Two-wheeler helmets are used by scooter and motorcycle riders. Such helmets aim to safeguard the rider’s head during an accident, thereby mitigating any chances of head injury & saving the rider’s life. India is a global leader in the two-wheeler market and also has the upper hand in the motorcycle & scooter helmets market. Every year, more than 20 Million two-wheelers are sold in India, indicating the prowess of India’s helmet industry. There is a lot of scope for growth and success for startups in the ever-rising helmet market in India. If you plan to kick start your business journey as a helmet manufacturer, this blog is for you. This write-up covers all facets of the Helmet manufacturing business, including establishment procedure, legalities, scope, and market potential.
What makes the helmet manufacturing business enticing for startups in India?
- The helmet sales pan India has increased at a CAGR of 10 per cent till the year 2019. The market is expected to rise at a healthy CAGR from the fiscal year 2019-2024.
- India has now become a world leader in terms of market size.
- After the first quarter of 2021, the two-wheeler sales have been raised by 32% Y-o-Y to 6.7M units.
- Covid-19 has hampered the economy quite badly, but it has also given a chance to foster innovation. The advent of coronavirus has triggered the production of safety goggles, face shields, and masks. This actually helps helmet manufacturers to augment their product portfolio.
- Even in the post-covid phase, most people are reluctant to travel via public transport.
- This has boosted the sale of two-wheelers in India, and it continues to grow further, which indeed is good news for helmet manufacturers.
- With the advent of new government norms, the demand is likely to surpass the prevailing figure by a significant margin. The new policy of banning non-ISI certified helmets will let organized entities experience increased demand
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Steps to set up legally sustainable helmet manufacturing business in India
The section below entails a detailed snapshot of the procedure of establishing a legally viable helmet manufacturing business in India:
Step 1: Register your Business
Firm registration or company incorporation is the process of legalizing the business entity. This can be done by selecting apt business form as mentioned below:
- Private Limited Company
- Limited Liability partnership
- Partnership firm
- One person company
These business forms are pretty popular in the business fraternity because of their flexibility and the countless benefits they offer to the business owner.
Important points to keep in mind:
- Companies Act, 2013, governs the business structures like private limited Companies and OPC. The entity seeking to convert into these business forms need to apply electronically on the MCA’s website via an e-form known as SPICe+.
- The business forms like Partnership firms and LLP are regulated by Partnership Act, 1932 and LLP Act, 2008, respectively.
Step 2: Secure land and Set up a production facility
- To set up a small scale unit for helmet manufacturing business, you need to arrange land that measures 1000 to 3000 Square feet.
- Coming to the machinery, the small scale helmet manufacturing business usually leverages the following equipment to complete the production process:
Plastic Injection Molding Machine: this machine will cost you around 20 lacs Indian rupees.
Helmet moulds: New Helmet Mould comes with a price tag of 4 lakh rupees.
Helmet testing machine: This machine is used to test the finished helmet for quality. It will cost you around 15-20 lacs.
Step 3: Secure the BIS certification
This BIS stands for the Bureau of Indian Standards & is the government certification institution that functions under the aegis of the Indian Ministry of Consumer Protection, Food & Public Distribution. On Apr 1, 1987, the BIS superseded the Indian Standards Institution (ISI). BIS is regarded as the main certification body in India and plays a vital role in the standardization of Indian quality standards. Further, this institution is accountable for the number of vital certifications in the Indian market.
BIS certification is a tedious and time-consuming process that entails the following steps:
- Online Application Filing
- On-site visit of BIS officials
- Sample selection by BIS officials
- Sample testing by BIS certified lab
- Report generation
- Grant of certification
BIS certification is granted after comprehensive product testing and on-site inspection of the plant. The rejection rate for this certification is relatively higher than any other certifications; thus, it is recommended to hire a professional and approach accordingly.
Step 4: Avail the Factory licence
According to the Factory Act, 1948, it is a legal compulsion for the factory owners to avail factory license for their premises from the local government authority before commencing the business operation. The Chief Inspector of Labour Commissioner has the required authority vested by aforesaid law to grant this license.
Step 5: Obtain the Consent from State pollution board
Any entity that hampers the environment through its operation in one way or another has to avail consent from the State Pollution Control board, aka SPCB. The applicant can avail this consent by filing an online application on the State pollution board’s website. During online filing, the applicant is required to upload the following documents
- Firm registration
- Floor plan of the Manufacturing facility
- List of equipment along with their power rating
- Detail of Diesel generator powering the facility ( power rating)
Step 6: Get the Import Export Code and MSME registration
Import Export Code, broadly known as IEC, is a ten-digit identification code that legalizes the business of export and import in India. According to the Foreign Trade Policy, every exporter and importer in India are mandated to avail of IEC from the DGFT’s portal.
MSME registration is a voluntary certification that aims to foster the growth of small businesses through various incentives and schemes. MSME registration, aka Udhyam Aadhaar registration, can be availed online via the official portal viz Udhyam Aadhaar against the fundamental documents such as Company and owner’s PAN.
Once you secure the licenses above, you can commence the operation in view of the BIS guidelines as mentioned below. Every helmet manufacturing business should take these norms into account before initiating the production process:
- The helmet shall not compromise the rider’s ability to hear and shall conform to the underlying BIS requirements mentioned in 9.5.
- The material used in the production of the helmet shall not pose any health-related risk to the users.
- No component shall be fitted to the helmet unless it is designed in such a way that it shall not endanger the rider’s life.
- The helmet shall undergo testing for its sound attenuation properties by the method available in Annex G of the BIS standard. The sound transmission loss should not exceed 10 dB over the frequency range 250 to 2000Hz.
India two-wheeler helmet is expected to experience a double-digit growth rate due to increasingly stringent norms for both riders & manufacturers of helmets in India. With improved awareness of safety and increased per capita income, the sale of two-wheeler helmets is projected to continue thriving in India in the coming years. The new norms from the Indian government about banning non-ISI helmets will only boost the sales for organized helmets manufacturers. All in all, the future of the helmet manufacturing business in India seems remarkably bright that will entice more and more start-ups in the coming years.
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