§1What this business is
The squirrel cage induction motor is the common three-phase motor that drives pumps, fans, compressors and machine tools. The unit buys castings, shaft steel, stampings and enamelled copper wire. It machines the body, end covers and shaft, winds the stator and varnishes it in a vacuum impregnation plant and baking oven, die-casts the aluminium rotor, balances it, assembles the motor with bearings and fan, paints it and runs routine tests to IS 12615:2018. The DPR models 5 HP motors and also earns a little from repairing motors.
Capacity: Installed capacity 10,000 motors of 5 HP a year. Year 1 at 60%: 6,000 motors worth ₹4.92 crore plus ₹9 L from repair and maintenance of 600 motors; 90% use by year 7.
§2Is it right for you?
Who it is for
An electrical engineer or motor rewinder who wants to move from repair to manufacturing.
Who it is not for
Anyone without electrical design and testing knowledge.
Advantages
- Motors are needed by every factory, pump set and workshop
- All main inputs — castings, stampings, copper wire, bearings — are made in India
- The same plant can make other ratings and repair motors
- Machinery is ordinary workshop equipment costing about ₹41 L before tax
Drawbacks
- Thin margin — 6.3% of sales in year 1
- Copper and steel are most of the cost and their prices move a lot
- Strong competition from large brands
- Motors must meet the efficiency classes of IS 12615 and carry BIS certification
Skills you need
- Motor design, winding and insulation
- Machining shafts and housings to close fit
- Aluminium rotor die-casting and dynamic balancing
- Routine motor testing to IS 12615
Why difficulty 4/5: Many processes under one roof — machining, winding, die-casting and testing — against big-brand competition.
§3Market
Who buys
- Pump, compressor, blower and machine makers (OEMs)
- Factories and workshops replacing motors
- Electrical dealers and distributors
- Farmers and agro-processing units
How it sells
- Dealers and distributors of electrical goods
- Direct supply to OEMs
- Government and PSU tenders
- Repair and maintenance service for local industry
Good to know
- The DPR values 6,000 motors of 5 HP at ₹4.92 crore — ₹8,200 a motor.
- Standard: IS 12615:2018 for energy-efficient three-phase squirrel cage induction motors.
- The DPR lists HS codes 85015110, 85015210 and 85015310 for three-phase squirrel cage motors of different outputs.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Heavy duty centre lathe, 10 ft bed, 3 HP | 2 | ₹5,96,000 |
| Heavy duty centre lathe, 6 ft bed, 2 HP | 2 | ₹3,20,000 |
| Universal milling machine | 1 | ₹95,000 |
| Automatic cylindrical grinding machine, 600 mm | 1 | ₹3,50,000 |
| Shaping machine 24 inch stroke | 1 | ₹1,98,000 |
| Radial drilling machine 25 mm | 1 | ₹88,000 |
| Horizontal band saw 175 mm | 1 | ₹98,000 |
| Treadle guillotine shearing machine | 1 | ₹2,48,000 |
| Dynamic balancing machine 50 kg | 1 | ₹1,00,000 |
| Hydraulic power press 20 ton | 1 | ₹1,78,000 |
| Pit type electric furnace 20 kW with die-casting attachments | 1 | ₹1,60,000 |
| Semi-automatic coil winding machine | 1 | ₹1,20,000 |
| Motor winding baking oven, 500 kg | 2 | ₹2,20,000 |
| Vacuum impregnation plant 5 kW | 1 | ₹3,00,000 |
| Power analysers (accuracy class 0.2 and 0.5) | 2 | ₹3,75,000 |
| Hydraulic dynamometer 50 HP | 1 | ₹2,00,000 |
| Three-phase auto transformer 0–500 V, 40 A | 2 | ₹1,40,000 |
From: DC-MSME import-substitution DPR — Squirrel Cage Induction Motor (2021)
- Castings (body and end covers)12,500 kg a month at ₹40 a kg
- Shaft steel2,500 kg a month at ₹130 a kg
- Stampings (laminations)9,000 kg a month at ₹100 a kg
- Enamelled copper wire1,750 kg a month at ₹500 a kg
- Bearings1,000 a month at ₹350 each
- EC grade aluminium for rotors900 kg a month at ₹165 a kg
- Fans and fan covers500 pairs a month at ₹100
- Paint, varnish, insulating material, hardware and packingabout ₹1.68 L a month
From: DC-MSME import-substitution DPR — Squirrel Cage Induction Motor (2021)
§5Licences & registration
- Udyam registration
- GST registration
- Factory licence
- BIS licence for IS 12615 (check the current quality control order for electric motors)
- State Pollution Control Board consent
- Trade licence from the local body
Start it in your state
Pick your state: today’s cost, central + state subsidy, raw material, land and help, on one page.
§6Schemes & subsidies
With fixed capital of ₹68 L and working capital of ₹56 L the project is above the PMEGP ceiling of ₹50 L for manufacturing. CGTMSE can back the term loan and working capital loan without collateral.
§7Money
How the investment is worked out: Fixed capital ₹68,09,509 (shed of 3,000 sq ft ₹12.00 L on own land, machinery and equipment ₹55,59,509 including GST, installation, freight and office furniture, pre-operative ₹50,000) + working capital for 1.5 months ₹55.80 L = ₹1,23,89,509. The DPR prints the two figures separately; the sum is ours.
Working capital: Working capital ₹55.80 L for 1.5 months in year 1, with a bank loan for 75% (₹41.85 L). Raw material for 500 motors a month costs ₹33.16 L — mainly stampings ₹9.00 L, enamelled copper wire ₹8.75 L and castings ₹5.00 L.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: EEPC India
- Confirm the 8-digit ITC(HS) line with DGFT or your customs broker before shipping.
- You need an Import Export Code (IEC) from DGFT before the first shipment.
§9Risks — where people fail
- A jump in copper prices
- Motors failing efficiency or temperature-rise tests
- Warranty returns from burnt windings
- Price cutting by bigger makers
§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 squirrel cage induction motor manufacturing 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
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Squirrel Cage Induction Motor Manufacturing?
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.