Do You Know What Industry to Go Into If You Want to Set UP Your Own Small Business in India?

small scale industry

Almost everyone has dreamt of starting his or her own small business, and this is especially true in India. When you start your own business selling any product or service imaginable, you are essentially entering into a small scale industry. Now that Narendra Modi has initiated policies that have unleashed ‘startup India,’ many Indians are eager to start their own businesses – from the local candy shop to the manufacturing firm. They need small scale business ideas to do so. Some of these are to open up a chocolate shop or a store selling toiletries. 

The small scale industry in India

India’s economy is booming and the middle classes are exploding. This has created an entire swathe of the Indian population who has access to inexpensive capital and who are ambitious and eager to make money by starting their own small businesses. The statistics speak for themselves. India is indeed living up to Mahatma Gandhi’s vision of being a country of self-reliant small businesses and cottage industries. For the past 50 years, many ambitious Indians have started small businesses in any and every industry and niche imaginable. 

Approximately 40% of India’s manufacturing output comes from India’s small scale industry. Approximately 95% of businesses in India are in the small scale industry. The same is true of exports. Approximately 35% of India’s exports are produced by businesses in the small scale industry. Additionally, Indian small businesses employ four out of five employable Indians. 

Small scale business ideas

Most middle-class Indians who have the entrepreneurial spirit and have been bitten by the entrepreneurial bug’ have access to small amounts of capital which rarely exceed INR 10,000. They want to start up a small business using ideas which are small but scalable. Some small scale business ideas that will easily work for them are:

  • Travel agency
  • Mobile recharge shop
  • Breakfast restaurant
  • Coaching centers
  • Shops selling fruit juices
  • Making clothes
  • Online bakery
  • Blogging
  • YouTube channels
  • Event management
  • Wedding consulting

Small scale industries in India

Now that the small scale business ideas have been mentioned, it’s time to discuss the ways in which small scale industries in India operate. Some small scale industries in India are the following:

  • Travel
  • Recharging mobile phones
  • Online bakery
  • Event management
  • Wedding consultant

Travel

As the middle classes have exploded with India’s booming economy, more and more people have the money, time, and desire to explore well-known sites in their own backyard and abroad. They are increasingly seeking out travel agencies and travel agents to assist them in this. More Indians with access to some capital are turning that spare bedroom into a home-based travel agency. 

They find that the best and easiest way to do this is to partner with an established travel agency and become an independent agent or broker. This is the easiest way to obtain a travel agency license and to be recognized as a legitimate player in the travel industry. The agency they are representing has staff who will do the admin and clerical work for them, leaving them with the hard job of selling various travel packages. Most people who set up a home-based travel agency recover their initial investment (which is generally INR 10,000) in 2-3 months.

Recharging mobile phones

Indians have among the highest saturation of smartphones in the world, and this is especially true in rural areas. Since pay-as-you-go phone plans are the most affordable and economical, they are the most popular with Indians. Most Indians prefer to recharge their smartphones at a mobile phone recharging shop. A lot of Indians with some extra money lying around are capitalizing on this by leasing small offices and starting their own mobile phone recharge shops. 

They only need to pay a few hundred rupees a month for rent and for alliances with all of the major and minor mobile phone companies in India and around the world. These phone companies charge an association fee, but the mobile recharge shop owners keep most of the revenue. They can easily recover their initial investment and rent fees within a couple of months.

Online bakery

As India’s middle class explodes, more and more people are moving to the big cities and leading very busy and mobile lives.  The urban, modern Indian woman no longer has the time to spend hours in the cooking as her mother and grandmother did. Many Indian entrepreneurs are capitalizing on this by starting online bakeries. Since these bakeries tend to be home enterprises, they require very little investment – sometimes as little as INR 2,000. These bakeries more than pay for themselves in a few months and attract a huge following and loyal customer base.

Event management

This is the perfect business for Indians who are outgoing and like to spend lots of time ‘on the road meeting different people!’ A large component of this small scale industry is networking, researching and managing different venues, finding and meeting sponsors, and scheduling performances. People who are good at talking with and listening to people and who are brand and image-conscious will love this industry. They can easily set up a home-based event management business with little capital. Also, because the business will be entirely online, they can use effective, low-cost (or free), and popular digital marketing ideas, concepts, techniques, and campaigns to promote and market their businesses.

Wedding consultant

People who are even slightly familiar with Indian culture know that all Indians take marriage seriously. Weddings are grand, huge, and long events for this reason. Anyone who knows the marriage market and wedding patterns of the different ethnicities and cultures in India can set up a home-based business as a wedding consultant. He or she can start by advertising by word of mouth and support that with organic social media advertising. All that is needed is a strong online presence, a good website, and a strong presence on social media. The good news is that excellent websites are very inexpensive to create, host, and maintain.

Some Indians have more access to capital and want to start their own manufacturing businesses. Some good manufacturing business ideas in India lie in making sanitary napkins or wooden toothpicks. Other good manufacturing business ideas include making paper plates and candles. These are popular business ideas because they require very little capital to start up, they are easy to make, and they are basic and essential items – therefore they will always be in high demand.

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However, since Indians are very creative and versatile, they have been inspired by success stories in the West and other developed countries and have come up with their own manufacturing business ideas in India. There are literally hundreds of these ideas online for Indians wanting to start up their own small-scale enterprises, so only a handful will be discussed in detail. 

Some of the more popular manufacturing business ideas in India are:

  • Incense stick manufacturing
  • Making aluminum doors
  • Establishing a physical or online bakery
  • Manufacturing banana wafers

Incense stick manufacturing

Incense sticks are a stick that emits a fragrant smell when burned.  They are very popular in India where they are referred to as ‘agarbattis.’  Since Indians are very traditional and religious-minded people, they are commonly used in various religious functions, especially in poojas.  Indians use incense sticks in social functions as well as at weddings or in formal parties. Its usage in India goes back several millennia – back to before Vedic times.  Interestingly enough, many Indians have found agarbatti effective in driving away mosquitoes and other harmful insects, and in healing open wounds and sores.

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Making aluminum doors

Since this industry has very low barriers to entry and requires little capital to start a business, many Indians are starting their own companies that make aluminum doors.  Most people in this business find that all that is needed to be successful is some business acumen and experience and basic knowledge and understanding of engineering.

Establishing a physical or online bakery

Since Indians can start this business in their home office, it is a very popular manufacturing business idea.  They don’t need lots of capital or business knowledge to successfully set up an online or physical bakery.  All they need is some understanding of logistics, transportation, bookkeeping, business, and baking to succeed.

Manufacturing banana wafers

Banana wafers are made out of unripened banana slices which are dipped in a type of sugar syrup and then dried under the Sun.  Obviously, anyone with some business acumen, capital, and a little extra space can set up this type of business. This product has huge domestic and international demand, so the export opportunities are huge!

People who want to start up small scale industries in India have the funds and ideas to be able to do so.  With any luck, the middle classes could get a big boost by ‘startup India!’

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