Top 25 Small Scale Manufacturing Business Ideas in India

Why Start a Small Scale Manufacturing Business in 2025?

Let’s know the main benefits of starting a small manufacturing business in 2025.

Lower Investment

A significant benefit of starting a small-scale manufacturing business is the low investment required. Many companies often fail to start their courses due to a lack of funds, while others face the challenge of obtaining loan approval. Small scale ventures generally need low capital investment, such as a sanitizer or candle manufacturing business.

Higher Flexibility

Because of low capital and lower manpower investment, most small scale businesses enjoy high flexibility. They can scale or lower their production scale anytime to adjust to the market demand. This also saves them from acute financial losses by restructuring the supply.

Contributing to the National Economy

Small businesses still contribute towards 40% of India’s industrial production, as per the report by the Government of India. When you start a small scale venture, you are acutely creating new jobs and promoting national manufacturing.

Support Local Economy

Most times, labourers migrate to larger cities to get a better chance of employment. Small manufacturing businesses also reduce the migration of labourers and support local employment.

Expand with Government Support

Government schemes such as Pradhan Mantri MUDRA Yojana fund small scale ventures to expand and increase the sales of operations. A large number of small scale businesses face a funding shortage to start their operations, which is solved by government loan schemes.

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Which Factors to Consider While Starting a Manufacturing Business?

As a business owner, you will need to understand the factors that affect a new business. For example, if you select an industry of which you have little understanding, you’ll end up in loss because of poor market analysis. Let’s check some of these factors to know better.

Step 1: Select the Industry

Selecting the business industry is the first step. As a business owner, you need to first analyze the market demand, major barriers to entry, and understand the overall supply scenario. Get deeper into market research, and check average profitability in the chosen industry.

Step 2: Understand Capital Requirement

A manufacturing business is essentially dependent on funding, as the more easily funds can be procured for the business, the easier the business can be scaled. Many businesses still do not succeed because of a shortage of funds, so always investigate if the business requires a large pool of funds.

Step 3: Check for Availability of Suppliers

Your business can incur much lower costs if it has reliable suppliers who will outsource input materials at a low cost. Before getting into a small business, inquire about the availability of vendors, their margin, and the cost of freight. If your small business relies heavily on the daily procurement of raw materials, you have to inquire about the cost of the supply chain as well as find a reliable logistics partner.

Step 4: Decide the Sales Funnel

A sales funnel is another important factor to consider as it builds awareness and slowly attracts potential leads. Decide the channels of distribution as well as the marketing strategy to be adopted. It can be building product demos, or even cold outreach for getting leads.

What Are the Main Challenges to Start a Small Scale Manufacturing Business?

Executing small scale manufacturing business ideas in India is challenging for several reasons. Take a look at these main reasons:

Poor Funding

Businesses often have to rely on capital loans for getting started, and the unavailability of investors causes long-term funding problems. Small businesses in India end up taking credit from NBFCs and private institutions at higher rates, creating high debt. A better way to solve this problem is crowdsourcing, or looking for angel investors.

Poor-skilled Team

Small-scale manufacturers often cannot recruit a highly skilled team and end up with staff who need more upskilling. This causes them to perform at a sub-par level, and also not catch up with the competition. You can provide professional mentorship to most employees or develop a mandatory skill upliftment program to boost team skills.

Low Cash Flow

Small businesses tend to run with a poor cash flow to start with. This can be an issue because of an improper business plan or a poor pricing strategy adopted.

Logistics Optimization

Small businesses depend heavily on vendors to outsource materials, and a disruption in transportation or the unavailability of raw materials can cause a failure in supply. Increasing the supplier base and connecting with independent suppliers can resolve this issue, too.

Top Manufacturing Cities In India

If you are looking to start the best small-scale manufacturing business, choosing the right city is vital. Not every city will fit the needs of starting your business, as some cities have better resources and skill supply that align with your business needs. You can try out these cities if you have a resource constraint, but are still enthusiastic to start your own small scale business.

Maharashtra

Maharashtra is still considered one of the most vital areas in India to start a small business. In 2023, more than 31 lakh businesses were registered in Maharashtra alone. As per the records of the Maharashtra government, the state recorded the highest FDI investment of ₹70,795 crores in 2025.

Best Small Businesses to Start in Maharashtra

• Poultry farming
• Organic agriculture
• Jute bag making
• Yoga and wellness center

Gujarat

Gujarat hosts India’s oldest business hub, started by the British in the 1900s. The state sees the largest industrial growth, with an annual growth rate of 12.5%. If you want to start a small scale manufacturing business, Gujarat is an ideal choice. You can start businesses such as a small cotton firm or a gemstone business.

Best Small Businesses to Start in Gujarat

• Organic cotton handloom
• Gemstone business
• Production of plant fertilizers
• Sweet and confectionery business
• Petroleum jelly manufacturing business

Karnataka

Karnataka contains the Silicon Valley of India, Bangalore. This state has been famous for manufacturing electronic components, biotech products, and warehouse businesses. since a long time. Karnataka has already been ranked as the best performer in 2021 by DPIIT for contributing heavily to the tech environment of India.

Best Small Businesses to Start in Karnataka

• Software services
• Laptop and mobile repairing business
• Coir product business
• Sandalwood exporting business
• Petcare and veterinary care business

Delhi

If you are looking for a small scale business to be started on a low budget, Delhi can be your starting point. In 2023, the 6th Economic Census recorded Delhi to have 8.75 lakh active businesses. The current Chief Minister of Delhi has announced an allocation of ₹111 crore, opening the portal to all new small businesses for starting a new venture.

Best Small Businesses to Start in Delhi

• Clothing manufacturing business
• Bakery business
• Micro food processing
• Event management
• Sustainable products store

But before jumping straight to the range of ideas, let us take a quick walkthrough to understand what a small manufacturing business is.

What are Small Manufacturing Businesses?

You will not get clear, small scale manufacturing business ideas in India if you don’t understand the features. Here they are:

Scale of business

The scale refers to the volume of output the business can produce in a given period. In the case of small-scale businesses, it is usually low because of lower employee count, having a niche market, and capital support.

Regional market

The market of operation for small-scale businesses is usually the regional market, as these businesses operate based on local networks.

Procuring from regional markets

Small-scale manufacturing businesses engage in procuring commodities for the regional market.

Highly flexible

These companies are adaptable to changing the scale of production and quite flexible to external economic forces such as inflation of raw materials.

Read also the best online businesses to start in 2025.

Small Manufacturing Business Ideas with Low Investment

Here are some of the small-scale industry ideas that require a minimum of investment and can be easily started.

1. Bakery products

Manufacturing bakery cookies and cakes can be a great small-scale business option. The Indian market for bakery-based goods is highly promising and is estimated to grow at aCAGR of 9.8% by 2032.

Resources required:

• Hire 1-2 bakery chefs
• Outsource basic raw materials (wheat, clutch of eggs, and cream)
• Bakery ovens
• Refrigerator

Minimum investment: You will need a minimum of ₹50,000 - ₹80,000 to start this business. The expenses for licensing, getting GST registration, and the FSSAI license will be added.

2. Sanitiser and soap manufacturing

After COVID-19, the market for sanitisers and soap may grow at a CAGR of 8.71% by 2029. The cost of equipment and supplies is also quite low, so you may consider this as one of the sustainable small-scale manufacturing business ideas.

Resources required:

• Industrial sanitiser maker
• Soap-cutting machines
• Vacuum plodding machine
• 2-3 trained staff for operating the machine
• Packing materials

Minimum investment: The hand sanitiser machine can cost on average ₹1 lakh - ₹1.5 lakhs, while the soap machines can cost between ₹20,000 - ₹90,000.

3. Candle manufacturing business

Starting from any religious confluence to birthday parties, candles have a wider market demand in India.

Resources required:

• Paraffin wax
• Artificial fragrance
• Candle colours
• Automatic candle manufacturing machines

Minimum investment: Investment for manufacturing candles can vary between ₹80,000 and ₹1 lakh, depending on the machine you are purchasing.

4. Pet food production business

In the list of profitable small-scale manufacturing business ideas, the pet food business is an attractive one. Consider areas such as Bengaluru and Mumbai to start, because of the high demand and pet-friendly living culture in these cities.

Resources required:

• Pet food production machines
• Processed meat supply
• Pea fiber
• E-commerce website for online deliveries

Minimum investment: The minimum investment can range, on average, from ₹20,000 to ₹50,000.

5. Pickle manufacturing business

Pickle-making business is a high-budget-saving idea among other small manufacturing businesses. By 2033, the market is expected to grow at a CAGR of 5.30%, which adds more reason to give this one a shot among other small scale manufacturing business ideas.

Resources required:

• Pickle-making machine
• Pickle spices
• Vinegar
• Mustard oil
• Red chili powder
• Turmeric
• Refrigeration unit

Minimum investment: You can expect an initial investment of ₹80,000 to ₹1,00,000

6. Naphthalene balls business

This business has a wider potential for earning a considerable profit.

Resources required: Camphor and paraffin wax are the only major requirements in resources, as naphthalene balls can be easily manufactured right from home.

Minimum investment: The initial investment can vary from ₹40,000 - ₹60,000 in a month

7. Cashew production business

In India, cashew manufacturing is a highly profitable venture, with an anticipation to grow by 15% next year.

Resources required: The basic resources needed are an expansive area for cashew cultivation and for setting up a processing plant.

Minimum investment: The initial investment for this business can vary between ₹2 - ₹3 lakhs

8. Leather bag manufacturing

Currently, there are multiple types of leather bags that you can manufacture with minimum resources.

Resources required:

• Tanned leather
• Zip buttons
• Silk linen cloth
• Adhesives
• Leather crafting machine

Minimum investment: The basic capital requirement is ₹2 - ₹10 lakhs for this business

9. Disposable plate manufacturing

This business has a pan-India market demand, with an all-season market. Moreover, this is ideal to start, as the customers range from homeowners to roadside food stalls.

Resources required:

• Scrap paper
• Green film
• Summa paper
• Plate manufacturing machines

Minimum investment: Investment is low, ranging between ₹20,000 - ₹90,000 including raw inputs and machinery cost

10. Organic farming business

In multiple small-scale industries, this business is quite effective in India as almost 28% of customers are demanding organic vegetables. After getting certified by the government, one can initiate this business.

Resources required: The business owner needs to have their land, crop manure, compost, and biofertilizers. These are easily available in the market.

Minimum investment: The starting capital requirement is average between ₹1 lakh - ₹2 lakhs

Popular Small Manufacturing Business Ideas for Ladies

Note down these varieties of product-based manufacturing ideas for ladies. Each one of these ideas has an accelerated potential to make a profit and establish a global brand for your business.

11. Papad manufacturing

This manufacturing business for ladies is convenient because papad manufacturing needs the least resources and still carries a good amount of income potential.

Resources required: The basic ingredients for making papad are available in any local market in India.

• Flour
• Black pepper
• Common salt
• Papad-making machine

Minimum investment: Can be as low as ₹10,000 to ₹50,000 on average as starting cost.

12. Cosmetic production business

India has an expansive market for both herbal as well as natural cosmetics, so women can manufacture these and list their products on various e-commerce platforms.

Resources required:

• Resources required:
• Silicones
• Ester oil
• Turmeric
• Aloe vera extract

Minimum investment: The minimum capital required is ₹1 lakh to ₹7 lakh depending on the scale and the nature of the business.

13. French fry business

Another ideal form of manufacturing business for ladies, this one needs much lower capital expenditure and low working staff. You can kickstart this business right from your home without any extensive years of experience even.

Resources required: The starter pack for the french fry business goes with an automatic french fry-making business refrigerator and a better water recycling system.

Minimum investment: Initial investment can range from ₹10 lakhs to ₹15 lakhs approximately.

14. Woolen garments manufacturing

This market is ever-expanding, and depending on the budget woolen products can be exported to clothing brands at premium prices.

Resources required:

• Machine gauges
• Sewing units
• Raw cotton
• 2-3 working staffs

Minimum investment: According to the Indian government, wool products exports were 33.61 million kgs in 2024, which shows immense profitability.

15. Ice cream cone business

Ice cream cone making is one of the most viable businesses in India. Being a mass-consumable item pan India and with low resource requirements, this is the next best manufacturing business for ladies.

Resources required:

• Automatic cone making machine
• Wheat flour
• Sugar corn flour
• Natural colour agent
• Waffle

Minimum investment: The average investment can be estimated at ₹7 lakhs to ₹10 lakhs

16. Jam manufacturing

This one requires much less input as compared to other businesses and can be started with a smaller capital investment too.

Resources required:

• Jaggery
• Honey
• Lemon
• Land
• Refrigerator
• Freezing unit

Minimum investment: You can start this business right from home at only ₹20,000 - ₹40,000

17. Cloud kitchen business

A woman can directly commence this business right from her home, with an earning potential of 50,000 monthly.

Resources required:

• A personal kitchen space
• Kitchen chimney
• Deep freezer
• Oven
• Food registration certificate by FSSAI
• GST certificate
• NOC certificate by the fire department
• Partnership with a logistics agent

Minimum investment: Cloud kitchen has varied sources of investment depending on the menus served so investment can vary between ₹50,000 - ₹1 lakh.

18. Candy making business

Candy making has a simple business model, and requires only a handful of resources to start. The growth projection is a CAGR of 15.2% by 2029, so it is a highly profitable one.

Resources required:

• Sugar
• Milk
• Liquid glucose
• Citric acid
• Sugar candy manufacturing machine

19. Manufacturing jute bags

Jute bag manufacturing is a great addition to this list of small-scale industry ideas, as starting it requires only a few additional workers and raw inputs such as jute fabric, printing gum, and packaging materials.

Resources required: Jute bags do not always need a machine, they can be made using hands.

Minimum investment: Investment for making jute bags can be much lower, ranging from ₹20,000 - ₹50,000 as a basic start.

20. Rakhi making business

Rakhi business is ideal for women as it involves the skill of intricate weaving and decoration. Rakhi has a surging demand in the Indian market, and in 2024 the growth of Rakhi business is expected to be 20% higher.

Resources required: Better connection with vendors and market research are the prominent starting points in rakhi making business.

Minimum investment: The initial investment for this business is usually from ₹50,000 - ₹1 lakh on average monthly.

Manufacturing Business under 50,000 Investment

Here are some businesses that can be started with an initial ₹50,000 investment directly.

21. Tiffin service

This business is the easiest on the list given the ease of investment and can be started right at one’s own home. For those who have a passion for cooking various food items, tiffin service is a potential business that can be expanded to a large scale.

Resources required:

• Personal kitchen space
• Induction cooktops
• Airtight containers
• Micro-oven
• Supply of fresh vegetables
• Food supply logistics

Minimum Investment: The minimum investment varies from ₹20,000 - ₹50,000 depending on resources used and vendor selected

22. Photography business

Any individual can start this business as a solopreneur. Moreover, with consistency, this business can help one to set up an agency in the long run.

Resources required:

• A camera with better exposure
• Tripod
• Camera jabber
• Reflector
• Professional quality lens
• System with high specs graphics

Minimum Investment: Can be started at a minimum investment of ₹10,000 - ₹20,000

23. Food vlogger

After the rampant increase among food vlogging channels in India, having food vlogging as a business is a lucrative possibility to explore. India is known for its variety of recipes, so any food lover can try out this business.

Resources required:

• Professional motion camera
• A two-wheeler
• Tripod
• Upgraded system for editing videos

Minimum Investment: This business needs cost to travel to different regions and stay, so investment depends on the areas visited.

24. Homemade jewellery

For those who love a creative touch in their business and have an eye for artistic details, starting a jewellery business right from their home is a fantastic opportunity. Jewellery styles can vary between a range of diverse topics, starting from a Bohemian style to a classical Indian style.

Resources required:

• Jewellery pliers
• Gas torch
• Jewellery cutters
• Tweezers
• Polishing paper
• Small crystal beads

Minimum Investment: Can be started with an initial investment of ₹15,000 - ₹35,000.

25. Homemade sweets

Before starting a home-based sweet business, one has to first determine the types of sweets they wish to make, and describe the ideal customers. Various customers prefer various sweets, which may range from sugar-free sweets to specific flavoured sweets.

Resources required: Giant vessels (kadhai), oil extractor machine, cream separator machine.

Minimum Investment: Initial investment can be started with ₹40,000 - ₹50,000.

Factors to Consider While Starting a Manufacturing Business

• Selecting the business industry is the first step. The entrepreneur needs to analyze customer segments by engaging in market research and checking profitability in the chosen industry
• Investing in a manufacturing business will be dependent on the scale of the business, its nature, and the base capital requirement
• The scale of business is vital, which depends on the number of suppliers, areas of export, manpower capacity, and availability of raw materials
• Workforce efficiency is a significant factor, referring to the skill and commitment of the entire working staff
• A sales funnel is another important factor to consider. The channels of distribution, the potential of getting customer leads, and the margin of profit all should be counted.

Steps To Start A Small Scale Manufacturing Business

A small scale manufacturing business can be essentially an advantageous business in less time, as these businesses offer a better prospect of earning. You can easily get higher returns from this business with minimal capital investment. But if you are confused as to how to start with your small scale business solution, you can easily follow these steps to get your hands on some of the initial steps.

Get To Know Your Competitors

The first step in your small scale manufacturing business ideas is to understand your competitors. For this, you need to do a basic competitor analysis along with studying your competitors. For example, let’s suppose you are into manufacturing jute bags. First try to know the major jute bag makers in your region, and their marketing channels. Create fictitious buyer personas that are likely to buy your jute bags, and run an online ad campaign to check their likelihood of buying.

Develop a Profitable Business Plan

To make a sustainable business plan, you have to understand procurement cost, outsource vendors and also understand the marketing channels. Once you are done in creating a profitable customer demography, start to create a profitable business plan. Plan on the logistics channels, plan of operation and maintain transparent financial analytics. Your business financial projections are highly dependent on the levels of cost management, so always focus on building a consistent team.

Look For Funding

You can either look for crowdfunding options, or approach investors in a business summit for pitching your business idea. If your business is a startup in small-scale industry, you can apply for government funding. You can visit the official portal and apply for funding under schemes such as Credit Guarantee Scheme or Startup India seed Fund Scheme.

Set Up Manufacturing Premise

Setting up a manufacturing premise will require you to comply with the governmental regulations. Ensure that you have maintained all the essential systems of construction that meet the safety standards. Also, you will need to have a factory license to develop a proper manufacturing structure. Depending on the overall construction structure, you will be allowed to install your factory and get a license.

Scheme An Optimum Manufacturing Process

The manufacturing process of your small scale industries ideas needs to have a detailed and specific structure before you start it. Plan on the packaging methods, the process of manufacturing and how you can optimize the overall manufacturing time. In addition to that, you also have to prioritize workflow for reducing unnecessary wastage and also accept green manufacturing principles.

Choose Suitable Marketing Strategy

Your manufacturing business can either rely on a digital marketing strategy, or it can follow the route of traditional marketing. Either ways, plan out the steps and recruit a specialist. You can start by creating an online presence and keeping a tab on your competitors. The ways of initiating a marketing strategy can include building a brand presence and creating marketing profiles, and running a marketing ad campaign.

Read also the top zero investment business ideas to start in 2025.

How To Register as a Small Scale Manufacturing Business Owner in India?

Follow these steps below to legally register your small business:

Step 1 - Obtain the DSC Certificate

Whenever you are registering for new small scale manufacturing business ideas, the first step is to apply for an online DSC Certificate. Visit the official portal of DSC, and you will get to see a list of all the Certifying Authorities. You have to reach out to them after successful verification of your identity.

Step 2 - Apply for a Unique DIN

DIN is a compulsory ID attached to every new business director by the Ministry of Corporate Affairs (MCA). For e-application, visit the MCA Registration portal and create an account with your PAN details and personal details. After registration, fill in the DIR-3 Form with your authorized signature and pay the registration fees online.

Step 3 - Apply for Certificate of Incorporation

The Registrar of Companies will verify your DIN number and your business details. This will also include a business audit along with verification of the PAN Card number and DSC Certificate. On successful verification, the Certificate will be issued in the name of the company's directors.

Note that you will need to attest to these documents for successful registration:

• Aadhar Card
• PAN Card
• Memorandum of Association
• Articles of Association
• Passport
• Driving License
• Bank Account certificate
• NOC Certificate from the landlord

Tips to Succeed in Small Scale Manufacturing Business

These tips will help you as a business owner to start your business without burning cash and losing out profits.

Check Barriers to Entry

Always check on the main barriers and checkpoints. Knowing the main challenges will help you to secure funds accordingly.

Inquire on Funding Options

It is wise to first network with business founders and entrepreneurs and inquire about the average funding costs. You can go for crowdfunding, but having an estimate of total funding can let you plan realistically.

Network With Vendors

Your suppliers will determine the challenge of last-mile delivery, so always plan for that. Network with specific vendors, and create a diverse list of vendors to help you out.

Consider Logistics Challenges

Most small businesses suffer from acute cash flow because of logistics challenges. Collaborate with a more reliable logistics partner, and try to build your business unit close to shipping warehouses. This will eliminate any excess cost of freight.

Conclusion

This blog consists of all the profitable small-scale industry ideas. A small-scale manufacturing business is not just easier to start with, it also has the potential to grow into a full-fledged company in successive years. With the right market research and sufficient investment, it can be a good choice for anyone who wishes to be self-employed.

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