Seven Best Profitable Small-Scale Industries in India

Introduction

Are you one of the millions of people who spend hours daily dreaming about how it would feel to resign and start their business venture, where one can enjoy greater autonomy and be people’s boss? Though this seems like a pleasant idea to think about, the reality could be strikingly different from the dream, and one could end up losing money and causing himself/herself tremendous stress. Hence, before selecting a potential industry for a business, you must carefully consider the options.

Small-scale industries in India are among the potential industries that operate on lower capitals, manpower, and machinery, contribute largely to the Indian GDP, and at the same time, provide wonderful opportunities to budding entrepreneurs. With the enactment of the Small, Medium, and Medium Business Development Act in 2006, small-scale industries have been increasingly getting support from the government. Small-scale businesses in India can also take advantage of business loans. One can apply for online business loans or benefit from government loans, such as a Mudra Loan. These business loans without collateral are easily accessible to small businesses. So, what are small-scale business ideas in India? Which is the most profitable business in India? How to start a small-scale industry business in India? In this article, we will discuss the seven best profitable small-scale industries for business in India.

Incense Sticks (Agarbatti) Manufacturing

Incense sticks or agarbattis are long, thin bamboo sticks covered with an aromatic paste extracted naturally from plants and trees. They are mainly used as part of cultural and religious practices and are highly demanded in India. India is the largest producer of incense sticks, and this commodity has huge market potential in India as well as abroad. It is one of the most profitable businesses in India that one can start from home with a small amount of investment and the help of machines. India largely exports incense sticks to Asian countries, mainly China and Japan. India also exports to countries like the UK, USA, and many Middle Eastern countries. These incense sticks are widely used as fragrances to refresh the surroundings at resorts, spas, and hotels.

Starting an incense sticks manufacturing business requires a small space that could accommodate machines, a small investment capital that one can get from unsecured small business loans, and other ingredients for the aroma, which are easily available in the market. Hence, with a profitable market in India and abroad, incense sticks manufacturing is probably the best small-scale business in India.

Papad and Snacks

When a question is raised about which business is more profitable in India, one idea that comes to everyone’s mind is businesses in the food industry. Papad is part of almost every Indian meal and is widely popular in Indian households. It is a roasted or fried, crispy, round, thin disc-like edible item usually made from wheat and rice flour. Apart from daily consumption in households, it is an essential part of the menu at restaurants, hotels, parties, and functions.

The government also provides business loans for women at attractive interest rates. One can even start a papad-making business from one’s home. Generally, the ingredient required is flour, oil, and spices. There are a variety of flours, including wheat, rice, chickpea, etc., used in different proportions according to the taste and preferences of the consumers. Today, one can produce papads on a large scale in less time with the help of an automatic machine. It is more profitable compared to hiring manual workers. By focusing on the supply chain and approaching potential buyers, such as hotels, restaurants, hostels, households, hotels, and small groceries stores, one can easily make this business highly profitable in India.

Handmade Chocolates

Chocolate is the most loved food item across the world and is consumed by all, irrespective of age. Different types and varieties of chocolate form an integral part of functions, celebrations, and especially festivals. During festivals, people tend to give chocolate gift hampers to their near and dear ones. One can capitalize on people’s, especially children’s, love for chocolate to build a profitable business.

India is one of the top consumers of chocolate, with an estimated market value of close to $2 billion, and is expected to grow rapidly in the future. There is a huge demand for homemade chocolate among people in India, as these chocolates are healthier, tastier, and devoid of chemicals. One can start a homemade chocolate-making business in the kitchen of their home. Essential preparation for business includes procuring raw material, packaging, and supply chain for delivery. Since people like chocolates of different flavors, tastes, and textures, demand would never be a problem. The potential export market includes countries such as Indonesia, Turkey, UAE, Saudi Arabia, Brazil, etc. For export business, one can take unsecured business loans available for small-scale businesses.

With growing online platforms, one can sell chocolates through online channels along with offline channels, and even door-to-door selling is an option. Lastly, one needs to focus on maintaining quality and customizing the product to suit the tastes and preferences of their target groups. This would ensure a consistent and profitable business.

Coconut Oil

Coconut is a very popular plantation across the world and is grown in more than ninety countries. India is one of the largest producers and consumers of coconut globally. Coconut trees are mainly grown in coastal areas and the southern states of India, especially Kerala. One of the products of coconut is coconut oil. In addition to being used as hair oil or cooking oil, it has a wide variety of industrial applications in cosmetics, personal care products, medicines, etc. Coconut oil is extracted from ‘Copra’, which has a high oil content. The wide application of coconut oil in markets and households makes it a highly profitable business in India. One can start with a small rented space, a small investment, and coconuts in the form of raw materials.

The domestic market for coconut oil, which can be used as a finished product as well as raw material for other products, is booming. There is a rising demand for virgin coconut oil from the USA and European countries. With proper quality control, logistics, and supply chain, businesses can earn huge profits from foreign markets through exports, thus making it a highly profitable small-scale business.

Organic Soap

Soap is a product of daily hygiene and is used by everyone across the globe. With the increasingly harmful effects artificial and chemical soap has on human skin as well as the environment, people are shifting to organic soaps. Organic soaps are made up of ingredients extracted directly from nature and are gentle to the skin and the environment. The global market of soap is worth more than $35 billion, and it is one of the most profitable businesses. Soaps are required on a large scale by the hotel industry as well. There is a shift towards adopting a green lifestyle, especially in European countries, and there is a huge market abroad for Indian manufacturers.

To start an organic soap business, raw materials such as oil, natural extracts for fragrance, lye, glycerine, etc., are required. Apart from raw material, a small investment is needed to purchase machinery and set up a place for manufacturing. Businesses could sell it through departmental stores, online platforms, door-to-door selling, or supply directly to hotel chains. With a robust business plan and selling strategy, organic soap manufacturing could be the best manufacturing industry in India in terms of profit-making.

Handicraft and Handloom

The handicraft and handloom industry in India is one of the oldest and largest in the world. Since ancient times handloom and handicraft making was a thriving force for the rural economy of India, employing a large number of people. With rapid globalization, the market and intrinsic value of handlooms and handicrafts increased, and today there is a huge demand for handlooms and handicrafts in foreign markets. Handicrafts are used for decor in homes, hotels, commercial spaces, restaurants, etc. Since, traditionally, handloom and handicraft making has been handmade crafts, the value of an original craft is high.

With financial and other support schemes such as Make in India and loans for MSME industries from the Indian government, this traditional art, an intrinsic part of our culture, is being revived and expanded on global platforms. Not much investment is required to start a handicraft and handloom business, as businessmen are merely a part of the supply chain with access to a larger number of markets. People are increasingly taking an interest in buying handmade crafts and handlooms rather than machine-made artifacts. Therefore, by effectively collaborating with small and distinct artisans groups, both businesses and artisans can prosper.

Candle and Wax Products Making

Candles are sticks coated with wax and are used for a variety of purposes. They are used as part of home decor, for religious purposes, during festivals, by restaurants, hotels, and spas to enhance the ambiance, and for various other purposes. Since candle as a commodity is required almost throughout the year on multiple occasions, it has a highly profitable market.

Therapeutic and scented organic candles have a huge, profitable market in foreign countries such as Thailand, Malaysia, Vietnam, China, the USA, Japan, etc. Due to religious practices, India is the perfect domestic market for a profitable business in organic candle-making. Organic candles, being environment friendly, are largely preferred by consumers over artificial candles. You could easily start an organic candle-making business, as all you need is thread and wax as raw material and a small investment in machinery for efficiency. Hence, with the easy availability of raw materials and access to profitable domestic and international markets, organic candle-making is one of the best small-scale business ideas.

Conclusion

As Indian domestic markets are increasingly becoming global and the economy is prospering, one could enjoy the fruits of these changes by entering into profitable businesses and making strategic business plans. Therefore, through a calibrated approach and proper business planning, one could tap into these highly profitable business industries and contribute to nation-building. You can also read how to start a small scale business.