Top B2B Manufacturing Business Ideas for MSMEs in 2025

The manufacturing sector in India continues to evolve, driven by sustainability, technological innovation, and government initiatives. As we move into 2025, the industry is set to play an even more significant role in India’s economic growth. This blog explores the best manufacturing business ideas in 2025, tailored to aspiring entrepreneurs and existing businesses seeking diversification.

Current State of the Manufacturing Sector

The post-COVID era has reshaped the Indian manufacturing landscape. The Purchasing Managers’ Index (PMI) consistently indicates sustainable growth, with manufacturing contributing significantly to GDP. India’s “Make in India” and “Atmanirbhar Bharat” initiatives emphasize self-reliance, further boosting the sector.

Entrepreneurs can tap into this growing ecosystem with opportunities aligned to emerging trends and sustainability goals. Employment in the manufacturing sector also saw positive momentum, with job creation reaching a four-month high in December. Approximately 10% of surveyed companies expanded their workforce, indicating sustained optimism despite the slight slowdown.

Overall, while the December PMI suggests a moderation in growth, the manufacturing sector continues to demonstrate resilience, maintaining expansion and contributing positively to India’s economic landscape.

1. Bioenergy

Bioenergy, encompassing biomass, biogas, biofuel, and bio-based electricity, presents immense opportunities. With increasing energy demands and sustainability goals, bioenergy solutions are in high demand. For example, the biofuel market alone is projected to grow exponentially, supported by favorable policies and incentives. With investments of ₹1 crore to ₹2 crore, is thriving due to rising demand for biomass briquettes, biogas units, and bioethanol plants, driven by renewable energy goals.

2. Agro-Waste to Sustainable Products

The push for zero waste and eco-friendly alternatives has boosted demand for agro-waste products. Agro-residues can be converted into sustainable packaging, biofertilizers, and bioenergy. With investments of ₹50 lakh to ₹1.5 crore entrepreneurs can convert agricultural residues into biodegradable packaging, organic fertilizers, and bio-based chemicals, catering to the eco-conscious market.

3. EV Components Manufacturing

Electric vehicle adoption is accelerating, and manufacturing EV components such as batteries, motors, and chargers offer lucrative opportunities. Government subsidies and EV-specific policies further enhance the business potential. This sector, requiring a minimum of ₹3 crore, offers opportunities in batteries, motors, and charging equipment, backed by government incentives for electric mobility.

4. Semiconductor Ancillary Business

The semiconductor industry’s growth creates demand for ancillary businesses, including component manufacturing and testing services. The semiconductor ancillary business, with ₹5 crore to ₹50 crore investment, supports India’s growth through silicon wafers and cleanroom materials.

5. Biofuel Production

Aligned with bioenergy, biofuel production supports renewable energy goals. Ethanol blending targets and biofuel mandates drive this sector’s growth. With investments of ₹1 crore to ₹3 crore, continues to grow, driven by the ethanol blending program and renewable energy demand.

6. Nutraceutical Manufacturing

The nutraceutical market is booming due to increasing health consciousness. Nutraceuticals include dietary supplements, functional foods, and health drinks. The nutraceutical manufacturing industry, with investments of ₹50 lakh to ₹1.5 crore, supports dietary supplements, functional foods, and herbal health products, responding to the wellness trend.

7. Electronic Manufacturing Services (EMS)

EMS offers diverse opportunities, from printed circuit boards (PCBs) to device assembly. The growing reliance on electronics across industries makes EMS a profitable sector.

8. Fruit and Vegetable Processing

Processed fruits and vegetables meet the demand for convenience and nutrition. From dehydrated powders to pickles and sauces, opportunities abound. Fruit and vegetable processing, with an investment of ₹50 lakh to ₹1 crore, caters to demand for dehydrated powders, frozen produce, and ready-to-eat meals.

9. Frozen Food Business

India’s frozen food market is growing due to urbanization and changing consumption patterns. Processed foods, ready-to-eat meals, and frozen snacks are in high demand. The frozen food business, requiring ₹1 crore to ₹2 crore, serves urban and export markets with frozen snacks and ready-to-eat products.

10. Aerospace Components Manufacturing

With India emerging as a hub for aerospace & defense manufacturing, opportunities in high-precision parts, composite materials, and drone technology are expanding. This sector, requiring ₹25 crore and above, capitalizes on India’s emergence as an aerospace hub, producing precision-engineered components and composite materials.

11. Heavy Fabrication

Heavy fabrication supports industries such as construction, automotive, and energy. The demand for specialized fabrication services is on the rise. Heavy fabrication, with investments of ₹2 crore to ₹5 crore, supports infrastructure, automotive, and energy projects through custom metal structures and industrial components.

12. Ethanol Manufacturing

Ethanol manufacturing is one of the trending business ideas in India currently. As the government is planning to blend 20% ethanol with petrol by 2025 to reduce environmental pollution, the demand for ethanol is increasing in the country. In order to reach the 20% target by 2025, we’ll need around 1,016 crore liters of ethanol. About 334 crore liters of ethanol will be needed for other purposes. As a result, we must establish a capacity of 1,700 crore liters, assuming an 80% plant efficiency.

Apart from blending with petrol, ethanol is also used in plastic, pharma, cosmetics, and alcohol manufacturing industries. The government recently increased the prices of ethanol in the country to encourage the ethanol manufacturing industry in India. Ethanol can be manufactured from sugarcane, corn, and other food grains. The ethanol production plant with minimum capacity can be started with a budget of Rs. 50 to 80 crores.

13. Essential Oil Manufacturing

Essential oil manufacturing is one of the best business ideas that can guarantee huge profits. These are one of the few products with great demand throughout the year irrespective of the market conditions. They are used in the manufacturing of cosmetics. The essential oils are also used for various medicinal purposes. These oils are extracted from plants through the distillation process. The investment required to start essential oil manufacturing ranges from Solvent extraction – 80L to 1Cr and supercritical extraction – 1.5 Cr to 3 Cr (depending upon the machinery) excluding the land cost.

14. Advanced Packaging Solutions

The demand for sustainable packaging has skyrocketed due to plastic bans and eco-conscious consumers. Biodegradable packaging made from bagasse, banana leaves, or recycled paper is replacing traditional plastics. Pharma packaging is also shifting toward biodegradable blister packs and sustainable vials due to regulatory changes.

Sustainable plastic packaging for the pharma sector addresses regulatory and environmental needs. The pharma packaging sector, with investments starting at ₹2 crore, produces biodegradable blister packs and regulatory-compliant packaging for the growing pharmaceutical industry.

15. Toy Manufacturing

India is one of the major markets for toys in the world. However, the toy manufacturing industry in India is too small to meet domestic demands. So, India imports toys from foreign markets to cater to domestic needs. With the government pushing to boost toy manufacturing in India, the domestic toy manufacturing industry is gaining traction. Apart from the domestic market, there also exist huge opportunities for exports to the international markets. Karnataka houses the first toy manufacturing cluster in India. Entrepreneurs can easily start a toy manufacturing business with plug-and-play facilities available in the cluster. The minimum budget required to start a toy manufacturing business in India is More than 1 crore.

16. Rice Fortification

Fortified rice refers to rice with extra added essential micronutrients to increase its nutritional value. The government recently announced that the rice supplied to people across the country through various government schemes (i.e. fortified rice scheme)  will be fortified to address malnutrition in the country. Therefore, the demand for fortified rice is increasing in the country. However, the current fortified rice production capacity is very low to meet the demand. So, starting a fortified rice manufacturing business is one of the great manufacturing business ideas in India currently. Rice fortification by coating process can be done in a budget of Rs. 30-45 lakhs whereas the rice pellet extrusion method will cost up to Rs. 1.2 crore.

17. Edible Oil Manufacturing

The demand for edible oil has been growing rapidly in India over the past few years with the growth of population. As the domestic production of edible oils is very low, India majorly depends on imports to meet the growing domestic demand. Given the great gap in supply and demand of edible oils in the country, edible oil manufacturing is a profitable manufacturing business idea that can ensure better ROI. Some of the popular edible oil business ideas that can be looked at are mustard oil, sunflower oil, palm oil, coconut oil, etc. The budget required to start an edible oil manufacturing business will be 1 crore and above.

18. Textile Manufacturing

Sustainable Textile Production: The focus on sustainable textiles aligns with environmental goals. Recycled fabrics and eco-friendly processes are key.

Technical Textiles: Applications range from automotive to healthcare, driving demand for specialized materials.

With investments of ₹2 crore and above entrepreneurs can start sustainable textiles and technical fabrics for various industries.

19. Pet Food Manufacturing

Pet food manufacturing is another trending business in India. Around 32 million pets live in India, and their numbers are steadily rising at an annual rate of 11 percent. However, India does not have enough pet food production capacity to feed the 3.2 crore pet animals.

According to forecasts, India’s pet food imports are expected to reach 35 million kilograms by 2026, growing at an annual rate of 3.7% since 2021 when it was at 27.4 million kilograms. The demand for pet food in India has been growing at an average rate of 13.5% per year since 2001. As of 2021, India was the 52nd largest importer of pet food, following South Africa.

The government is also urging the industry to increase production levels. Therefore, pet food manufacturing has emerged as a potential manufacturing business in the country. The business can be started with an initial investment of Rs. 1 crore, excluding the land and building costs.

20. Millet-based Foods Processing

Millet-based foods have high nutritional value. The demand for nutritional foods such as millet-based foods is increasing rapidly after the COVID-19 pandemic. Millets are historically consumed by people in rural areas. However, after the pandemic, millet-based foods have become a preferred choice for all health-conscious people. So, millet-based food processing is a profitable manufacturing business idea with great scope. It is one of the best suitable businesses for MSMEs as it can be started with a budget of Rs. 50 lakhs.

21. Li-ion Battery Assembly Unit

Lithium-ion batteries are an important component of automobiles, smartphones, laptops, etc. Due to the proliferation of electronic devices and the shift towards electric vehicles, the demand for lithium-ion batteries is expected to surge in India. Since India does not have facilities for the manufacturing of lithium-ion batteries, you can go for an assembly unit. The investment required to start a lithium-ion battery assembly unit ranges Starts from Rs. 1 to 5 crore.

22. Solar PV Modules Manufacturing

The solar industry in India currently depends on imports from China and other countries for solar PV modules. To enhance domestic manufacturing of solar PV modules, the government recently announced the PLI scheme for the sector, providing incentives to manufacturers. So, the sector is witnessing huge investments from entrepreneurs. While solar PV module manufacturing is viable for large-scale enterprises, MSMEs can play an important across the value chain as component suppliers to large players.

23. Drone & Component Manufacturing

Even though drones are popular in developed countries, their usage is yet to pick pace in India. The government is keen to provide a boost to the drone manufacturing industry in India. The government recently announced the PLI scheme for the drone manufacturing industry, providing incentives to drone and drone component manufacturers in India. So, drone and drone component manufacturing is a lucrative business in India. The budget required to start the drone manufacturing industry varies from Rs. 5 to 15 crores. However, the component manufacturing for drones can be started with a budget of Rs. 5 crore.

24. Vegan & Plant-based Food Processing

Today, more and more people are moving towards vegan and plant-based foods. A vegan diet eliminates all animal-related foods including dairy products, meat, fish, honey, etc. A plant-based diet does not necessarily eliminate animal foods but focuses on fruits, vegetables, nuts, etc. With people shifting towards vegan and plant-based diets, the demand for these foods is increasing. Vegan and plant-based food processing businesses can be started with a budget of Rs. 35 to 50 lakhs and this is the best option for MSMEs with limited financial resources.

25. Natural & Organic Cosmetics

The cosmetic industry is full of artificial cosmetics that would cause a lot of side effects. However, the demand for organic and natural chemicals is increasing among not just women but also men due to the side effects of artificial cosmetics. So, the manufacturing of natural and organic cosmetics is a profitable manufacturing business idea.

26. Speciality Chemicals

Specialty chemicals are used in various industries such as food processing, pharma, paints, etc. Currently, India mainly depends on imports from China for specialty chemicals. As India is trying to reduce imports from China as a part of the Atmanirbhar Bharat initiative, the specialty chemicals manufacturing domain is booming in the country.

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27. API Chemicals

India’s pharma industry depends heavily on imported Active Pharmaceutical Ingredients (APIs). Setting up an API manufacturing unit can reduce import dependency and increase profitability.

28. Sustainable Paper Manufacturing

The paper industry is shifting toward eco-friendly alternatives, including recycled paper, kraft paper, and biodegradable packaging materials. Single-use plastic bans have further accelerated the demand for sustainable paper solutions.

Profitable B2B Manufacturing Business Ideas for MSMEs

The manufacturing sector offers immense potential for B2B manufacturing business ideas, catering to industries and enterprises rather than end consumers. These business-to-business ideas are designed to generate consistent demand and ensure high-profit margins. With growing government support for MSMEs under initiatives like Atmanirbhar Bharat, small and medium businesses can thrive in this space.

Some of the most lucrative opportunities include contract manufacturing business development, where MSMEs produce components or goods for larger companies, and customized product manufacturing for niche markets. Industries like sustainable packaging, nutraceuticals, and technical textiles also provide high-growth potential with comparatively lower capital investment, making them ideal MSME manufacturing business ideas.

If you’re looking for a manufacturing business plan with high profit margins, consider products in sectors like pharmaceuticals, renewable energy, or advanced electronics, where demand is both high and consistent. Entrepreneurs can further explore specific services like product formulation, process improvement, and plant setup, which add value to the manufacturing ecosystem.

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   6. Supply Chain & Vendor Selection: Ensuring cost-effective procurement.

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Conclusion

India’s manufacturing industry is poised for transformative growth in 2025. The best manufacturing business ideas outlined here align with sustainability and innovation trends, offering diverse opportunities for entrepreneurs. Whether you’re venturing into bioenergy, technical textiles, or frozen foods, the potential for high-profit margins is vast.

Embrace the opportunities, leverage the expertise of SolutionBuggy, and embark on a journey to manufacturing excellence. The future is promising—are you ready to make your mark? kindly register with SolutionBuggy and get access to verified manufacturing consultants.

FAQs

1. What is the future of the manufacturing industry in India?

The future of the manufacturing industry in India looks very optimistic. The government is also taking several initiatives such as Make in India, Atmanirbhar Bharat, etc. to boost the sector.

2. What is the budget required to start a manufacturing business in India?

The budget required to start a manufacturing business varies depending on the product that you choose to manufacture.

3. What are the opportunities for MSMEs in the manufacturing industry in India?

MSMEs constitute a major part of the manufacturing industry. They play an important role across the value chain.

4. What are the best manufacturing business ideas under 1 crore?

Some of the best business ideas under 1 crore are millet-based foods, sustainable packaging, vegan food processing, drone component manufacturing, toy manufacturing, etc.

5. How can I start a manufacturing business?

To start a manufacturing business first, you need to do product identification and market research, following which you can go for plant setup. It is advisable to seek help from a manufacturing consultant to start the manufacturing business.

6. How can B2B manufacturing business ideas benefit MSMEs in India?

B2B manufacturing offers steady demand, bulk orders, and long-term contracts, making it a low-risk and high-profit sector for MSMEs.