What is the Procedure for opening a New Manufacturing Company?

new manufacturing company
Dashmeet Kaur
| Updated: Apr 13, 2020 | Category: Other Services, Producer Company

The manufacturing sector has played a pivotal role in the growth of the Indian economy. Considering the contribution of manufacturers, Prime Minister, Mr. Narendra Modi, launched a new program called “Make in India” on 25th September 2014. The purpose is to foster innovation, facilitate investments, enhance skills, and guard intellectual property to build the best manufacturing infrastructure in the country. As per a report, India is prospective to be the 5th largest manufacturing country across the world by the end of this year. Further, the Government aims to accomplish 25% GDP share and create around 100 million job opportunities in the manufacturing sector by 2022.

If you also intend to start a new manufacturing company, this write-up shall provide you substantial knowledge of the same.

How is “Make in India Program” beneficial for Manufacturing Sector?

The propaganda of Make in India has turned out to be a blessing for the manufacturing industry. The Indian Government has adequately emphasized on the development of 25 priority sectors in the manufacturing business with this scheme which are mentioned below:

Automobile Components Food Processing Roads and Highways
Automobiles IT and BPM Renewable Energy
Aviation Leather Space
Biotechnology Mining Thermal Power
Construction Media and Entertainment Tourism and Hospitality
Chemicals Oil and Gas Textiles and Garments
Defence Manufacture 

  • Boost Economic Growth:  The campaign of “Make in India” is a gateway for an increased number of exports and manufacturing activities. A rise in exports will uplift the economy and transform India into a manufacturing hub. It opens doors for foreign investments with advanced technology, thus boost India’s GDP.
  • Create more Job Opportunities: The program is a route for several job opportunities. It is expected to generate around ten million jobs. An increase in investment has a direct impact on the manufacturing job market and helps to refurbish the skills of human labour. 
make in india
  • Escalate Foreign Direct Investments: After the enforcement of “Make in India,” there has been a considerable hike in Foreign Direct Investments. Due to the ease of commencing manufacturing business, more companies are looking to set up factories to manufacture their products.
  • Make in India unit: The Department of Commerce facilitates manufacturers to easily carry out regulatory clearance within the shortest period and ensures that businesses can be done easily.

Factors to consider while setting up a Manufacturing Business

These are some essential things to keep in mind before starting a new manufacturing company:

  • Set-up Partnership Firm– As a start-up, you should associate with big manufacturers. Create innovative strategies so that large manufacturing units collaborate with you.
  • Thorough Market Research– If you are seeking to be a manufacturer or set your own manufacturing unit, you need to conduct extensive market research. Make use of trade journals and fairs to research and connect with existing manufacturers.
  • Make a Robust Team- Human asset management is the most efficient way to empower a business. It is imperative to assess the abilities of your manufacturers before distributing the roles & responsibilities. 
  • Get Legal Licenses or Registrations- There are some legal provisions and compliances that every business must adhere to. Similarly, a manufacturing business must register with the Government.
  • Expand in big markets- It’s good tostart small, but to gain success, a manufacturer must penetrate the large markets.  Choose a niche that has more demand and less competition to sustain in the industry.
  • Keep low cost in production- Make optimal use of resources to generate more revenue. Keep your production cost low, which is only possible when you stick to a budget.

Licenses required for Manufacturing Company  

Different types of businesses follow various rules and regulations. Likewise, there is much legal compliance associated with a manufacturing firm, so you must obtain the most common licenses or registration to open a new manufacturing company:

  • Factory License from the local authority- Any manufacturing unit with less than 10 employees needs to get a Factory License from the district officer or local authority. Also, the companies with more than 10 workers should get a license from the State headquarters.
  • SSI/MSME Registration- Small manufacturers can avail several benefits by registering under the MSMED Act, such as collateral-free credit, lower electricity bills, and subsidies. 
  • NSIC Registration-Similar to MSMED Act, NSIC Registration also aid, promote, and foster the growth of small and large manufacturing units.
  • Environment and Pollution related Clearance- Any entrepreneur who strives to set up a manufacturing company must take a No Objection Certificate from the State Pollution Control Board before carrying the manufacturing activities.

Business ideas to open a new Manufacturing Company  

To gain a competitive edge in the cutting throat competitive manufacturing market, you should have some unique business ideas. Some of the peculiar ideas to start a new manufacturing company are:

  • Candle-Making
  • Plastic Bottle
  • Sport related goods
  • Stationary Items
  • Fertilizers 
  • Leather Goods

Procedure to open a Manufacturing Unit

Take the following steps to incorporate a manufacturing business in India:

  • Conduct Research-The success or failure of a company depends upon its research strategies. It is important to know about the level of the competition you may have to face after incorporating the business.
  • Determine Location- Location is a crucial factor of a business, so determine where you will set your factory or manufacturing unit. Also, decide on the market in which you will sell your products.
  • Make a strong team- After fixing the location and product line, you should employ experienced manufacturers. Distribute roles and responsibilities in different departments like operations, sales, marketing, inventory management, public relations, etc.
  • Apply for Registrations- Any business without registration is considered as illegal. Therefore, take assistance from professionals and do MSME/ NSIC, Company registration to carry the manufacturing activities.


The process of starting a new manufacturing business is a daunting task. One needs to consider an array of factors like product line, market, location to establish the manufacturing business. To legitimize your business take the guidance of Swarit Advisors. We hold expertise in company registration and help you in the legal procedure. 

Read, More:How to set up a Mineral Water Plant in India


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