§1What this business is
Milk is stored, pasteurised, chilled and homogenised; a cream separator takes out the cream and the toned milk is packed in pouches. The cream is chilled, churned into butter and heated in a ghee kettle. Ghee is packed in pouches and sold to shops, sweet makers and households.
Capacity: 150 kg of ghee a day; 45,000 kg (90,000 packs of 500 g) a year at full capacity; 45% in year 1.
§2Is it right for you?
Who it is for
A dairy farmer, milk collector or cooperative member with an assured milk supply.
Who it is not for
Someone without a steady milk source or cold-chain discipline.
Advantages
- Ghee is the second most consumed dairy product in India (report)
- Long shelf life compared with milk
- Toned milk is an extra product
- Strong festive and sweet-shop demand
Drawbacks
- Milk is about 70% of sales value — margins depend on milk price
- Adulteration scandals hurt buyer trust
- Needs boiler, chiller and hygienic handling
- The report's ₹20 a litre milk price is far below today's rates
Skills you need
- Milk procurement and fat testing
- Dairy hygiene and pasteurisation
- Ghee flavour and moisture control
- Selling to shops and sweet makers
Why difficulty 3/5: Hygiene, milk supply and price swings need daily attention.
§3Market
Who buys
- Households
- Sweet shops and caterers
- Ice-cream and confectionery makers
- Kirana and grocery stores
How it sells
- Distributors and kirana shops
- Direct sale to sweet makers and caterers
- Own outlet or milk route
Good to know
- The report calls ghee the second largest consumed dairy product in India after liquid milk.
- Uses listed: cooking fat, ice cream, confectionery and fat spreads.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Milk storage tank | 2 | ₹70,000 |
| Balance tank | 1 | ₹15,000 |
| Milk homogeniser | 1 | ₹1,95,000 |
| Milk pasteuriser | 1 | ₹2,75,000 |
| Cream separator | 1 | ₹31,000 |
| Boiler | 1 | ₹1,65,000 |
| Pump | 1 | ₹18,000 |
| Chiller | 1 | ₹2,75,000 |
| Butter churning machine | 1 | ₹1,35,000 |
| Ghee boiling kettle | 1 | ₹85,000 |
| IBT-type chilling machine | 1 | ₹1,45,000 |
| Pouch filling machine | 1 | ₹2,15,000 |
| Other machinery and equipment | 1 lot | ₹20,000 |
From: PMEGP sample project report — Ghee (prepared by Udyami/Samadhan)
- Milk6,75,000 litres a year at ₹20 a litre at full capacity (report rate)
- Packing material₹3.50 L a year lump sum
From: PMEGP sample project report — Ghee (prepared by Udyami/Samadhan)
Suppliers in Building Business Bazaar
In our raw material database
§5Licences & registration
- FSSAI licence (named in the report)
- Udyam registration
- GST registration
- Trademark for the brand (optional, per report)
- Boiler registration
- State Pollution Control Board consent (dairy effluent)
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- PMFMECentralUnclear35% subsidy, up to ₹10 lakh
- AIFCentralUnclear3% interest subvention, up to ₹2 crore
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
PMEGP and PMFME fit; AIF for primary dairy processing; MUDRA and CGTMSE for credit.
§7Money
How the investment is worked out: Samadhan report: building/shed 800 sq ft ₹2.00 L, plant & machinery ₹16.44 L, furniture ₹1.00 L, working capital ₹5.00 L = ₹24.44 L. Land own or rented.
Working capital: Working capital ₹5.00 L (bank ₹4.50 L); 2 days' milk stock, 7 days' finished stock.
Year not printed on the report — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: APEDA
- 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
- Milk price rise squeezing margin
- Lean-season milk shortage
- FSSAI quality failure
- Competition from big dairy brands
§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 ghee making unit unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (FSSAI licence (named in the report), Udyam registration), 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 Ghee Making Unit?
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.