The world changed in several ways post the covid-19, so did the manufacturing sector, being resilient to the changes brought in by the pandemic. Though manufacturing suffered from the partial closures of manufacturing units due to the pandemic, it has been very fast in the revival.
The manufacturing sector in India has been growing steadily after the covid second wave. The manufacturing activity registered a three-month high in July. As per the IHS Markit, Purchasing Managers’ Index (PMI) in July 2020 was 55.3, indicating sustainable growth after the pandemic.
The pandemic emphasised the need to increase the manufacturing sector’s contribution to the economy which is currently led by the service sector. This has led many aspiring entrepreneurs as well as manufacturing existing businesses to enter or diversify into the manufacturing business from other industries.
With manufacturing emerging as a potential sector in the post covid world, from this inflection point let us look at some of the best manufacturing business ideas in 2023.
1. 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 2024 to reduce environmental pollution, the demand for ethanol is increasing in the country. 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.
2. 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 Rs. 30 to 60 lakhs, excluding the land cost.
3. Sustainable Packaging
There has been a growing trend towards sustainable packaging due to increasing environmental pollution due to plastic packaging products. The government has also banned the usage of single use plastic, which in turn is increasing the demand for sustainable packaging. Some of the sustainable packaging business ideas include paper packaging, bagasse packaging, banana leaves packaging, etc. It is one of the most viable businesses for MSMEs, which constitute a major part of the manufacturing industry in India. Entrepreneurs with a minimum budget of Rs. 25 lakhs can start a sustainable packaging business.
4. 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 toy manufacturing with plug and play facilities available in the cluster. The minimum budget required to start a toy manufacturing business in India is Rs. 30 lakhs.
5. 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 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 less 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.
6. 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 less, 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 ranges from Rs. 20 to 30 lakhs, apart from the cost of land.
7. Technical Textiles
Technical textiles is a trending vertical in the textile sector. The technical textiles find applications across diverse sectors which include agriculture, automobile, medical, industrial packaging, construction, etc. With the growing industrialization, the demand for technical textiles is increasing in the country. So, technical textile manufacturing is a potential vertical to explore. It can be set up with a cost ranging from Rs. 1 to 3 crore.
8. Pet Food Manufacturing
Pet food manufacturing is another trending business in India. India has more than 3 crore pet animal population. However, India does not have enough pet food production capacity to feed the 3 crore pet animals. India imports around 50% of the pet food from other countries. 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. 20 lakhs, excluding the land and building costs.
9. 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 foods processing is a profitable manufacturing business idea with great scope. It is one of the best suitable business for MSMEs as it can be started with a budget of Rs. 30 lakhs.
10. 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 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 from Rs. 1 to 5 crore.
11. 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 the 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 modules manufacturing is viable for large-scale enterprises, MSMEs can play an important across the value chain as the component suppliers to large players.
12. 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. 50 lakhs.
13. Vegan & Plant-based Food Processing
Today, more and more people are moving towards vegan and plant-based foods. Vegan diet eliminates all animal related foods including dairy products, meat, fish, honey, etc. 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 business can be started with a budget of Rs. 35 to 50 lakhs and there is the best option for MSMEs with limited financial resources.
14. Natural & Organic Cosmetics
The cosmetic industry is full of artificial cosmetics that would cause a lot of side effects. But, the demand for organic and natural chemicals is increasing from 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.
15. Speciality Chemicals
Speciality chemicals are used in various industries such as food processing, pharma, paints, etc. Currently, India mainly depends on imports from China for speciality chemicals. As India is trying to reduce imports from China as a part of the Atmanirbhar Bharat initiative, the speciality chemicals manufacturing domain is booming in the country.
While manufacturing is a sunrise sector attracting entrepreneurs to invest, enter into the sector and starting a manufacturing business is not so easy without help from experts. If you are planning to enter into the manufacturing industry, kindly register with SolutionBuggy and get access to verified manufacturing consultants. Till date, we completed more than 2,000 manufacturing consulting projects across the country.
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.
The budget required to start a manufacturing business varies depending on the product that you choose to manufacture.
MSMEs constitute a major part of the manufacturing industry. They play an important role across the value chain.
Some of the best business ideas under 1 crore are millet-based foods, sustainable packaging, vegan food processing, drone component manufacturing, toy manufacturing, etc.
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.