§1What this business is

Herbal cosmetics use a cream or lotion base to which herb ingredients such as aloe vera, neem, amla, coconut oil and henna are added. Herbs are dried, ground and extracted; oils and waxes are heated with a mild alkali to form the base; the herb extract, colour and perfume are mixed in; and the product is filled into washed bottles and sealed. The profile plans a unit making 2.00 lakh units a year at an average price of ₹40 a unit, with a manufacturing chemist and an analytical chemist on the staff.

Capacity: 2.00 lakh units of creams and lotions a year; the profile plans 60% use in Year 1 and 80% from Year 3.

§2Is it right for you?

Who it is for

A person with an Ayurveda or cosmetic science background who has worked in a herbal products unit.

Who it is not for

Someone who cannot keep batch records and test every batch.

Advantages

  • Buyers are moving from chemical to herbal beauty products
  • Herbs and oils are available within India
  • One plant can make many products
  • You can also make goods for other brands

Drawbacks

  • Big brands dominate shop shelves
  • Needs qualified chemists on the staff
  • Building a brand takes time and money

Skills you need

  • Cosmetic formulation
  • Herb identification and quality testing
  • Hygienic filling and packing
  • Branding and distributor sales

Why difficulty 3/5: The process is simple, but licensing, testing and brand building are hard work.

§3Market

Who buys

  • Households buying skin and hair care
  • Beauty parlours and salons
  • Brands that buy contract-made products

How it sells

  • Distributors to chemists, general stores and cosmetic shops
  • Online marketplaces

Good to know

  • The profile assumes an average selling price of ₹40 a unit.

§4Raw material & machinery

ItemQtyCost
Pulveriser with 7.5 HP and 2.5 HP motors4₹2.40 lakh
Disintegrator, 7.5 HP, with sieves4₹1.20 lakh
Tray drier1₹1.00 lakh
SS mixing vessels with stirrer5₹1.50 lakh
Bottle filling machines2₹0.60 lakh
Bottle sealing machines2₹0.40 lakh
Bottle washing and drying machines2₹1.00 lakh
Water treatment plant, 100 litres1₹3.00 lakh
Quality control and testing equipment—₹3.00 lakh

From: SIDBI Stand-Up Mitra project profile — Herbal Cosmetics (2018) — private guide — confirm locally

  • Herbs and plant extracts (aloe vera, neem, amla, henna and others)one formulation may use 8 to 10 active ingredients
  • Oils and waxes (coconut, sunflower and olive oil, beeswax, paraffin)form the cream or lotion base
  • Bottles, caps, labels and cartonsraw and packing material for a month is ₹2.00 lakh

From: SIDBI Stand-Up Mitra project profile — Herbal Cosmetics (2018) — private guide — confirm locally

§5Licences & registration

  1. Udyam registration
  2. GST registration
  3. Cosmetic manufacturing licence under the Drugs and Cosmetics Act from the State Licensing Authority
  4. AYUSH (Ayurvedic) manufacturing licence if products are sold as Ayurvedic medicines
  5. Pollution control consent
  6. Legal Metrology registration for packaged goods

We can do this registration for you

Start it in your state

Pick your state: today’s cost, central + state subsidy, raw material, land and help, on one page.

§6Schemes & subsidies

At ₹34.30 lakh the unit is inside the PMEGP manufacturing ceiling of ₹50 lakh. CGTMSE can cover a bank loan without collateral.

§7Money

How the investment is worked out: Land 500 sq m ₹2.50 lakh + building 400 sq m ₹8.00 lakh + plant and machinery ₹18.00 lakh + other assets ₹1.00 lakh + preliminary expenses ₹0.50 lakh + contingencies ₹2.80 lakh + working capital margin ₹1.50 lakh = ₹34.30 lakh. (The machinery list in the same profile adds up to ₹20.00 lakh.)

Working capital: Working capital ₹4.80 lakh: raw and packing material for 1 month ₹2.00 lakh, working expenses ₹1.00 lakh, finished goods for 15 days ₹1.00 lakh and receivables for 7 days ₹0.80 lakh.

Prices from 2018 — land, building and machinery will cost more now.

How to prepare a loan file

§8Export potential

No HS code is given here — the profile prints none. Confirm the ITC(HS) line with DGFT or a customs broker.

§9Risks — where people fail

  • Skin reaction complaints from a bad batch
  • Uneven quality of raw herbs
  • Claims that turn a cosmetic into a drug under the law
  • Unsold stock passing its shelf life

§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 herbal cosmetics manufacturing (creams and lotions) 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.

Want to start Herbal Cosmetics Manufacturing (Creams and Lotions)?

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

Get a DPR / loan file made

Sources

  1. SIDBI Stand-Up Mitra project profile — Herbal Cosmetics (2018)

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