§1What this business is
You press mustard or groundnut in an expeller/ghani to extract oil, filter it and fill bottles or tins; the oil cake sells as cattle feed. Buyers are kirana shops, wholesalers and households directly. Trust in 'kachi ghani, pure' is the brand.
Capacity: Mustard: 1,80,000 bottles a year; groundnut: 1,18,800 kg a year.
§2Is it right for you?
Who it is for
Someone in the mustard belt who can buy directly from farmers and build a local brand.
Who it is not for
Someone who cannot bear the risk of price swings.
Advantages
- Mustard oil is a daily need in UP and Rajasthan
- Extra income from oil cake
- Pure oil earns a premium and repeat customers
- Simple process; machines are made in India
Drawbacks
- Mustard prices move with MSP and import duty
- Cheap adulterated oil spoils the market
- Bottle/tin packaging cost
- Strict FSSAI testing
Skills you need
- Judging seed quality/oil content
- Expeller operation
- Packaging & branding
- Timing stock purchases
Why difficulty 2/5: The machines are easy; managing prices and trust is the real work.
§3Market
Who buys
- Households (about 90% of mustard oil is used for cooking)
- Pickle makers
- Cattle-feed makers and dairy farmers, who buy the oil cake
How it sells
- Bottled oil sold through kirana shops and wholesalers
- Oil cake sold by the kg to feed traders
Good to know
- India uses about 2.3 million tonnes of mustard oil a year; use has grown about 5% a year (NIFTEM DPR).
- The DPR sells oil in bottles and the oil cake at ₹22 per kg in year 1.
- Machinery total in the DPR is ₹7.84 lakh without GST and transport.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Heavy-duty oil expeller (chamber 30" × 5.5", up to 250 kg/hour, with oil tank) | 1 | ₹2.60 lakh |
| Heavy-duty round cooking/feeding kettle | 1 | ₹38,000 |
| Filter press 18" × 18", 18 taps, with filter cloth, oil tray and oil pump | 1 | ₹1.25 lakh |
| Essential spare parts (worm set, cage set, filter cloth) | 1 | ₹30,000 |
| Electric motor, 3-phase 20 HP, with starter | 1 | ₹65,000 |
| Pulleys, V-belts, pipelines, pipe fittings and valves | — | ₹16,000 |
| Material handling (bins, trolley, weighing machine) | — | ₹2.50 lakh |
From: NIFTEM-K (MoFPI) PMFME Detailed Project Report – Mustard Oil Unit (2021)
- Mustard seed (mostly black seed)DPR takes ₹30 per kg in year 1; Rajasthan grows about 47% of India's mustard seed
- Groundnutsfor a groundnut oil line
From: NIFTEM-K (MoFPI) PMFME Detailed Project Report – Mustard Oil Unit (2021) · NIFTEM-K (MoFPI) PMFME Detailed Project Report – Groundnut Oil Unit (2021)
Suppliers in Building Business Bazaar
Delhi Iron and Steel Co. Pvt Ltd · Gaziabad →Parekh Machine Tools · Kolkata →Punjab Engg. Works · Kolkata →S.P. Engg. Co · Kanpur →Swastik Engg. Works · Mumbai →State Food Laboratory, Port Blair · Port Blair →State Food Laboratory, Hyderabad · Hyderabad →Regional Public Health Laboratory, Visakhapatnam · Visakhapatnam →State Public Health Laboratory, Guwahati · Guwahati →Combined Food & Drugs Laboratory, Patna · Patna →State Food Testing Laboratory, Raipur · Raipur →Combined Food & Drugs Laboratory, Delhi · Delhi →
In our raw material database
§5Licences & registration
- FSSAI licence
- Udyam
- GST
- Legal Metrology
- AGMARK (optional)
§6Schemes & subsidies
- PMFMECentralUnclear35% subsidy, up to ₹10 lakh
- AIFCentralUnclear3% interest subvention, up to ₹2 crore
- PMEGPCentralActive15–35% subsidy
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
PMFME (the DPRs were made for it); AIF for primary processing; PMEGP/MUDRA/CGTMSE.
§7Money
How the investment is worked out: NIFTEM PMFME DPRs: Mustard oil unit ₹17.87 L (machinery ₹7.84 L, misc ₹3.50 L, WC ₹6.53 L); Groundnut oil unit ₹24.31 L (machinery ₹15.39 L, misc ₹1.70 L, WC ₹7.22 L). Premises rented.
Working capital: Mustard has to be bought all at once after the rabi harvest — WC ₹6.5–7.2 L.
DPRs 2021.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: IOPEPC
- IOPEPC is the export council for oilseeds, edible oils and oil cakes.
- Edible oil export rules change from time to time; check the DGFT export policy before you sign a deal.
§9Risks — where people fail
- Seed price/edible-oil import policy
- Adulterated competition
- Working capital
- Food safety
§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 oil mill (kachi ghani mustard / groundnut) 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, Udyam), 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 Oil Mill (Kachi Ghani Mustard / Groundnut)?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
- NIFTEM-K (MoFPI) PMFME Detailed Project Report – Mustard Oil Unit (2021)
- NIFTEM-K (MoFPI) PMFME Detailed Project Report – Groundnut Oil Unit (2021)
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.