§1What this business is
Yarn is warped and woven on a power loom into terry (looped pile) fabric, bleached and dyed, cut to length, hemmed on a stitching machine, folded and packed. Bath, hand and kitchen towels are used in every home, hotel and hospital.
Capacity: 450 towels a day on a 10-hour shift; year 1 at 30%.
§2Is it right for you?
Who it is for
Someone with weaving experience near a textile cluster who can sell to hotels, hospitals and wholesalers.
Who it is not for
Someone with no textile background or effluent-treatment plan.
Advantages
- Towels are a daily-use item for homes, hotels and hospitals
- Low break-even (28%)
- India is a large towel maker and exporter
- Hotels and hospitals buy in bulk
Drawbacks
- Yarn prices swing with cotton
- Bleaching and dyeing create effluent
- Competition from Solapur, Karur and Panipat clusters
- Quality (GSM, absorbency) must stay even
Skills you need
- Power loom operation
- Bleaching and dyeing
- Quality checks for GSM and absorbency
- Selling to institutions and wholesalers
Why difficulty 3/5: Moderate capital and a known process; effluent and yarn prices need care.
§3Market
Who buys
- Households
- Hotels and hospitals
- Gyms, salons and spas
How it sells
- Textile wholesalers
- Direct supply to hotels and hospitals
- Retail and online stores
Good to know
- The report cites the global bath towel market at USD 9,820 million in 2018.
- It notes Asia makes and exports most bath towels and Europe imports the most.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Power loom | 1 | ₹5.00 lakh |
| Terry towel fabric dyeing machine | 1 | ₹1.25 lakh |
| Towel length cutting machine | 1 | ₹10.00 lakh |
| Stitching machine | 1 | ₹25,000 |
| Boiler | 1 | ₹50,000 |
| Material handling and other equipment | 1 | ₹50,000 |
From: PMEGP sample project report — Towel Manufacturing (prepared by Udyami/Samadhan)
- Yarnspun with synthetic fibre and polyester, as the report states
- PVA starchfor sizing
- Bleaching materialhydrogen peroxide, caustic, defoamers and other chemicals
From: PMEGP sample project report — Towel Manufacturing (prepared by Udyami/Samadhan)
Suppliers in Building Business Bazaar
Bombay Textiles Research Association (BTRA), Mumbai · Mumbai →Northern India Textile Research Association (NITRA), Ghaziabad · Ghaziabad →Terry Towel Cluster, Solapur · Solapur →
In our raw material database
§5Licences & registration
- Udyam registration
- GST registration
- State Pollution Control Board consent (bleaching and dyeing effluent)
- Factory licence if worker count crosses the limit
- Trademark for the brand
§6Schemes & subsidies
PMEGP fits this ₹23.42 lakh manufacturing project; CGTMSE gives collateral-free cover.
§7Money
How the investment is worked out: Sample report total ₹23.42 lakh: plant & machinery ₹17.50 lakh, furniture & fixtures ₹1.00 lakh, working capital ₹4.92 lakh. Land own or rented. Finance: term loan ₹16.65 lakh, working-capital loan ₹4.43 lakh, own share ₹2.34 lakh.
Working capital: Working capital ₹4.92 lakh (bank ₹4.43 lakh); 10 days of stock, 15 days' credit both ways.
Year not printed on the sample report — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: Cotton Textiles Export Promotion Council (TEXPROCIL)
- Get an IEC and register with TEXPROCIL before exporting towels.
§9Risks — where people fail
- Yarn price rises
- Effluent rules
- Competition from large mills
- Power cuts
§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 towel 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
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 Towel 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.