§1What this business is

Green chillies are washed in a trough, ground, blended with salt and other ingredients in a mixing tank and filled in pouches or sealed jars. A small cold store holds the fresh chillies. The model makes 500 kg of paste a day; 1 kg of chilli gives about 900 g of paste. The DPR's sale price is ₹70 a kg.

Capacity: 150 tonnes of paste a year (500 kg a day), 300 working days of 8–10 hours. Year 1 is for construction; use is 55% in Year 2, 65%, 75%, 90% and 100% from Year 6. Chilli needed: 330 kg a day at 55% to 600 kg a day at full use.

§2Is it right for you?

Who it is for

A small processor near a vegetable mandi who can supply hotels, caterers and shops.

Who it is not for

Someone who cannot keep strict hygiene or test acidity and salt.

Advantages

  • One of the cheapest food units to set up, under ₹20 lakh
  • Green chilli is grown almost everywhere and all year
  • Restaurants and caterers buy paste to save kitchen labour
  • About 90% of the chilli becomes product

Drawbacks

  • Chilli prices swing sharply within a year
  • Paste loses its green colour and can ferment
  • Workers need protection from chilli fumes

Skills you need

  • Sorting and washing chillies
  • Blending with salt and permitted preservatives
  • Hygienic pouch filling
  • Selling to hotels and caterers

Why difficulty 2/5: Small, simple line; hygiene and chilli price are the main worries.

§3Market

Who buys

  • Hotels, restaurants and caterers
  • Pickle, sauce and snack makers
  • Households through grocery shops

How it sells

  • Direct bulk supply to kitchens
  • Distributors to grocery shops
  • Supermarkets and online grocery

Good to know

  • The DPR assumes an average sale price of ₹70 a kg.

§4Raw material & machinery

ItemQtyCost
Cold store, 1,500 kg1₹4 lakh
Vegetable washing trough, 500 litre1₹0.65 lakh
Vegetable grinder, 100 kg an hour1₹0.3 lakh
Blending/mixing tank, 100 kg1₹0.6 lakh
Induction sealer1₹0.3 lakh
Shrink tunnel1₹0.35 lakh
Pouch filling unit, 400 pouches an hour1₹1.5 lakh
Batch coding machine1₹0.12 lakh
Weighing balance1₹0.06 lakh
Accessories1₹0.5 lakh

From: NIFTEM-Thanjavur (IIFPT) PMFME model DPR — Green Chilli Paste

  • Fresh green chillies330–600 kg a day; ₹12 a kg in the assumptions, ₹18 a kg in the expense table
  • Saltcosted at ₹3 a kg
  • Other ingredientscosted at ₹90 a kg
  • Pouches and jarspacking is a large part of the cost

From: NIFTEM-Thanjavur (IIFPT) PMFME model DPR — Green Chilli Paste

§5Licences & registration

  1. Udyam registration
  2. GST registration
  3. FSSAI licence or registration
  4. Legal Metrology registration for packaged goods

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§6Schemes & subsidies

The DPR is written for PMFME (35% credit-linked subsidy, up to ₹10 lakh, for micro food units). PMEGP is another route for a new unit of this size, and CGTMSE can back the bank loan without collateral.

§7Money

How the investment is worked out: Building 20 × 32 × 12 ft ₹5.18 L + plant and machinery ₹8.38 L + utilities ₹0.80 L + other fixed assets ₹0.90 L + pre-operative ₹0.90 L + contingencies ₹1.20 L + working capital margin ₹2.42 L = ₹19.78 lakh.

Working capital: Working capital margin ₹2.42 L in the project cost; bank working capital ₹7.25 L in Year 2, ₹8.56 L in Year 3 and ₹11.68 L in Year 4.

Year not printed on the DPR (the PMFME scheme began in 2020) — check current machinery prices.

How to prepare a loan file

§8Export potential

Export council / board: APEDA

  • The DPR gives no export costing; an exporter needs an IEC and registration with the export body before shipping.

§9Risks — where people fail

  • Spoilage or gas formation in packs
  • Chilli price spikes — the DPR itself uses ₹12 a kg in one table and ₹18 in another
  • Pesticide residue in the raw chillies
  • Competition from ginger-garlic paste brands adding chilli paste

§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 green chilli paste unit 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

§12Watch

There is no episode on this business yet. Shows are coming soon on the Podcast page.

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Sources

  1. NIFTEM-Thanjavur (IIFPT) PMFME model DPR — Green Chilli Paste

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