Incense sticks or “Agarbatti” are in high demand in every corner of India. Every festive and religious event in India requires these 8” – 12” bamboo sticks of fragrance. Naturally, the market demand for aromatic incense sticks is high in the country. If you plan to start a business, manufacturing Agarbatti can be a profitable business option for you.
More than 90 countries in the world use incense sticks for religious and healing purposes, and India is the sole manufacturer and supplier of these sticks. Clearly, starting an incense stick manufacturing business in India is highly rewarding.
Are you wondering how you can start an incense stick making business in India? We have a complete guide for your reference.
Parameters to know for Starting an Incense Stick Making Business
Before you start your Agarbatti making business in India, know the basic parameters of the business plan like the investment cost, expected turnover, profit margin, etc.
A small-scale Agarbatti manufacturing business follows the below parameters-
Capital Investment: Rs. 80,0000 – Rs. 1.5 lakhs
Average Production: 3000 Kg of incense sticks per month
Cost of Manufacturing: Rs. 33 per Kg of incense Sticks
Sell Value: Rs. 100 per Kg of incense sticks
Monthly Turnover: Rs. 3 lakh per month (if you sell 3000 Kg of Agarbattis)
Gross Monthly Profit: Rs. 1.5 – 2 lakhs
Business Planning for an Agarbatti Manufacturing Business
Starting an incense stick manufacturing business any other business requires strategic business planning and market research. Identify your target audience to start the planning. Your business size depends on who your customers are.
Depending on the market you target to cater to, you need to purchase your equipment and machinery to manufacture the incense sticks. If you cater to a small circle of people, you can even start with a home-based business. You can have an expanded business circle if you are ready to invest in commercial Agarbatti production. Follow the below points to plan your business-
- Determine your business budget
- Identify your customers and market competition
- Acquire all permits and licenses to support your business
- Name your business
- Understand the manufacturing process
- Purchase machinery for manufacturing
- Hire employees for business expansion
- Indulge in business promotion.
Import-Export of Agarbattis
As mentioned earlier, the Agarbattis have worldwide demand, and India is the sole supplier of incense sticks. Over 2017 and 2018, India exported more than 500 crores of Agarbattis in Asian countries like China, Japan, Vietnam, etc.
Expanding your business for exporting incense sticks to foreign lands is the best way to make it a profitable option. It is an industry that focuses on export-oriented production. The product cost and initial investment are low in this business. But you can earn about Rs. 500 by selling 100 Kg incense sticks from machine production. Even the Government of India supports the business and reduced the applicable GST to 5%
Licenses and Permits you need for Incense Making
Before you start operating an incense stick manufacturing business, here is the list of licenses and permits you need for the business.
- Company Registration Certificate
- Trade License
- GST Certification
- SSI Registration Certificate
- EPF Registration if you have more than 20 employees in your company.
- Manufacturing Factory License
- ESI registration if you have more than 10 employees
- Pollution Certification
Raw Materials you Need for Agarbatti Manufacturing
Purchasing raw materials for incense stick manufacturing is easy in India. Your production capacity determines the number of raw materials you need every month.
Bamboo forms the base of incense sticks. You can procure bamboo sticks easily from the Indian market. Bamboo sticks are available in the market for Rs. 120 per Kg. If you have the correct machinery, you can make your own bamboo sticks for the Agarbatti base.
Raw materials you need to manufacture Agarbattis are-
- Aromatic components
- Essential oil or natural aromatic oil
- 8” – 12” inches of bamboo sticks
- Options for colour powder like charcoal powder, gum or sticky powder, crude paper Nargis powder, and Jikit Powder
- Sandalwood oil
- Packaging material
Having the raw materials is not enough to manufacture Agarbattis in bulk. You need proper machinery for bulk production.
Agarbatti manufacturing business is a profitable business opportunity in India. Incense sticks have a demand in the global market. One can enjoy a considerable amount of annual profit by expanding the manufacturing business beyond the Indian market. Acquire all necessary licenses and permits and invest in machinery, and your business will flourish in no time.