§1What this business is

Starch granules go into an extrusion machine that makes long film; the film is wound, printed on a 4-colour printer, then sealed, cut and punched to size and packed. Compostable bags break down in a compost site into carbon dioxide, water and biomass, unlike plastic that only breaks into smaller pieces.

Capacity: 300 kg a day; 90,000 kg a year. Year 1 assumes 55% (49,500 kg). Sale ₹320 a kg in year 1.

§2Is it right for you?

Who it is for

Someone with packaging-trade contacts among retailers, institutions or municipal bodies.

Who it is not for

Someone who cannot fund large working capital or prove compostability to buyers.

Advantages

  • Single-use plastic bans push buyers to compostable bags
  • Small rented space and team of 8
  • Printing adds brand value for shops

Drawbacks

  • Raw material (₹262 a kg) eats most of the price
  • Bags cost much more than plastic — buyers resist
  • Pollution board certificate can take 3–4 months
  • Fake 'biodegradable' bags undercut prices

Skills you need

  • Extrusion and sealing machine work
  • Film quality testing
  • Certification paperwork
  • B2B and institutional sales

Why difficulty 3/5: Machines are standard, but certification, costly raw material and price-sensitive buyers make it harder.

§3Market

Who buys

  • Retail shops and supermarkets
  • Homes and offices (bin liners)
  • Zero-waste events and institutions

How it sells

  • Packaging distributors
  • Direct institutional orders
  • Online sales

Good to know

  • The report lists bag sizes from 3-gallon to 96-gallon liners.

§4Raw material & machinery

ItemQtyCost
Extrusion machine—₹4,00,000
Cutting and sealing machine—₹3,00,000
4-colour film printing machine—₹2,00,000
Other equipment—₹3,00,000

From: PMEGP sample project report — Compostable Bag (prepared by Udyami/Samadhan)

  • Starch granules97% of the mix at ₹250 a kg
  • Printing ink2% of the mix at ₹220 a kg
  • Additives1% of the mix at ₹1,520 a kg; blended cost ₹262.10 a kg

From: PMEGP sample project report — Compostable Bag (prepared by Udyami/Samadhan)

In our raw material database

Starch (maize and tapioca) →

§5Licences & registration

  1. Udyam registration
  2. GST registration
  3. Certificate from the Central Pollution Control Board for compostable plastic (Plastic Waste Management Rules)
  4. State Pollution Control Board consent (check the category for your process)
  5. Trademark for your brand if needed

We can do this registration for you

§6Schemes & subsidies

PMEGP (this profile was made for it), MUDRA loans up to ₹20 lakh and CGTMSE cover fit; Stand-Up India suits women and SC/ST founders.

§7Money

How the investment is worked out: Samadhan sample report: plant and machinery ₹14.16 lakh (₹12.00 lakh + 18% GST ₹2.16 lakh) + furniture ₹0.84 lakh + working capital ₹10.00 lakh = ₹25.00 lakh. Premises rented.

Working capital: Working capital limit ₹10.00 lakh from the bank; stock and debtors are large because the raw material is costly.

Year not printed on the report — check current machinery prices.

How to prepare a loan file

§8Export potential

Confirm the HS code in the DGFT ITC(HS) lookup before you export

3923Articles for packing goods, of plastics (includes sacks and bags)

Export council / board: PLEXCONCIL

  • Plastic-product exporters, including compostable bags, usually join PLEXCONCIL.
  • Confirm the exact 8-digit code in the DGFT ITC-HS schedule before you ship.

§9Risks — where people fail

  • Granule price rise
  • Weak enforcement of plastic bans
  • Short shelf life of compostable film
  • Certification delays

§1030 / 60 / 90-day plan

A general plan that applies to any business. A plan for this business will be added after research.

  1. Days 1–30: Visit a working compostable starch bag making unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
  2. Days 31–60: Udyam and the licences you need (Udyam registration, GST registration), a project report (DPR), and the scheme or loan file.
  3. Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.

§11Who to connect with

Not verified yet

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 Compostable Starch Bag Making?

DPR, loan file or registration — ask us on WhatsApp.

Get a DPR / loan file made

Sources

  1. PMEGP sample project report — Compostable Bag (prepared by Udyami/Samadhan)

Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.