How to Start a Lip Balm And Lip Scrub Manufacturing Business in India

India’s demand for natural, herbal, and chemical-free personal care products has grown significantly in the past decade. Within this booming sector, lip balms and lip scrubs have become high-demand skincare essentials—driven by rising grooming awareness, lifestyle changes, and increased preference for clean beauty formulations. As per IMARC 2024, the Indian beauty and personal care market is expected to reach ₹2.3 lakh crore by 2028, with the lip care segment showing strong and steady growth due to consumer interest in organic and toxin-free ingredients.

For new entrepreneurs, MSMEs, and cosmetic startups, understanding how to start a lip balm & lip scrub manufacturing business in India opens a profitable and scalable opportunity. Low setup costs, simple formulations, and high repeat purchase rates make this industry ideal for both small and medium-scale ventures.

This comprehensive guide covers everything you need—from licenses, investment, and raw materials to business models and marketing strategies—to successfully start a lip balm & lip scrub manufacturing business in India.

1. Market Overview: Why Start Lip Balm & Lip Scrub Manufacturing in India?

✔ Rising demand for natural skincare

More Indian consumers prefer paraben-free, cruelty-free, vegan, and ayurvedic lip care products. Brands like Mamaearth, Just Herbs, and Biotique have proven that the market is ripe for innovation.

✔ Affordable raw materials

India has easy availability of beeswax, shea butter, cocoa butter, essential oils, herbal extracts, and natural exfoliants like sugar and coffee.

✔ Booming e-commerce ecosystem

Platforms like Amazon, Flipkart, Nykaa, Meesho, and Instagram Shops make it simple for new brands to enter the market.

✔ Growing men’s grooming market

This segment alone is expected to grow at 11–13% CAGR, boosting demand for lip care products.

✔ Low investment requirement

A small-scale lip balm manufacturing unit can start with an investment of ₹3–10 lakh, depending on scale.

2. Step-by-Step Process to Start Lip Balm & Lip Scrub Manufacturing in India

Step 1: Conduct Market Research & Identify Your Niche

Choose your product segment such as:

  • Organic lip balms
  • Herbal lip scrubs
  • Tinted lip balms
  • Ayurvedic lip treatments
  • Kids-safe lip balms
  • Men’s lip care range
  • Premium luxury lip care

Identify:

  • Target audience
  • Competitors
  • Pricing strategy
  • Unique selling point (USP)

Step 2: Create a Business Plan

Your business plan should include:

  • Product list & formulations
  • Estimated budgeting
  • Raw material suppliers
  • Machinery requirement
  • Packaging plan
  • Sales channels (online/offline)
  • Marketing strategies

A well-structured business plan is essential for applying for MSME loans or subsidies.

Step 3: Set Up Your Manufacturing Unit

Choose a small industrial space or commercial unit (250–800 sq. ft. depending on production capacity).

Infrastructure Requirements

  • Clean processing area
  • Storage for raw materials
  • Mixing and heating area
  • Quality testing zone
  • Packaging area
  • Office/administration

Step 4: Machinery & Equipment Required

Here is the common equipment list:

Machinery / Equipment

Approx. Cost (₹)
Double jacketed heating & mixing vessels 80,000 – 2,50,000
Stainless steel utensils 20,000 – 50,000
Weighing scale 2,000 – 8,000
Temperature-controlled mixer 25,000 – 60,000
Filling machine (manual/automatic) 25,000 – 2,00,000
Lip balm mold trays 5,000 – 20,000
Lip scrub container filling tools 10,000 – 25,000
Packaging & labeling setup 20,000 – 50,000

Total Estimated Machinery Cost: ₹2–5 lakh (small scale)

Step 5: Raw Materials Required

For Lip Balm

  • Beeswax or candelilla wax
  • Shea butter/cocoa butter
  • Carrier oils (coconut oil, almond oil, jojoba oil)
  • Vitamin E
  • Essential oils (mint, lavender, vanilla, orange, rose)
  • Natural tints (beetroot powder, cocoa)

For Lip Scrub

  • Sugar (brown/organic)
  • Coffee powder
  • Honey
  • Essential oils
  • Natural flavors
  • Natural colorants

India has extensive suppliers in:

  • Delhi
  • Mumbai
  • Ahmedabad
  • Hyderabad
  • Bengaluru
  • Coimbatore

Step 6: Manufacture the Products

Lip Balm Manufacturing Process

  1. Melt waxes and butters in a double-jacketed vessel.
  2. Add oils and natural extracts.
  3. Blend thoroughly for smooth consistency.
  4. Add fragrance or essential oils at the right temperature.
  5. Pour into lip balm molds or tubes.
  6. Cool and solidify.
  7. Package and label.

Lip Scrub Manufacturing Process

  1. Mix sugar or natural exfoliants.
  2. Add oils and natural flavors.
  3. Blend gently to maintain grainy texture.
  4. Add natural preservative (if required).
  5. Fill containers and label.

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Talk to our industry expert today and get personalized guidance to build a profitable, scalable lip care brand in India!

To manufacture cosmetic products in India, you must comply with the Drugs & Cosmetics Act, 1940.

✔ Mandatory Licenses

  1. Manufacturing License (Form 32 / 31)
     Issued by the State Food & Drug Administration (FDA).
     Required for manufacturing cosmetic products.
  2. GST Registration
    For selling products across India, GST registration is required.
  3. MSME / Udyam Registration
     Helps in availing subsidies and loans.
  4. Trade License
     From the local municipal authority.
  5. BIS Certification (optional but recommended)
     For credibility and quality assurance.
  6. Trademark Registration
     Protect your brand name and logo.

Additional Compliance:

  • Proper labeling as per CDSCO standards
  • Ingredient listing
  • Batch number and manufacturing details
  • Shelf life and usage instructions

4. Investment Required to Start Lip Balm & Lip Scrub Manufacturing in India

Estimated Cost Breakdown

Category Approx. Cost (₹)
Machinery & equipment 2,00,000 – 5,00,000
Raw materials 50,000 – 1,50,000
Packaging materials 30,000 – 1,00,000
Licenses & approvals 10,000 – 50,000
Rent & utilities 15,000 – 40,000/month
Marketing & branding 50,000 – 2,00,000
Miscellaneous 50,000 – 1,00,000

Total Initial Investment:

👉 ₹3–10 lakh (small scale)
 👉 ₹15–30 lakh (medium scale)

5. Business Model & Revenue Streams

Primary Revenue Channels

  1. D2C Brand (Direct-to-Consumer)
     Sell on your own website.
  2. E-commerce Marketplaces
     Amazon, Flipkart, Nykaa, Meesho, JioMart.
  3. Wholesale & B2B Supply
     To salons, spas, cosmetic stores, boutique brands.
  4. Contract Manufacturing / Private Labeling
     Manufacture for other brands—highly profitable.
  5. Offline Retail Distribution
     Local cosmetic shops, pharmacies, supermarkets.

Profit Margin

Lip balms typically have a 40–60% profit margin, lip scrubs can have 50–70% margins due to low manufacturing cost.

6. Marketing Strategies (SEO + Digital + Offline)

✔ Build a strong brand identity

  • Highlight organic, natural, or ayurvedic ingredients.
  • Create premium yet eco-friendly packaging.

✔ Local SEO Optimization

  • Create a Google Business Profile.
  • Rank for local keywords:
    • “Lip balm manufacturer in [city]”
    • “Cosmetics manufacturing near me”
  • Add customer reviews, product photos, and NAP consistency.

✔ Digital Marketing Strategies

  • Instagram & Facebook ads
  • Influencer marketing with beauty bloggers
  • YouTube tutorials & product demonstrations
  • Consistent posting on Pinterest, Instagram Reels
  • Email marketing campaigns
  • SEO-optimized blogs on your brand website such as:
    • “Best natural lip balm ingredients in India”
    • “Why lip scrubs are essential for Indian summers”

✔ Packaging & Branding

Unique packaging attracts repeat customers. Use recyclable or sustainable materials to appeal to modern consumers.

✔ Participate in Exhibitions & B2B Events

Events like CosmoTech Expo India, Ayurveda Expo, and India Beauty & Hygiene Expo help meet distributors and export partners.

7. Challenges in Lip Balm & Lip Scrub Manufacturing

1. High competition

Market is crowded, so branding and quality matter.

2. Strict compliance standards

Cosmetic regulations require accurate labeling and ingredient safety.

3. Maintaining consistent product quality

Requires good formulation expertise and quality testing.

4. Sourcing premium natural ingredients

Costs may fluctuate based on season and purity.

5. Differentiation

Creating a unique USP is crucial to stand out.

8. Growth Opportunities in India

✔ Export potential

Demand for herbal cosmetics is high in the Middle East, Europe, and Southeast Asia.

✔ Tier-II & Tier-III city expansion

Growing beauty awareness boosts sales in smaller towns.

✔ Men’s grooming & kids’ personal care

Two fast-emerging segments.

✔ Opportunity in specialized lip care

SPF lip balms
 Anti-pigmentation lip balms
 Ayurvedic lip oils
 Hydrating lip masks

9. Government Support, Subsidies & Schemes

Entrepreneurs manufacturing lip care products can benefit from:

MSME Schemes

  • Credit Guarantee Fund Scheme
  • PMEGP Loan Scheme (up to 35% subsidy)
  • CLCSS Subsidy for machinery

Startup India benefits

  • Tax exemptions
  • Reduced compliance
  • Easier patent & trademark support

State-level industrial subsidies

  • Maharashtra, Gujarat, Tamil Nadu, Karnataka, Telangana

Conclusion

Starting a lip balm and lip scrub manufacturing business in India is a profitable and scalable opportunity, especially with rising consumer demand for natural, chemical-free skincare products. With the right licensing, quality formulas, branding, and digital marketing strategies, new entrepreneurs can successfully create a strong presence in the booming Indian beauty market.

By investing ₹3–10 lakh, understanding regulations, and building a unique product line, you can establish a sustainable cosmetics manufacturing business with excellent growth potential in India and international markets.

💡 Want to grow your Lip Balm & Lip Scrub brand online?

Explore our complete guide on Digital Marketing for Lip Care Businesses and learn how to boost sales, increase brand visibility, and build strong customer trust across India’s rapidly growing beauty and personal care market!