Top 25 Small Scale Manufacturing Business Ideas in India [Updated 2025]

Despite India’s tariff hikes, Indian businesses seem highly optimistic of their annual growth potential. In 2024, as per the reports of the Press Bureau of India (PIB), the Indian MSME sector witnessed an increase of 20% as compared to the 14% increase in 2020. If you’re thinking of starting a small business in 2025, you don’t need to start with a massive investment or a highly potential idea. You can start off businesses under 10 lakhs too in India, as the respective state government in each state has been supportive of new entrepreneurs and businesses. You will get to know the top 25 small scale manufacturing business ideas to start in 2025, along with tips and strategies.

Also read the top 25 businesses to start under ₹10 lakh in 2025.

Why Start a Small Scale Manufacturing Business in 2025?

The Union Budget 2025-26 has revised the current investment rate from ₹1 crore to ₹2.5 crore for micro enterprises, while ₹25 crore for small businesses and ₹50 crore for medium enterprises. This is expected to boost most of the small businesses in India, and help them achieve exponential growth with years. Thus, 2025-26 is perhaps the best year to start a new small manufacturing business, as the government is already initiating new investment plans for improving the conditions of the small-scale businesses. Here’s why you should start small businesses 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.

Also discover 100 unqiue and creative Sanskrit names for your business.

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.

Also read the top startups in India in 2025.

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.

Ownership

The ownership of a small business is usually limited to a single or two or more owners. The reason for this is that a small-scale business is often started as a solo entrepreneurial or a limited capital business, which later expands to a larger venture.

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.

Dependent On Labour

Most of the small scale manufacturing business are labour intensive, as their nature of work is highly dependent on labour force and manpower. For example, a sugar processing or candle making business is highly dependent on menial labour.

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.

Market Potential: The market potential is $29.4 billion by 2032, with a CAGR of 9.8%.

2. Sanitiser and soap manufacturing

After COVID-19, the market for sanitisers and soap may grow at a CAGR of 6.40% by 2030. 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.

Market Potential: The sanitizer market has a growth potential of 6.40% CAGR by 2030.

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.

Market potential: The market has a potential of $736.9 million or a CAGR of 9.4% by 2030.

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.

Market potential: The pet food market has a potential of growth rate of 11.28% CAGR by 2030 in India.

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

Market potential: Pickle manufacturing has a growth potential of a CAGR of 5.30% by 2033.

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

Market potential: You can expect naphthalene business to reach a market size of $232 million, or have a growth of 3.5% by 2030.

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

Market potential: The expected market valuation of cashew business is estimated at $2.97 billion by 2030.

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

Market potential: By 2030, the market is expected to grow at a CAGR of 1.92%.

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

Market potential: Disposable market business has a rich market potential, as it is expected to grow at $15.9 billion by 2030.

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

Market potential: Total market growth is expected at $2.13 billion, where the projected growth rate is CAGR 4.38%.

Also read the top government business loan schemes for women entrepreneurs in India.

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.

Market potential: The cosmetic business has the potential to grow to $10 billion by 2030.

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.

Market potential: By 2034, the market potential is expected to reach 2.25% billion.

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.

Market potential: Woolen business is another highly profitable business to start in 2025, where the market potential is set to be at $747.68 million by 2033.

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

Market potential: The expected potential of the market is $2.9 billion by 2030, as the market is projected to grow at a CAGR of 13.49%.

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

Market potential: The total market of jam manufacturing is projected to reach a valuation of $15.8 billion by 2030.

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.

Market potential: The Indian cloud kitchen market is a highly profitable small-scale business idea to start with, as the market is expected to reach $1.13 billion by 2030.

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.

Market potential: By 2033, the jute bag manufacturing business in India is expected to reach a market valuation of $204.17 million.

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.

Also read the top zero investment business ideas to start in 2025.

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

Market potential: This business has a global earning potential, as the global market is expected to increase by a CAGR of 10.3% by 2030.

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

Market potential: One can expect high returns on commercial photography business in India, where the growth potential is a CAGR of 10.5% by 2030.

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.

Market potential: Food vlogging is a part of the Indian influencer industry, which has an immense market potential of ₹34 billion by 2026.

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.

Market potential: The global handmade jewellery business is a highly attractive one to start in 2025, as the growth potential is $472.5 billion by 2032.

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.

Market potential: The Indian confectionary market is expected to rise at a CAGR of 5.2% by 2030.

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 right audience for your business, as some cities have better resources and skill supply that align with your business needs. You can try out these cities for starting your small scale business:

• Mumbai
• Gujarat
• Bihar
• Karnataka
• Delhi

Mumbai

Mumbai, a bustling city in 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 government records, Mumbai’s rank has significantly improved from 77th to 63th position as a business friendly city in 2019-20. Some of the small scale manufacturing business ideas in Mumbai are:

Best Small Businesses to Start in Mumbai

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

Bihar

Among many cities in India, Bihar is a promising land to begin your venture. The Bihar startup policy allows any young entrepreneur to opt for a loan of ₹10 lakh without any paying interest for long 10 years. If you’re looking for small scale manufacturing business ideas in Bihar, you can check out these ideas below:

Best Small Businesses to Start in Bihar

• Organic farming and poultry
• Dairy farming
• Food and spice processing firm
• Mushroom farming

Karnataka

The Silicon Valley of India is famous for manufacturing electronic components, biotech products, and warehouse businesses. 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

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 ₹10 crore loan without any collateral for every enterprise, which is a promising start for every entrepreneur looking for a place to start their small business.

Best Small Businesses to Start in Delhi

• Solar panel business
• Bakery business
• Micro food processing
• Electric Vehicle (EV) manufacturing business
• 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 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.

Steps To Start A Small Scale Manufacturing Business

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, if 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.

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 obtain a factory license to develop a proper manufacturing structure.

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 digital marketing specialist. You can start by creating an online presence and keeping a tab on your competitors.

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.

Insure Your Business Director With Covrzy Directors And Officers Liability Insurance

Your small scale business owner takes a massive risk by running an enterprise, because a small claim of mismanagement or any business negligence can bring on financial havoc on your business leader. A Directors and Officer’s Liability Insurance is the perfect option to protect your small scale business owner from such cases of liability claims. This type of insurance provides a secured financial buffer not only for your business, but also for the Director of your business. Connect with Covrzy today to select a personalized insurance plan for your business owner.