§1What this business is
Starch-based or PLA (polylactic acid) granules are blended with additives, melted in an extruder and blown into film, then printed, cut and sealed into bags. They replace single-use plastic bags for shops, vegetable sellers and packaging.
Capacity: Starch report: 300 kg a day, 90,000 kg a year; 50% use in year 1. PLA report: rated output not printed; 50% use in year 1.
§2Is it right for you?
Who it is for
Someone in plastics or packaging who can get certified and sell to retailers and brands.
Who it is not for
Someone hoping to sell on price against ordinary plastic bags.
Advantages
- Single-use plastic bans push shops towards compostable bags
- Standard blown-film machines
- Buyers include shops, brands and municipal bodies
- Can print custom bags for brands
Drawbacks
- Compostable resin is costly, so bags cost more than plastic
- Fake 'biodegradable' bags undercut prices
- Certification is required to sell as compostable
- Thin margin in year 1
Skills you need
- Blown-film extrusion
- Resin sourcing
- Certification paperwork
- Selling to retailers and brands
Why difficulty 3/5: Machines are standard; certification and price competition are the hard part.
§3Market
Who buys
- Retail shops and supermarkets
- Fruit and vegetable sellers
- Brands needing compostable packaging
How it sells
- Packaging distributors
- Direct supply to retail chains
- Municipal and institutional orders
Good to know
- The PLA report says packaging used 59% of biodegradable plastics made in 2019 and agriculture 14%.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Starch-bag line (total plant & machinery) | — | ₹33.00 lakh |
| Vertical mixing (blending) machine | 1 | — |
| Plastic extruder and blown-film machine | 1 | — |
| Bag printing machine | 1 | — |
| Bag cutting and sealing machine | 1 | — |
| PLA-bag line (total plant & machinery) | — | ₹12.50 lakh |
From: PMEGP sample project report — Biodegradable Bags (prepared by Udyami/Samadhan) · PMEGP sample project report — Biodegradable Plastic Bags (prepared by Udyami/Samadhan)
- Starch (corn starch based compound)105,882 kg a year at full use, ₹225/kg in the starch report
- Polylactic acid (PLA) granules and additivesmain raw material in the PLA report
From: PMEGP sample project report — Biodegradable Bags (prepared by Udyami/Samadhan) · PMEGP sample project report — Biodegradable Plastic Bags (prepared by Udyami/Samadhan)
Suppliers in Building Business Bazaar
CIPET School for Advanced Research in Petrochemicals (SARP) - APDDRL - Bengaluru · Bengaluru →CIPET School for Advanced Research in Petrochemicals (SARP) - LARPM - Bhubaneswar · Bhubaneswar →CIPET School for Advanced Research in Petrochemicals (SARP) - ARSTPS - Chennai · Chennai →CIPET Centre for Skilling and Technical Support (CSTS) – Plastic Waste Management Centre - Guwahati · Guwahati →Biogreen Bags · Bengaluru →Green Tech Bio Products · Coimbatore →Indian Petrochemicals Corpn.Ltd · Kolkata →Mittal Station Works · Delhi →Nova Engineering works · Ahmedabad →Oswal Engineering Corpn · Mumbai →P V Enterprises · Sangli →Plastemart.com · Mumbai →
§5Licences & registration
- Udyam
- GST
- Trade licence
- Pollution control board NOC
- Fire NOC
- CPCB certificate for compostable plastic (Plastic Waste Management Rules)
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
Both reports are PMEGP samples; MUDRA and CGTMSE can cover loans.
§7Money
How the investment is worked out: Samadhan starch-bag report ₹43.72 L (machinery ₹33.00 L, furniture ₹1.00 L, working capital ₹9.72 L; shed own or rented). Samadhan PLA-bag report ₹22.89 L (machinery ₹12.50 L, furniture ₹0.50 L, other assets ₹1.00 L, working capital ₹8.89 L; premises rented).
Working capital: Starch ₹9.72 L (bank ₹8.75 L); PLA ₹8.89 L (bank ₹8.00 L). Resin is the main cost.
Year not printed on either report — check current machinery and resin prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: PLEXCONCIL
- Export buyers ask for compostability certificates such as EN 13432 or ASTM D6400.
§9Risks — where people fail
- Resin price rise
- Rule changes on plastics
- Competition from uncertified bags
- Customer price resistance
§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 biodegradable / compostable bag unit 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 Biodegradable / Compostable Bag Unit?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
- PMEGP sample project report — Biodegradable Bags (prepared by Udyami/Samadhan)
- PMEGP sample project report — Biodegradable Plastic Bags (prepared by Udyami/Samadhan)
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.