§1What this business is
Powders (white chips, gigatu, charcoal) are mixed with water into a paste and rolled onto bamboo sticks, by hand or on an automatic machine; the raw sticks are dried. Perfume diluted with white oil or diethyl phthalate is applied by dipping, and the sticks are packed in bags and cartons. It is a labour-intensive cottage industry that runs in villages and towns and also exports.
Capacity: 60 kg a day (10-hour shift); 18,000 kg a year at full capacity (report plans 60% in year 1 to 90%).
§2Is it right for you?
Who it is for
A rural or small-town entrepreneur, women's group or family business that can manage a small team and local sales.
Who it is not for
Someone wanting big profits fast without building a brand.
Advantages
- Low investment — ₹7.57 lakh
- Steady demand from homes, temples and festivals
- Simple technology that works in rural areas
- Gross margin about 28–30%
Drawbacks
- Crowded market with many cheap brands
- Selling to resellers keeps the margin with traders
- Building your own brand needs marketing money
- Quality depends on perfume and raw-stick quality
Skills you need
- Paste mixing and machine rolling
- Perfume blending
- Packaging and branding
- Selling to wholesalers and shops
Why difficulty 1/5: Small money, simple machines and a well-known product.
§3Market
Who buys
- Households
- Temples and religious functions
- Exporters
How it sells
- Resellers and wholesalers
- Own brand through retail shops
Good to know
- The report says about 75% of agarbatti made is cheap charcoal-based quality.
- Agarbatti is named in the report as an export-oriented item.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| High-speed automatic agarbatti making machine | 1 | ₹1.45 lakh |
| Automatic dhoopbatti making machine | 2 | ₹2.70 lakh |
| Powder mixing machine | 1 | ₹0.30 lakh |
| Other accessories and tools | — | ₹0.31 lakh |
| Packing, GST etc. | — | ₹0.94 lakh |
From: PMEGP sample project report — Incense Sticks (Agarbatti) Manufacturing (prepared by Udyami/Samadhan)
- White chipsabout 40% of a typical masala mix
- Gigatuabout 20%
- Charcoal powderabout 20%
- Aromatic chemicals and essential oilsabout 20%; perfume diluted 1:3 with white oil or diethyl phthalate
- Bamboo sticksall raw material costed at ₹40 per kg of agarbatti
From: PMEGP sample project report — Incense Sticks (Agarbatti) Manufacturing (prepared by Udyami/Samadhan)
Suppliers in Building Business Bazaar
Balaghat Incense Products Cluster · Balaghat →Bamboo Value Addition And Zero-Waste Agarbatti Cluster · Seoni →Bhandaripokhari Agarbatti Cluster · Bhadrak →Bolagarh Indigenous Agarbatti Cluster · Khordha →Imperial Agarbatti Processing · Ahmedabad →Incense Stick And Capmhor Cluster · Ujjain →Koderma Agarbatti Mini Cluster · Koderma →Yadgiri Agarbatti Cluster · Yadgir →Fragrance & Flavour Development Centre (FFDC), Kannauj · Kannauj →MSME Technology Centre, Imphal · Imphal →Bamboo Incense Stick Making Cluster, Kakopathar · Kakopathar →
§5Licences & registration
- Udyam
- GST
- Trade licence
- Legal Metrology registration for packaged goods
- Trademark for your brand (optional)
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
PMEGP (report shows KVIC margin money 15–25% urban, 25–35% rural); at ₹7.57 L it fits a MUDRA Kishore loan; CGTMSE for collateral-free cover.
§7Money
How the investment is worked out: Plant & machinery ₹5.70 L (high-speed automatic agarbatti machine ₹1.45 L, 2 automatic dhoopbatti machines ₹2.70 L, powder mixer ₹0.30 L, accessories ₹0.31 L, packing/GST ₹0.94 L) + furniture ₹0.25 L + working capital ₹1.62 L = ₹7.57 L. Finance: own ₹0.76 L, term loan ₹5.36 L, working capital ₹1.45 L. Premises owned or leased.
Working capital: Working capital ₹1.62 L, of which ₹1.45 L is bank finance; 15 days of finished goods and 30 days of raw material.
Year not printed on the report — check current machinery prices. The sample is written for a unit that already owns 5 machines and is expanding.
§8Export potential
The report prints no HS code; confirm the ITC(HS) line with DGFT before exporting.
§9Risks — where people fail
- Price competition
- Bamboo stick supply and price
- Damp weather spoiling stock
- Dependence on a few resellers
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working agarbatti (incense stick) making unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (Udyam, GST), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Agarbatti (Incense Stick) Making?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
- PMEGP sample project report — Incense Sticks (Agarbatti) Manufacturing (prepared by Udyami/Samadhan)
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.