How to Start an Agarbatti Manufacturing Business

Agarbattis are incense sticks widely used across the world in households, temples, meditation centres, spiritual homes, spas, resorts, etc. These are long, thin bamboo sticks wrapped in an aromatic paste of scented blossoms with fragrances like rose and sandalwood. The demand for agarbattis is always high and even higher during festivals and celebrations. India is one of the few countries involved in agarbatti manufacturing, fulfilling the demand of around 90 countries worldwide.

Here is a stepwise guide if you are considering setting up an agarbatti business. 

Steps to Start or Expand an Agarbatti Manufacturing Business

Are you wondering how to start and expand an agarbatti-making business in India? These are the steps involved from planning and registration to selling and financing:

Step 1: Planning to Start an Agarbatti Business

Agarbatti making is a lucrative business that lets you make incense sticks with small machinery and little workforce. Given its essential presence in households, holy places, and spiritual establishments, the demand for this item is constant, indicating substantial growth potential for businesses in this sector. 

Agarbattis are in high demand not only in India but also in other Asian countries, including Japan and China. So, exporting them to other countries adds to the business idea's prospects. With little investment, you can focus on building an export-oriented manufacturing unit. Moreover, the initial investment is relatively low, and the profits are high depending on the production volume. Earlier, the applicable GST on agarbattis was 12%, but later the government reduced it to 5%.

When planning to start an agarbatti business, obtain the required licenses, purchase the raw materials, get the right machines, and focus on marketing and distribution to achieve business success with minimal effort and investment.

Step 2: License Required for Agarbatti Business

If you are planning to start an agarbatti-making business in India, you will require the following licenses to operate:

• Company Registration: The first step to starting an agarbatti manufacturing business is registering your business as a company, proprietorship, or ROC.
• GST Registration: GST registration is now compulsory for every business owner. Once registered, you will receive a GST number to sell your products in India.
• EPF Registration: You will need an EPF registration if you employ more than 20 employees in your manufacturing unit.
• ESI Insurance: Get ESI or Employee State Insurance if your manufacturing unit has over ten employees.
• Trade License: A trade license from the local authorities is mandatory for every business owner in India.
• SSI Registration: You may register your SSI unit to get the license, though it is not mandatory.
• Pollution Certificate: The State Pollution Control Board will inspect your manufacturing site and provide you with a pollution certificate to start the agarbatti business.
• Factory License: Large-scale manufacturing units need a factory license and no objection certificate (NOC) to operate in India.

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Step 3: Raw Material for Agarbatti Making Business

Depending on the variety and quality of incense sticks you want to produce, you will require the following raw materials to get started: 

• Jiggat, charcoal, or sawdust powder
• Adhesive gum from litsea glutinosa bark
• White chips
• Perfumes from essential oils
• Masala 
• Bamboo sticks
• Packing materials

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Step 4: Addition of Fragrance in Agarbatti Making

Once the agarbatti sticks are ready, the next step is adding fragrance. Customers usually demand incense sticks with a pleasant aroma. Research the market and find which fragrances are highly in demand, or you can add fragrances according to your retailers' or customers' demand.

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Step 5: Agarbatti Making Machines

Various types of agarbatti-making machines are available in the market. You need to select one according to your budget. These are the available options:

• Manual Machine: Manual agarbatti-making machines are available in single-pedal and double-pedal variants. These are quite affordable, easy to operate and help achieve good production at a reasonable cost. Since these machines work with pedal machines, they do not consume electricity. 
• Automatic Machine: As your business scales up and the demand increases, you may purchase an automatic machine to increase production volume. With the latest technology and automated procedures, these machines manufacture up to 200 incense sticks per minute. Designed to make agarbattis in different patterns, designs, shapes, and sizes, you can choose one according to your requirements.
• High-Speed Automatic Machine: Since these machines are fully automatic, they need less workforce and produce up to 450 sticks per minute. You can adjust the length of sticks from 8 to 12 inches.
• Dryer Machine: In humid working conditions, a dryer machine dries out the sticks to make them workable. Almost all manufacturing units need these machines to make agarbatti in the rainy season.
• Powder Mixer Machine: A powder mixer machine helps make an even mixture of raw materials to make agarbattis. It can mix 10-20 kg of wet and dry powder per minute.

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Step 6: Find Places to Sell the Agarbatti Product

Door-to-door distribution, kiosks, TV and search engine advertising, etc., are some options to sell your incense sticks. Temples, meditation centres, spas, massage centres, and spiritual establishments are the best places to sell agarbatti products. Adopt a wholesale marketing plan to achieve success with your agarbatti-making business.

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How Can a Business Loan Help You Expand an Agarbatti-Making Business?

A Business Loan can help you expand an agarbatti-making business in many ways, including the following:

• Ample loan amount, starting from Rs 3 Lakh, to cover the expenses 
• Competitive interest rates, starting at 14%, to minimise the loan cost
• Flexible repayment terms, up to 60 months, to keep the EMIs affordable
• Easy loan access, thanks to simple eligibility conditions and minimal documentation requirements 
• 100% digital loan procedure for easy and quick access to finance
• No collateral requirements and no usage restrictions3

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How to Apply for the Loan to Expand the Agarbatti-Making Business?

Here are the steps involved in a Business Loan application procedure: 

• Visit the Hero FinCorp website.
• Go to the Business Loan page and click ‘Apply Now’.
• Enter a few details regarding your business and performance.
• Scan and upload the necessary documents.
• Wait for approval.
• Review and accept the loan offer.
• Get disbursal directly into your bank account.

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Conclusion

Agarbatti making is one of the most lucrative cottage industries in India. If you are already in the agarbatti manufacturing business and plan to expand your operations, apply for a Business Loan with Hero FinCorp and receive the required funding without collateral. You can use the loan amount for any business-related purpose without any restriction from the lender. These loans come with ample loan amounts, competitive interest rates and flexible repayment tenures.

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Frequently Asked Questions

1. Is the agarbatti business profitable?

The agarbatti business is quite profitable since incense sticks have a huge and never-ending demand in India and abroad.

2. Which city is famous for agarbatti?

Mysore, Karnataka, is the most famous Indian city for agarbatti production. Its history of making incense sticks dates back to the 17th century under the Wadiyar dynasty. 

3. Is it possible to sell agarbattis online?

Yes, you can build a website and sell your manufactured agarbattis online. You can also use e-commerce platforms for this purpose.

4. Can I use a business loan to market and promote my Agarbatti products?

A Business Loan has no usage restrictions, which means you can use the loan amount to promote and market your Agarbatti products.

5. How do I qualify for a business loan for my agarbatti business?

Check the lender’s eligibility conditions regarding age, business vintage, turnover, etc., to qualify for a Business Loan for your agarbatti-making business.

Disclaimer- The content provided in this document is for informational purposes only. It offers insights into the process of starting an agarbatti making business, potential benefits, and various aspects related to this field. The information is based on general knowledge and industry research. The costs provided are only an approximation, and the actual expenses may vary depending on the scale of your business.