candles is huge and cost involved in setting up this small scale manufacturing business is also less.
Candles can be made in different sizes, colors and shapes. Candles can also be used for exporting. It requires an initial capital of 40 lakhs which includes machinery costing 9 lakhs.
Helmets are worn to protect people from head injuries. People riding motorcycles and scooters are expected to wear them as a safety gear.
In some states wearing of helmet is compulsory and a fine is levied in case the driver is found driving without a helmet.
Helmet come in different sizes and shapes and have different features too. Some helmets come with a shield or an ear protection.
The demand for helmets has seen an increase due to government initiated safety drives and general awareness in the public.
The manufacturing unit of helmets requires machinery costing nearly 60 lakhs. During the manufacturing process it is important to adhere to the standards defined by the Bureau of Indian Standards.
Mattresses are always in demand whether it is homes or hotels. Mattress is made from different type of raw material like silk or cotton or coconut fiber. Such type of raw material is available in abundance in the country.
Mattress can be manufactured by hand or it can be machine made. The setup of plant and machinery costs 23 lakhs. This sector is showing good growth rates in recent times. Much of its growth is attributed to the growth in the tourism industry.
It is a good business opportunity for anyone wanting to enter the small scale manufacturing business.
#22. Mobile Phone Accessories
Mobile phone accessories include water proof cases, drop resistant cases, extra power, photo tools, ear phones, memory cards and so on. With the increase in the demand for mobile phones the accessories market is also growing at a steady rate.
The market is very competitive and it would be better to find a niche and establish yourself in it. The industry requires low investment but provides high profit margins.
#23. Auto Spare Parts
Generally, major automobile manufactures also manufacture the main parts of the vehicle. But some small spare parts are manufactured by local industry players and sold in the market. The buyers of such parts include car repair and service shops and car dealers.
The market for spare parts is growing steadily mainly due to the increased demand of automobiles. The cost of setting up a manufacturing unit of spare parts is also not much and would depend upon the type of part being manufactured.
According to a report published by the Ministry of small scale industries the total cost of setting up a manufacturing unit for pins (valve pins, gear pins and shaft pins) will be more than 10 lakhs.
#24. Carpet Manufacturing
Carpets are mostly used to enhance the beauty of a room. They are used mostly in hotels. Carpets can be hand-made or machine made. If you have less capital then it would be better to start a hand-made carpet manufacturing unit.
The best place to look up for information on the types of carpets, their manufacturing process, and investment is the Association of carpet and rug manufacturers and suppliers.
#25. Drinking Straw
Plastic drinking straws are used in all types of cold drinks, juices and similar kind of drinks. The demand for these type of straws is always there especially in summer months. Setting up a small scale manufacturing business of drinking straws will be a profitable venture.
You will need some small manufacturing machines like straw making machine and a cutting machine.
The raw material in this case will be plastic beads which are put in the straw making machine. Once the straws are out, you can cut them with the cutting machine.
The cost of machine and raw material will come out to be in the range of 5-6 lakhs.
#26. Ginger Garlic Paste
Ginger garlic paste is a ready to use product which is used in households and hotels and other commercial catering businesses. It has more market demand in urban areas than rural areas. The preparation of this product is also quite easy which makes it an ideal manufacturing idea to start from home.
In order to make this product you require mainly a wet grinder and hot sealing machine. After putting in appropriate quantities of ginger, garlic, water and salt in the wet grinder you will get a smooth paste which you can pack in plastic pouches and seal them with the hot sealing machine.
The cost of setting up this small scale manufacturing business is more than 5 lakhs which includes machine cost, raw material cost, labor and building charges.
#27. Ice Cream Cones
Ice creams are always in demand especially in places which have a warm climate almost the year round. With ice creams the demand for ice cream cones is also linked and hence investing in making ice cream cones is definitely a profitable business idea.
The cost and space requirements for this type of business are also minimum. You can easily carry out this business from your home. You just need a cone making machine and you are set.
The raw materials include wheat flour and some artificial flavoring agents. You just need to put the dough in the machine and cones of desired shapes and sizes will come out.
#28. Bakery Items
Bakery items are popular with all generations of people. Setting up this small scale manufacturing business is also quite easy. It does not require much space or investment.
Depending upon the demands of the market you are serving you can decide to bake products like bread, biscuits, wafers and so on.
Before commencing the business you would need to procure licenses from the Food safety and standards authority of India (FSSAI).
You will need to install biscuit and bread making units. You will also require some equipment like mixer, grinder, weighing balance and other utensils. You can go for automatic or semi-automatic units depending upon your capital.
Raw material includes wheat flour, oil, butter, sugar which can be easily procured from a local supplier or wholesaler. You can also contact National institute for entrepreneurship and small business development for any of your training requirements.
#29. Wigs and Hair Extensions
Wigs and hair extension market is growing slowly. They have become an important fashion accessory for fashion conscious people. Wigs and hair extension can be made from synthetic material or natural hair.
After seeking licenses and permits you will need to procure the raw material. In case you are using synthetic material then you will have to purchase nylon or polyester and welding and stitching equipment.
Natural hair can be procured from salons or even temples where people donate their hair. The wigs and hair extensions can be sold to beauty parlors, wholesalers or retailers.
Cosmetic includes a wide range of things like lotions, creams and other facial and beauty care products. Starting such a business requires knowledge to make such products. It would be better to attend some specialized training before you start making such products.
Quality is important here and approval from various quality control organizations will be needed. You can know more about it from the bureau of Indian standards website.
Opening small scale manufacturing business of pencils is quite easy and a long term business opportunity. The demand for pencils is forever and you can make a variety of pencils according to specific demands.
Pencils can be soft or hard, black or colored. They are used by students and artists and are considered a more economical option than pens. They also help in saving paper.
The total cost of setting up a manufacturing unit is 55 lakhs which includes 31 lakhs for the plant and machinery.
#32. Liquid Soap
Liquid soap is gaining popularity among housewives and hoteliers alike. The ease of use and storage is one of the main factors that contribute to its popularity.
To start a small scale manufacturing business for liquid soap making you will need some special machinery and permits.
You will need to apply for a clearance from the pollution control board. You will need to install a mixing unit, sealant unit, stirrer and a water treatment plant. Quality raw material will also be needed to come up with a quality product.
#33. File Folders
File folders can be easily made by using machines. The use of file folders is found in offices and schools. They are a great way to keep hard copies of various important documents organized.
You will require a paper folding hydraulic machine to start this small scale manufacturing business. It is a low investment business set up with high ROI.
#34. Hair Oils
The market of hair oil is flooded with different type of hair oils, like coconut, almond and other herbal oils. This small scale manufacturing business can be easily started in a small space or even at home.
The startup capital for this business is also quite less and it requires few raw materials. The raw material required to set you this business are Oil, perfumes, herbal extracts. You will require a bottling machine also for this set up.
#35. Dry Spices Powder (Masala Powder)
Dry masala forms an integral part of any Indian cooking. Various herbs and spices are grinded to make dry masala. They can be made from a single ingredient like in case of turmeric powder or they can be prepared by combining various components like in case of chicken masala.
Setting up a small scale manufacturing business to make dry masala require plant and machinery, labor, land/building which would all total up to nearly 200 lakhs.
The market for this product is huge. The product is light weight, easy to store and has a long shelf life.
#36. Ball Pen Refill
Ball pen are used widely and are always in demand. Whether it is home, office, school or college, the customers of ball pen can be found anywhere. The setting up of this small scale manufacturing business requires some machinery and raw material.
The machinery required for this business is Hot stamping machine, Nozzle fixing machine, Ink filling machine, punching machine and centrifuging machine. The raw materials required are pipe, nozzle and liquid ink.
The manufacturing process is quite simple and if your finances allow you, you can purchase a fully automatic refill machine and make the process much simpler.
#37. Sports Goods
Sports goods business is actually a combination of various small scale business projects which include manufacturing of balls, bats, and badminton rackets and so on. One very good source of finding more information about sports goods manufacturing is the Sports goods manufacturers association.
You will require different type of raw material for different type of sports goods. You will need feather for shuttle cocks, rubber for balls, cloth for bags, PU material for gloves and so on.
You will also require stitching machine, printing machine, lamination machine and cutting machine for this small scale manufacturing business.
#38. Wooden Furniture
Wooden furniture includes tables, chairs, window frames and doors. The furniture can be made from a variety of woods like teak wood, rose wood and so on. The market for wooden furniture is on the rise because of the growth in the construction industry.
The manufacturing process includes cutting, shaping, chiseling, designing and applying paint. In order to start a small manufacturing unit the capital needed would be more than 10 lakhs.
Chocolates are liked by everyone regardless of age and gender and can be considered as one of the best small manufacturing business.
Chocolates are easy to store and generally do not melt at room temperature. You can set up your small scale manufacturing business of chocolates easily.
The basic raw materials required are cocoa, sugar and oil. The plant and machinery will cost about 4 lakhs and the total cost to set up this manufacturing unit will be 45 lakhs.
#40. Paper Cups
Paper cups are made from paper having a wax lining. The cups can also be secured with plastic covering in order to avoid leakage. They are disposable and hygienic and can hold cold and hot liquids.
The total cost of setting up this small scale manufacturing business is around 190 lakhs with the machinery costing 47 lakhs.
#41. Chemical Fertilizer
Agriculture industry is one of the major industries in India. The survival of the industry depends upon water supply and fertilizers. Fertilizers help in increasing the productivity of agriculture produce.
Setting up a chemical fertilizer plant would be an ideal way to become a part of this huge agriculture industry. You can refer the Ministry of chemicals and fertilizers website for more details about the manufacturing and setting up of a chemical fertilizer plant.
#42. Phenyl Making
Phenyl is used as a disinfectant in households, offices, restaurants and many other public and private properties. Setting up this small scale manufacturing business does not require much startup capital.
Since phenyl comes under drugs you will require a license from the drug control authority of India. The manufacturing unit can be easily set in few months and the capital requirement is less than 10 lakhs.
#43. Paper Plates
Paper plates are used in events, weddings and various other social functions. They are disposable, light weight, easy to store and carry and economical. The manufacturing process of paper plates is also quite simple.
A die, pressing machine, cutter is required to set up this small scale manufacturing business.
#44. Dry Snacks
Dry snacks include potato chips, nut snacks, puffed snacks and so on. They have become a popular way to appease hunger of many school kids and office goers. With the daily commute becoming longer people prefer to snack on these things before they reach home for lunch or dinner.
They are easy to carry and store without any risk of damage due to their careful packaging. Different types of snacks require different type of raw materials and different machines.
You might require some training before you start this small scale manufacturing business but it is a most profitable venture to start.
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Slippers are always in demand and manufacturing them also does not require much raw material or capital. The raw materials required for this small scale manufacturing business are straps and rubber.
The machines required are drilling and stapling machine, cutting dies and some hand operated tools. The rubber sheets are cut and drilled to fit the straps. Once finishing is applied, after a final inspection the product can be packaged and delivered.
You will require registering your business with the registrar of companies.
With the fast paced modern life style people have little time to put in preparation of pickles. This gives rise to many small scale manufacturing businesses that specialize in pickle making.
It is one of the low start up manufacturing businesses and can be easily set up for as less as 5 lakhs.
The equipment required are also minimal. Apart from cap sealing machines you will require bottles, vessels, balances, cups and ladles.
#47. Mosquito Repellents Mats
With increasing health awareness among people, the focus is more on preventive measures than remedial ones. In order to fight diseases like dengue and malaria people are using various mosquito repellent products.
One of the products which is easy to manufacture is mosquito repellent mats. This small scale manufacturing business does not require much capital or raw materials. It just requires absorbent papers, chemicals and packing material.
#48. Gold Plated Jewelry
Gold plating can be used in a variety of things like jewelry, watches, cutlery, and frames and so on. They are ideal for enhancing the value and beauty of the products.
Establishing a gold plating small scale manufacturing business will require machinery and equipment and raw material costing 8 lakhs. The labor charges, building charges will be extra.
#49. School Shoes
School shoes for kids are always in demand. With more and more people sending their kids to schools in rural areas as well, the demand for this product is expected to grow more.
Setting up children’s school shoes small scale manufacturing business requires machinery and equipment costing 8 lakhs and raw materials like leather and soles costing 7 lakhs.
#50. School Bags
School bags like school shoes are also much in demand. They are made from a variety of material and require low initial capital to start. Raw materials include cloth, stitching material, zips and buttons.
Equipment used is a stitching machine and some hand tools. They can be easily made in different designs and sizes according to market demand.
Wrapping it up
Starting a manufacturing business requires a sufficient amount of research to make it successful. You can look into various small manufacturing opportunities discussed above and start any one of them using the following steps:
- Research into the market demand.
- Learn about the various competitors and what they are offering. You can even find out about any small manufacturing business for sale. It might be more cost effective than starting a new one.
- Find out the cost of land/building, machinery, equipment, labor and other working capital. Most of the figures in the article have been quoted from reports published by the Ministry of small scale industries and NIIR consultancy services.
- Contact various financial institutes to learn about their loan schemes.
- Inquire if any special licenses or permits will be required to set up the business.
- Find out if any training is required to run the manufacturing unit.
You can contact the Ministry of small scale industries, Chamber of Commerce, Pollution control board and Bureau of Indian standards to know more about any specific business pre-requisites.
With proper planning and research, you can easily set up a successful small scale manufacturing business that requires low investment and provides high returns.