§1What this business is
A paper roll is loaded on the machine, glue goes into the filler, settings are made on the control panel, and the machine cuts, folds and sticks the bags. The report's machine handles 60 kg of paper an hour; a kg of paper makes about 150 bags. Bags are used for shopping, groceries, food, jewellery, medicines and gifts.
Capacity: 60 kg of paper an hour, 480 kg a day — 1,44,000 kg (2,16,00,000 bags) a year. Year 1 at 75%, sold at ₹44 a kg.
§2Is it right for you?
Who it is for
Someone with retail, restaurant or brand contacts in a town or city.
Who it is not for
Someone expecting high margins without a sales network.
Advantages
- Small space and only 4 people
- Plastic-bag bans drive demand
- Low break-even (38%)
- Printed bags win brand orders
Drawbacks
- Gross margin is only 13–15%
- Many competitors with the same machine
- Paper price rises hit margin directly
Skills you need
- Machine setting and upkeep
- Paper buying
- Local B2B selling
- Print design for brands
Why difficulty 2/5: One machine, small team and simple process; profit depends on steady orders.
§3Market
Who buys
- Retail and clothing stores
- Restaurants, bakeries and sweet shops
- Medical stores and jewellers
- Corporate and event buyers
How it sells
- Direct supply to shops
- Packaging wholesalers
- Branded bag orders
Good to know
- The report says the retail segment is the main user of paper bags.
- Its 'at a glance' page shows ₹40.66 lakh turnover, while the profit table shows ₹43.56 lakh for year 1.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Paper bag machine, large scale, without colour flexo printing (selected in the report) | 1 | ₹5,50,000 (excluding GST) |
| Option: large scale with two-colour flexo printing | — | ₹8,50,000 |
| Option: small scale without printing | — | ₹4,25,000 |
From: PMEGP sample project report — Paper Bag (prepared by Udyami/Samadhan)
- Kraft or brown paper roll₹30 a kg in year 1; 1,44,000 kg a year at full capacity
- Glue and consumables₹3 a kg of paper in year 1
From: PMEGP sample project report — Paper Bag (prepared by Udyami/Samadhan)
Suppliers in Building Business Bazaar
AHMEDABAD TEXTILE INDUSTRY'S RESEARCH ASSOCIATION (ATIRA) · Ahmedabad →KANHA TESTING LABS PVT. LTD. · Gurgaon →UL INDIA PRIVATE LIMITED · Gurgaon →ROSS LIFESCIENCE LIMITED · Pune →PULP AND PAPER RESEARCH INSTITUTE (PAPRI) · Rayagada →TRUSTIN ANALYTICAL SOLUTIONS PRIVATE LIMITED · Chennai →Indian Institute of Packaging, Mumbai (head office) · Mumbai →Indian Institute of Packaging, Delhi centre · Delhi →Indian Institute of Packaging, Kolkata centre · Kolkata →Indian Institute of Packaging, Chennai centre · Chennai →Indian Institute of Packaging, Hyderabad centre · Hyderabad →Indian Institute of Packaging, Ahmedabad centre · Ahmedabad →
In our raw material database
§5Licences & registration
- Udyam registration
- GST registration
- Fire and pollution registration as required
- Trademark for your brand if needed
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
PMEGP (this profile was made for it), MUDRA loans up to ₹20 lakh and CGTMSE cover for a collateral-free loan fit.
§7Money
How the investment is worked out: Samadhan sample report: plant and machinery ₹6.49 lakh + furniture ₹0.40 lakh + working capital ₹8.17 lakh = ₹15.06 lakh. Premises rented.
Working capital: Working capital ₹8.17 lakh, with a bank limit of ₹6.00 lakh; one month of 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: CAPEXIL
- Paper and paper-product exporters usually take membership of CAPEXIL.
- Confirm the exact 8-digit code in the DGFT ITC-HS schedule before you ship.
§9Risks — where people fail
- Kraft paper price rise
- Price war with local units
- Weak enforcement of plastic bans
- Machine downtime
§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 paper bag making unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (Udyam registration, GST 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 Paper Bag Making?
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.