How to Start a Cosmetics (Compact, Kajal, Eyeliner, etc.) Manufacturing Business in India

Cosmetics manufacturing in India has seen significant growth over the past decade, making it a highly attractive business opportunity for entrepreneurs. The Indian beauty and personal care industry crossed ₹1.4 lakh crore in 2023 and is expanding at a robust CAGR of 10–12%. This growth is fueled by rising disposable incomes, increasing urbanisation, strong social media influence, and growing demand for daily-use colour cosmetics. Products such as compact powders, kajal, eyeliners, lipsticks, and foundations are among the fastest-growing segments, particularly in the affordable and mass-market categories.

For aspiring entrepreneurs, entering cosmetics manufacturing in India presents a major opportunity. With strong government support through initiatives like Make in India, various MSME schemes, and improved ease of doing business, setting up a cosmetics manufacturing unit has become more accessible and scalable. Both private label manufacturing and own-brand cosmetic production are gaining momentum across the country.

This guide provides a comprehensive, step-by-step overview of how to start cosmetics manufacturing in India, covering essential aspects such as required licenses and registrations, investment and infrastructure planning, manufacturing setup, business models, marketing strategies, and long-term growth opportunities in the Indian cosmetics industry.

1. Understanding the Cosmetics Market in India

Before starting production, it’s essential to understand Indian consumer behaviour and industry trends:

• The colour cosmetics market (compact, kajal, eyeliner, lipstick, etc.) is driven largely by women aged 18–35, but the men’s grooming segment is also expanding.
• Tier 2 and Tier 3 cities are emerging as strong markets.
• Natural, herbal, and chemical-free cosmetics are gaining popularity.
• E-commerce sales of cosmetics are rising at 20%+ annually, with platforms like Nykaa, Purplle, and Amazon playing major roles.
• Demand for affordable cosmetic products under ₹150–₹400 remains the highest.

This creates a favourable environment for new manufacturers to enter the market with competitive pricing and quality.

2. Step-by-Step Process to Start a Cosmetics Manufacturing Business in India

Step 1: Conduct Market Research

Analyse:

• Product demand (e.g., compact vs kajal)
• Competitor pricing
• Raw material suppliers
• Target audience (local, regional, all-India)
• Packaging preferences

Step 2: Finalize Your Product Line

Begin with 2–4 high-demand items:

• Compact Powder
• Kajal Pencil or Liquid Kajal
• Eyeliner (liquid, gel or pen)
• Lipstick or Lip Gloss (optional)

Your selection should depend on budget, expertise, and market gaps.

Step 3: Prepare a Business Plan

Include:

• Investment and working capital estimates
• Machinery and manpower requirements
• Regulatory compliance
• Production capacity
• Branding and marketing strategy

Step 4: Select a Suitable Location

Ideal setup:

• Industrial area (recommended for easier approvals)
• Minimum 600–1200 sq ft for small-scale manufacturing
• Adequate ventilation, water supply, drainage, and electricity

Step 5: Set Up Manufacturing Infrastructure

Your facility should be divided into:

• Raw material storage room
• Manufacturing room
• Quality control (QC) lab
• Packaging area
• Finished goods warehouse

Step 6: Procure Machinery and Equipment

Common machines needed:

• Mixing and blending machines
• Heating kettle
• Pulveriser (for compact powder)
• Filling machines (for kajal/eyeliner)
• Moulding machines
• Sterilization and filtration units
• Packaging machines
• Lab testing equipment

Step 7: Hire Skilled Workforce

You will need:

• Cosmetic chemist/formulation expert
• Machine operators
• QC staff
• Packaging and warehousing team

Step 8: Develop Product Formulations

Work with a trained cosmetic chemist to develop:

• Safe, skin-friendly, BIS-compliant formulations
• Stability tested batches
• Prototype samples

Step 10: Begin Production & Marketing

Once approvals are received, you can start:

• Batch-wise production
• Quality testing
• Packaging and labeling
• Distribution and marketing

💡 Ready to launch your Cosmetics (Compact, Kajal, Eyeliner etc.) Manufacturing business but don’t know where to start?

3. Legal Requirements & Licenses for Cosmetic Manufacturing in India

Manufacturing cosmetics in India is regulated under The Drugs and Cosmetics Act, 1940 and Rules, 1945.

Mandatory Licenses

1. Cosmetic Manufacturing License
   • Issued by the State Drugs Control Department.
   • Required for manufacturing items like compact, kajal, eyeliner, lipstick, etc.
   • Granted under Form 32 (license) and Form 31 (application).
2. Factory License (from local authorities)
3. GST Registration:
   • GST registration is mandatory for cosmetics manufacturing businesses in India to sell legally and claim input tax credit.
4. BIS Standards Compliance (where applicable)
   • Many cosmetic categories have ISI standards related to safety and labeling.
5. Trade License / Shop Establishment Certificate
6. Trademark Registration (for brand protection)

Labeling Requirements (as per CDSCO guidelines)

Cosmetic packaging must include:

• Product name
• Manufacturing date & batch no.
• Ingredient list
• Net quantity
• Shelf life
• MRP
• Caution statements (if required)
• Manufacturer’s details

Non-compliance may lead to rejection, fines, or closure.

4. Estimated Investment for Starting a Cosmetics Manufacturing Unit

Initial Setup Costs (approximate):

Component	Estimated Cost Range (₹)
Machinery & equipment	3,00,000 – 12,00,000
Raw materials (first batch)	1,00,000 – 3,00,000
Packaging materials	80,000 – 2,00,000
Factory setup & interiors	1,50,000 – 5,00,000
Licensing & registration	25,000 – 1,00,000
Working capital (2–3 months)	2,00,000 – 5,00,000

Total Investment: ₹8 lakh – ₹25 lakh (varies by scale, location, and product line)

5. Business Model & Revenue Streams

A cosmetic manufacturer in India can earn through multiple channels:

1. Direct Wholesale Supply

Sell to:

• Cosmetic distributors
• Retail shops
• Beauty supply stores
• Pharmacy chains

2. Private Label/Contract Manufacturing

Many new brands prefer outsourcing. You can manufacture products under their brand name.

3. Online D2C Selling

Sell via:

• Own website
• E-commerce platforms
• Social commerce

4. Institutional Supply

Supply to:

• Salons
• Makeup academies
• Spa chains
• Hotels

6. Marketing Strategies for Cosmetics Manufacturing

1. Local SEO for Regional Visibility

Use long-tail keywords like:

• “cosmetics manufacturer in [City/State]”
• “private label cosmetic manufacturer in India”
• “start cosmetics manufacturing in India”

Optimize:

• Google Business Profile
• Local directories
• NAP consistency (Name, Address, Phone)

2. Social Media Marketing

Platforms:

• Instagram
• Facebook
• YouTube
• Pinterest

Post:

• Before-after product demos
• Behind-the-scenes manufacturing
• Educational content about ingredients

3. Influencer Collaborations

Micro-influencers help build trust and brand recall.

4. Packaging & Branding

High-quality packaging increases perceived value and trust.

5. B2B Sales Outreach

Attend:

• Beauty expos
• MSME fairs
• Industry conferences

7. Challenges in Cosmetics Manufacturing

While the industry is rewarding, it also comes with challenges:

• High competition in colour cosmetics
• Compliance with strict quality standards
• Maintaining consistent formulations
• Need for regular R&D
• Packaging quality and supply chain dependencies
• Branding costs for market entry

8. Growth Opportunities in India’s Cosmetics Sector

Demand for cosmetics is rising across:

• Herbal and ayurvedic cosmetics
• Vegan and cruelty-free makeup
• Organic kajal and chemical-free eyeliners
• Budget-friendly compact powders for daily use
• Men’s grooming and eye-care cosmetics

The government supports MSMEs through:

• Subsidized loans under CGTMSE
• Schemes under MSME Ministry
• Incentives for manufacturing under Make in India

This makes it an ideal time to enter the industry.

9. Future Potential

India is projected to become one of the top 5 global cosmetic markets by 2030. Increasing awareness of personal grooming, online beauty tutorials, and rising demand from smaller cities will continue to fuel growth. Manufacturers with strong quality standards, branding, and distribution networks can scale rapidly.

Conclusion

Starting a cosmetics manufacturing business in India—especially in high-demand products like compact powders, kajal, and eyeliners—offers immense potential for growth. With rising consumer demand, supportive government policies, and expanding e-commerce, the industry provides attractive opportunities for new entrepreneurs. Success depends on maintaining high manufacturing standards, obtaining the right licenses, building strong branding, and adopting modern marketing strategies such as Local SEO and influencer outreach.

By planning carefully and following the required legal and technical steps, you can establish a profitable cosmetic manufacturing unit and build a long-lasting brand in India’s growing beauty industry.

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