§1What this business is
The unit studies the customer's load, buys a matching alternator and diesel engine, couples them on a frame, adds a control panel for starting and changeover from mains, and tests the set on a resistance load bank. Shops, small hotels, offices and telephone exchanges buy them for power cuts.
Capacity: 24 generator sets a year (production value ₹7.25 L).
§2Is it right for you?
Who it is for
An electrician or mechanic with engine and alternator know-how and local customers.
Who it is not for
Someone who cannot service sets after sale.
Advantages
- Small investment
- Made to order, so little unsold stock
- Service and repair work can add income
- Useful wherever power cuts are common
Drawbacks
- Branded gensets and inverters compete strongly
- Only 24 sets a year in the profile
- Diesel engines and gensets must meet CPCB emission and noise rules
- Demand falls where grid power and solar improve
Skills you need
- Engine–alternator matching
- Control panel wiring
- Load testing
- After-sales service
Why difficulty 3/5: Small capital, but emission rules and branded competition make it harder than it looks.
§3Market
Who buys
- Shops and small commercial buildings
- Hotels and offices
- Railway stations and telephone exchanges
How it sells
- Direct orders after a load study
- Electrical contractors and dealers
Good to know
- The profile covers only small sets below 7.5 kVA, started by cranking or battery.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Pendant-operated electric hoist, 5 T | 1 | — |
| Welding transformer, 2 kVA | 1 | — |
| Gas cutting equipment | 1 | — |
| Flexible-shaft grinder and bench drill (1/2") | 1 each | — |
| Resistance load bank, 10 kW, and testing panel | 1 each | — |
| All equipment above with spanners, screwdrivers and crimping tools | 1 set | ₹1,93,420 |
From: KVIC Project Profile — Assembly of Diesel Generator Set (PMEGP)
- Diesel engines, alternators, frames, control panels and batteriesbought per order; raw material ₹2,00,400 a year in the profile
- Labels and packing material₹20,000 a year
From: KVIC Project Profile — Assembly of Diesel Generator Set (PMEGP)
§5Licences & registration
- Udyam
- GST
- Check CPCB emission and noise type-approval rules for diesel gensets before selling
- Electrical contractor licence for installation work
§6Schemes & subsidies
A PMEGP profile; MUDRA covers loans of this size.
§7Money
How the investment is worked out: KVIC profile: work shed ₹72,000, equipment ₹1,93,420 (5 T electric hoist, 2 kVA welding transformer, gas cutting set, flexible-shaft grinder, bench drill, tools, 10 kW resistance load bank, testing panel) and working capital ₹1,20,000 = ₹3,85,420.
Working capital: ₹1,20,000 (worked out at ₹1,20,860 per cycle). Engines and alternators are bought per order.
Year not printed on the KVIC profile — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: EEPC India
- HS codes are from the WCO HS 2022 list; confirm the 8-digit ITC(HS) line with DGFT or your customs broker.
- You need an Import Export Code (IEC) from DGFT before the first shipment.
§9Risks — where people fail
- Emission and noise rules for diesel gensets
- Competition from branded gensets and inverters
- Warranty failures
- Falling demand with better grid supply
§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 small diesel generator set assembly 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 Small Diesel Generator Set Assembly?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.