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Pankaj Tyagi
| Updated: 12 Oct, 2021 | Category: Startup India Registration

How to Setup Profitable Soap Making Business in India?

Setup Profitable Soap Making Business in India

The demand for organic or natural homemade soaps has witnessed considerable growth due to massive domestic consumption. Such items come under ‘Organic and natural products and they are free from harmful chemicals and ingredients usually found in conventional soaps. Presently, soap making business adheres to massive growth potential, which is likely to strengthen overtimes. this is a great opportunity for startups who are willing to make their in the cosmetic market.

Why Soap Making Business is a Profitable Venture for Startups in India?

Natural and Organic soaps are quite popular among Indian consumers, and their demand is escalating at a healthy rate. Most Indian consumers prefer Organic soaps over their conventional counterparts due to their health-related benefits.

Soap market is quite massive and versatile that render wide portfolio of product to the end-users. Considering the current scenario, the demand for organic soap is thriving rapidly and start-ups can opt to venture into its production and secure healthy profit. Growing inclination of end-users toward the chemical-free soap is luring more and more entities to engaged into organic soap business.

Indian soap market attained the valuation of $ 2.9 billion in FY2020 and is projected to cross $ 4.4 billion by 2026 owing to the increasing focus on maintaining optimal hygiene & increasing disposable income of the end-users. Another key factor is the recent outbreak of the Covid-19 pandemic, which has compelled the masses to adopt new hygiene protocols such as frequent hand washing and hand sanitiser. 

The soap market in India is segmented based on application (Laundry, Beauty Soaps, Laundry, Kitchen, Perfumed, Distribution Channel, Medicated Soap, Form (Liquid, Solid), Perfumed Soap, Personal Soap, Personal Soap, organic soap, and others.

 The beauty soap market holds a prominent market share in India, accounting for 50% of the market. Medicated soap segment also seeing healthy growth in India, primarily owing to increasing awareness about the pros that medicate soaps can have for various skin types. The future for the organic soap market seems increasing bright owing to increasing health concern among the masses.

Investment required to kick-start Soap making business in India 

The overall investment that would be needed for commencing your Shop making business in India is as follows. The investment would vary in accordance with the type of product and industry you choose. As per the present scenario, one can start a soap-making business with a minimal investment of 1 lacs rupees. This investment figure is perfect for starting a small scale production unit.  

Read our article:How to Setup a Profitable Meal Prep Business in India?

Steps for Commencing Shop making Business in India

The following section of this write-up shed light on the practical roadmap for setting up soap making business in India.

Step 1: Procure land to set up a production facility 

The area of 300 sq ft is more than enough to kick-start the handmade soap production in India.

Step 2: Identify Trusted Vendors to Procure Apt Machinery and Raw material for soap making 

Common production equipment required for Shop making business

Double Boiler or, 

 B. A microwave 

 C. Soap moulds 

 D. Container for pouring

Apart from that, you would also need to procure personal protective equipment such as gloves, eyeglasses, etc., to ensure workers’ safety at the production facility.

Common raw materials required to kick-start handmade shop production; 

Common raw materials required to kick-start handmade shop production

Post-production raw material 

  • Wrapping sheets 
  • Plastic wraps 
  • Printer 

Mandatory Legal Requirements for Commencing Soap Making Business in India 

Following are the fundamental legalities that one needs to address for commencing soap making business in India;

Company incorporation

The company incorporation is a legal procedure that is utilized forms a corporate establishment or a company. An incorporated entity serves as an independent legal establishment on its own, recognized by the law. These entities can be acknowledged with the terms like ‘Inc’ or ‘Limited’ in their names. It becomes a corporate legal establishment entirely separate from its owners. You can obtain company incorporation from the Ministry of Corporate Affairs[1] (MCA) after filing an e-form, viz Spice+ on the official portal. The said form is divided into two parts, i.e. Part A and Part B. 

Clearance from Drug Control Board 

A drug license refers to a legal consent granted by GOI for businesses that intend to operate in the drug and cosmetics sector. The Food Safety and Drug Administration Department of the respective state confers the drug license to the eligible applicant. The drug license mandates cosmetic manufacturers to stay in line with norms laid down by the Drugs and Cosmetics Act. 

NOC from Pollution Control Board 

No-objection Certificate from SPCB serves as legal consent for entities that pollute the environment through their operation. One can visit the State pollution board website to apply for this license. During e-filing, the applicant is required to upload the following document 

  • Company incorporation certificate
  • Detailed drawing of the production facility signed by concerned official
  • Details of Equipment available at the facility 
  • Detail of raw material used for the soap production
  • Detail of DG sets used to power the production facility

Trade License 

A Trade license is a legal consent granted by the local municipality of the respective State government. It permits the entity to commence the business undertaking in a particular area or location. The entity that avail the license is obligated to comply with the underlying norms of the trade license. Trade license mandates the business owners to ensure complete adherence to ethical trade practices and respect the interest of the people associated with the business. 

Additional licenses for Soap manufacturer in India; 

Conclusion

The Indian soap market is projected to witness healthy growth in near future. The increase in per capita incomes, improved awareness amongst the masses pertaining to the significance of proper hygiene, and improved investments by prominent players toward the R&D of newer & better products are all elements that extend the size and enhance the value of this industry. 

Read our article:How to Setup a Profitable Biscuit Making Business in India?

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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