Top 10 Manufacturing Business Ideas Under ₹5 Lakhs in India (2025 Edition)

This article is designed as a practical guide for anyone seeking top small-scale manufacturing business ideas with an investment of under 5 lakhs rupees. Aspiring entrepreneurs will find ideas here that are low-risk, easy to start, and full of growth potential.

Why Manufacturing Is a Smart Choice Under ₹5 Lakhs?

India’s economic backbone is built on the strength of its Micro, Small, and Medium Enterprises (MSMEs). MSMEs play a vital role in inclusive growth and job creation across urban and rural India by contributing to over 30% of the country’s GDP, 45% of total exports, and employing more than 11 crore people.

The MSME ecosystem is evolving rapidly, making it an ideal time for aspiring entrepreneurs to enter the manufacturing space. It is mainly due to the supportive government policies and easy access to digital platforms,

Manufacturing has traditionally been seen as capital-intensive. However, the truth is that several low-investment manufacturing businesses can now be started with less than ₹5 lakhs. Thanks to affordable machinery, digital access to suppliers, and simplified production methods.

Emerging Opportunities in Rural and Semi-Urban India

One of the most exciting shifts in recent years is the emergence of rural and semi-urban regions as manufacturing hubs. Entrepreneurs in Tier 2 and Tier 3 towns are now equipped to compete with urban startups due to lower overhead costs, plentiful labour, and increasing internet penetration.

Government initiatives like PMEGP, Mudra loans, and Digital India are empowering individuals from all backgrounds to start their ventures right from their hometowns.

Moreover, local sourcing of raw materials and traditional knowledge in craft, food, and agriculture make rural manufacturing both cost-effective and culturally rich, a great combination for niche markets.

10 Best Manufacturing Businesses to Start Under 5 Lakhs

1. Candle Making

Candle making is a lucrative small-scale manufacturing idea, especially as candles today serve not just religious or functional needs but also decor, gifting, and aromatherapy purposes. This business offers high-profit margins and branding potential with rising demand for premium scented, soy-based, and designer candles.

With a ₹5 lakh budget, you can move beyond a home-based setup to a small-scale production unit capable of catering to boutique stores, bulk orders, and e-commerce platforms.

Candle Manufacturing Cost Breakdown ( Around ₹5 Lakhs)

• High-capacity wax melter (10–20 L capacity): ₹60,000 – ₹80,000
• Candle molds & containers (bulk variety): ₹40,000 – ₹60,000
• Fragrance oils, dyes, additives (bulk): ₹50,000
• Wicks (cotton/wooden) – 1 lakh units: ₹25,000 – ₹30,000
• Branded packaging & labeling: ₹40,000
• Design & setup of workspace (tables, storage): ₹40,000 – ₹50,000
• Branding, logo, photoshoot, website setup: ₹30,000 – ₹50,000
• Staff salary (1–2 helpers for 1 month): ₹15,000 – ₹20,000
• Licensing, marketing, contingency: ₹50,000 – ₹60,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: Conservative estimates can bring in ₹1.5 – ₹2.5 lakhs/month once consistent sales channels are established.

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Agarbatti (Incense Stick) Manufacturing

Agarbatti manufacturing is a time-tested business with widespread use across Indian homes, temples, offices, spas, and export markets. With growing demand for natural, herbal, and perfumed incense, this industry has moved beyond just religious rituals to wellness, meditation, and aromatherapy.

Starting an Agarbatti unit under ₹5 lakhs is not only achievable but highly profitable with the right machines, ingredients, and marketing approach.

Agarbatti Manufacturing Cost Breakdown – Around ₹5 Lakhs

• Semi-automatic Agarbatti making machine (1 unit): ₹85,000 – ₹1,20,000
• Drying trays, mixing drums, basic tools: ₹25,000 – ₹35,000
• Bamboo sticks (bulk): ₹30,000
• Charcoal powder, wood powder, jigat powder: ₹50,000
• Fragrance oils (lavender, sandalwood, rose, etc.): ₹40,000
• Packaging materials (printed pouches, boxes): ₹50,000 – ₹70,000
• Labour setup (1–2 helpers – 1 month): ₹15,000 – ₹20,000
• Branding & basic marketing (logo, photos, flyers): ₹20,000 – ₹30,000
• Shop license, MSME registration, contingencies: ₹25,000 – ₹30,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: With rural labour availability and local sourcing of ingredients, your margins can improve further. Exporting herbal incense or going premium can fetch ₹300/kg or more.

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3. Paper Plate & Disposable Items Manufacturing

With increasing awareness about hygiene, convenience, and sustainability, the demand for disposable paper products like plates, bowls, cups, and dona pattals is booming across India — from street food vendors to caterers, temples, canteens, and even eco-conscious events.

Paper disposables present a low-cost, high-demand opportunity that can thrive in both rural and urban markets. This is due to increasing bans on single-use plastic and a shift toward eco-friendly alternatives.

Paper Plate & Disposable Items Manufacturing – Around ₹5 Lakhs

• Semi-automatic paper plate machine (1–2 dies): ₹1,20,000 – ₹1,80,000
• Raw materials – PE-coated paper rolls, silver foil sheets, dona paper: ₹60,000 – ₹80,000
• Die sets for plates, dona, bowls (various sizes): ₹40,000 – ₹50,000
• Packing materials (bundles, wrappers, sealing): ₹20,000 – ₹30,000
• Tables, storage racks, workspace setup: ₹20,000 – ₹30,000
• Labour (1–2 helpers for 1 month): ₹15,000 – ₹20,000
• Branding, registration, and marketing: ₹30,000 – ₹40,000
• Transportation & contingency: ₹30,000 – ₹40,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: With multiple dies and faster machines, you can scale to ₹4–5 lakh revenue/month in the same budget range.

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4. Handmade Soap Manufacturing

With rising awareness of natural and chemical-free skincare, handmade soaps have emerged as a premium personal care product. Unlike mass-produced soaps, artisan soaps are in demand for their organic ingredients, essential oils, and skin benefits, especially among health-conscious, urban, and boutique consumers.

You can start a small-batch soap manufacturing unit and cater to a growing segment that values quality, aesthetics, and sustainability with a modest ₹5 lakh investment.

Handmade Soap Manufacturing Cost Breakdown – Around ₹5 Lakhs

• Soap moulds, cutters, mixing tools (stainless steel): ₹60,000 – ₹80,000
• Natural oils (coconut, olive, castor, palm, etc.): ₹60,000 – ₹80,000
• Essential oils & fragrances: ₹40,000 – ₹60,000
• Lye (sodium hydroxide), colourants, botanicals: ₹30,000 – ₹40,000
• Packaging: labels, boxes, wrappers: ₹40,000 – ₹50,000
• Branding & photoshoot (logo, design, website): ₹40,000 – ₹60,000
• Workspace setup (shelves, curing racks, ventilation): ₹25,000 – ₹35,000
• Labour (1–2 helpers or part-time): ₹15,000 – ₹20,000
• Marketing, licenses, and contingency: ₹40,000 – ₹50,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: Premium niche brands can command ₹200–₹300/bar with the right packaging and positioning.

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5. Paper Bag Manufacturing

With bans on plastic bags across many Indian states and the rising demand for eco-friendly packaging, paper bags have become a staple for retail, food delivery, grocery stores, and fashion brands. From small kirana stores to high-end boutiques, paper bags are now a necessity, not a choice.

Starting a paper bag manufacturing unit under ₹5 lakhs is not only achievable but highly scalable, especially in urban and semi-urban areas where demand is surging.

Paper Bag Manufacturing Cost Breakdown – Around ₹5 Lakhs

• Semi-automatic paper bag machine: ₹1,50,000 – ₹2,00,000
• Creasing/cutting machine or hand tools: ₹30,000 – ₹40,000
• Raw material: Kraft paper, recycled sheets: ₹60,000 – ₹80,000
• Printing setup (basic screen or offset print): ₹50,000 – ₹70,000
• Packaging & bundling materials: ₹20,000 – ₹30,000
• Workspace setup (racks, tables, tools): ₹20,000 – ₹30,000
• Labour (2 helpers) for 1 month: ₹15,000 – ₹20,000
• Marketing, branding, licensing, contingency: ₹40,000 – ₹60,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: One can easily make ₹50,000 to ₹1,00,000 per month, producing 1000 bags per day.

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6. Spice Powder Manufacturing

India is the largest producer and consumer of spices in the world. With the growing demand for hygienically processed, attractively packaged, and branded spice powders, this sector is ripe for small-scale entrepreneurs. Be it turmeric, chilli, coriander, cumin, garam masala, or regional blends — there’s always a market for quality spice powders both locally and globally.

With a ₹5 lakh investment, you can launch a basic spice grinding and packaging unit, serving local kirana stores, online buyers, and regional wholesalers.

Spice Powder Manufacturing Cost Breakdown – Around ₹5 Lakhs

• Spice grinding machine (10–20 kg/hr capacity:) ₹1,00,000 – ₹1,40,000
• Roaster or drying trays: ₹25,000 – ₹35,000
• Weighing & sealing machine (semi-automatic): ₹50,000 – ₹70,000
• Raw spices (turmeric, chilli, coriander, etc.): ₹80,000 – ₹1,00,000
• Packaging material (pouches, labels, stickers): ₹40,000 – ₹60,000
• Branding, design, photography, marketing: ₹30,000 – ₹50,000
• Labour and rent (if any): ₹20,000 – ₹30,000
• Licensing, testing, FSSAI, contingency: ₹40,000 – ₹50,000
• Total Setup Cost: ₹4.5 – ₹5 Lakhs

Profit Potential: You will make a decent earning of around Rs. 80,000 to Rs. 1,00,000 by selling 600 kg of spices per day. Export-quality masalas can earn even more with FSSAI + ISO certifications.

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7. Customised T-Shirt Printing

The demand for custom-printed apparel, especially T-shirts, is booming thanks to fashion trends, startup culture, gifting, college events, influencer merch, and e-commerce growth. This business thrives on low initial investment, strong branding, and online sales.

With a ₹5 lakh setup, you can start a custom T-shirt printing unit using heat press or screen printing methods and cater to a wide variety of customers, from college groups to corporate clients.

Customised T-Shirt Printing Business Cost Breakdown – Around ₹5 Lakhs

• Heat press machine (or screen printing setup): ₹60,000 – ₹1,20,000
• Sublimation printer/pigment inkjet printer: ₹40,000 – ₹60,000
• Blank T-shirts (stock in different sizes/colours): ₹80,000 – ₹1,00,000
• Transfer papers, inks, screens, dyes ₹30,000 – ₹40,000
• Laptop + basic design software (CorelDraw, Canva Pro) ₹40,000 – ₹50,000
• Table setup, shelves, packaging material ₹20,000 – ₹30,000
• Branding (logo, social media, samples) ₹30,000 – ₹40,000
• Website or online store (Shopify/WordPress) ₹15,000 – ₹25,000
• Labour/Helper or designer support ₹20,000
• Marketing, contingencies ₹30,000 – ₹40,000
• Total Setup Cost ₹4.5 – ₹5 lakhs

Profit Potential: One can make a net monthly profit of ₹90,000 – ₹1,20,000 if you can make 25 t-shirts a day. Corporate bulk orders and influencer merchandise can bring margins of 40–60% per order.

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8. Organic Compost / Vermicompost Production

As organic farming gains traction and chemical-free agriculture becomes a priority, vermicompost and organic compost are in high demand among farmers, gardeners, nurseries, and urban farming enthusiasts. With low input costs and government encouragement for sustainable practices, this business is ideal for rural or semi-urban entrepreneurs.

Starting a vermicompost unit under ₹5 lakhs is practical, scalable, and profitable, especially in areas with access to agricultural waste, cow dung, or food scraps. A 1,000 sq. ft. area can produce 3–5 tons/month, depending on your setup.

Organic Compost / Vermicompost Production Cost Breakdown – Around ₹5 Lakhs

• Land lease/preparation (for 1,000–2,000 sq ft): ₹30,000 – ₹50,000
• Vermicompost beds (brick-lined or HDPE beds): ₹50,000 – ₹70,000
• Shredders, sieves, weighing scale, tools: ₹30,000 – ₹40,000
• Red worms (Eisenia fetida – 300–500 kg): ₹50,000 – ₹70,000
• Cow dung, organic waste sourcing (initial cycle): ₹20,000 – ₹30,000
• Sheds (bamboo or tin roof for shade & rain): ₹50,000 – ₹70,000
• Packaging (bags, stitching, branding): ₹30,000 – ₹40,000
• Licensing, testing, certification (FCO/FSSAI): ₹20,000 – ₹30,000
• Marketing, sampling, social media branding: ₹30,000 – ₹40,000
• Labour, transportation, contingency: ₹40,000 – ₹50,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: You earn anywhere between Rs. 40,000 to Rs. 80,000 by producing 8 tons of vermicompost.

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9. Notebook and Stationery Manufacturing

The demand for notebooks and basic stationery never goes out of style. From schools and colleges to offices and coaching institutes, this sector sees year-round, predictable demand. India’s education sector, rising literacy, and increasing small-business documentation needs make this a stable, low-risk manufacturing business.

With a ₹5 lakh investment, you can start a small-scale notebook and stationery unit, serving local schools, retail shops, and online buyers.

Notebook and Stationery Manufacturing Cost Breakdown – Under ₹5 Lakhs

• Semi-automatic notebook binding machine: ₹80,000 – ₹1,00,000
• Paper cutting and creasing machine: ₹70,000 – ₹90,000
• Paper reams (white + coloured): ₹80,000 – ₹1,00,000
• Cover printing (outsourced or home printer): ₹30,000 – ₹50,000
• Binding materials (glue, stitching wire, boards): ₹30,000 – ₹40,000
• Packaging materials: ₹20,000 – ₹30,000
• Branding, logo, marketing, stationery samples: ₹30,000 – ₹40,000
• Website or online catalogue (optional): ₹15,000 – ₹20,000
• Labour and setup space: ₹30,000 – ₹40,000
• Licensing, contingency: ₹30,000 – ₹40,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: A monthly notebook and stationery sales of 5000 units will fetch you a profit of Rs. 50,000 to Rs. 70,000.

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10. Stapler Pin Manufacturing

Stapler pins may be tiny, but they have a massive market in office stationery, schools, government departments, and packaging businesses. India imports a significant quantity of staple pins, but local production is picking up thanks to Make in India and increased demand for affordable, indigenous products.

With a ₹5 lakh budget, you can set up a semi-automated stapler pin manufacturing unit to serve wholesalers, stationery shops, and packaging material dealers.

Stapler Pin Manufacturing Cost Breakdown – Under 5 Lakhs

• Automatic staple pin making machine (mini): ₹1,20,000 – ₹1,50,000
• Wire drawing machine or ready drawn wire stock: ₹50,000 – ₹70,000
• Raw material (GI wire or steel wire rolls): ₹60,000 – ₹80,000
• Polishing drum & cutter tools ₹30,000: – ₹40,000
• Packaging machine (manual/semi-auto): ₹40,000 – ₹50,000
• Branding, sample development: ₹20,000 – ₹30,000
• Packing material (boxes, plastic wraps, labels): ₹30,000
• Labour, electricity setup, workspace: ₹30,000 – ₹40,000
• Contingency & marketing: ₹20,000 – ₹30,000
• Total Setup Cost: ₹4.5 – ₹5 lakhs

Profit Potential: Monthly sales of 50,000 boxes will bring net profit of Rs. 30,000 to Rs. 40,000

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More Articles on Manufacturing Business:

• Manufacturing Business Ideas Under ₹2 Lakhs
• Manufacturing Business Ideas Under 10 Lakhs
• Manufacturing Business Ideas Under ₹1 Lakh
• How to Start a Manufacturing Company in India
• Top Small-Scale Manufacturing Business Ideas in India

Conclusion: Start Smart, Build Big – Manufacturing Business Ideas Under 5 Lakhs

Starting a manufacturing business in India under 5 lakhs is not only possible but also incredibly promising in today’s economy. With growing demand for “Make in India” products, low-cost machinery, and easy access to government support schemes like Udyam registration, PMEGP, and Mudra loans, you can now turn a small investment into a sustainable, long-term venture.

From candle making and customised T-shirts to vermicompost and staple pin manufacturing, each of these ideas offers high ROI, low entry barriers, and the potential for scalable growth, especially in rural and semi-urban regions. These businesses require minimal infrastructure, basic skills, and smart marketing, making them perfect for first-time entrepreneurs, homemakers, and youth aiming to become self-reliant.

Ready to Start Your Own Manufacturing Business?

👉 Choose an idea that matches your skills, interests, and local demand
👉 Start small, focus on quality, and scale smart
👉 Take advantage of government schemes and digital marketing

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