Introduction: Market Overview – How to Start a Papad and Khakhra Manufacturing Business in India

The Indian papad and khakhra industry is one of the fastest-growing segments within the traditional snacks category. With the packaged food sector expanding rapidly due to evolving lifestyles, rising urbanization, and the increasing preference for ready-to-eat snacks, the demand for high-quality papad and khakhra continues to surge. As per FMCG market insights, the domestic snacks market in India is valued at over ₹1.2 lakh crore, and traditional products like papad and khakhra form a significant and steadily increasing portion of this market.

Popular brands such as Lijjat Papad, Ganesh Papad, and leading Gujarati khakhra manufacturers have showcased the immense potential of this business—highlighting its profitability, low startup investment, and excellent scalability. With consumers becoming more conscious about hygiene, packaging, and product variety, the market for standardized, flavored, and machine-made papad and khakhra is larger than ever.

If you are researching how to start a papad and khakhra manufacturing business in India, this comprehensive guide will walk you through everything you need to know—from investment requirements and licenses to production, branding, and marketing strategies.

1. Step-by-Step Process to Start a Papad & Khakhra Manufacturing Business in India

1. Conduct Market Research

Before investing, conduct local research to understand:

  • Preferred flavors in your region
  • Demand from retail shops, supermarkets, and wholesalers
  • Competition from local and branded manufacturers
  • Preferred packaging sizes and price ranges

This helps you determine a viable market entry strategy.

2. Decide Your Product Range

You can start with basic items or offer premium, value-added variants:

Papad Varieties:

  • Urad dal papad
  • Moong dal papad
  • Masala papad
  • Rice papad
  • Jain papad

Khakhra Varieties:

  • Plain
  • Jeera
  • Masala
  • Methi
  • Diet khakhra
  • Multigrain

Offering unique flavors or health-focused options can give you a competitive advantage.

3. Create a Business Plan

A detailed business plan helps with budgeting and expansion. Include:

  • Target market
  • Pricing strategy
  • Raw material suppliers
  • Packaging design
  • Brand development
  • Operating expenses
  • Funding requirements

4. Setup Manufacturing Unit

Choose a location with good connectivity, water availability, and hygiene. A small-scale unit requires:

  • 300–500 sq. ft. for startup
  • Proper ventilation and drainage
  • Separate space for production, drying, and packaging

5. Procure Machinery & Equipment

Depending on scale, you can choose manual, semi-automatic, or fully automatic machines.

Basic Equipment for Papad Manufacturing:

  • Dough kneader
  • Papad making machine (manual/automatic)
  • Rolling machine
  • Drying racks or electric dryer
  • Flour mixing machine
  • Packaging machine

Equipment for Khakhra Manufacturing:

  • Dough kneader
  • Khakhra making machine
  • Roasting/rolling machine
  • Tawa/roaster
  • Packaging machine

6. Hire Skilled Workers

For small scale, 4–6 workers are enough for dough preparation, rolling, roasting, drying, quality check, and packaging.

7. Start Trial Production

Make small batches, test taste, shelf life, crispiness, and packaging durability. Adjust ingredients and process to match customer expectations.

To start a papad & khakhra manufacturing business legally, you must obtain:

1. FSSAI Registration or License

Mandatory for all food-related businesses.
 You can apply for:

  • Basic FSSAI Registration (for turnover < ₹12 lakh)
  • State License (for ₹12 lakh to ₹20 crore turnover)

2. GST Registration

Required for invoicing and taxation compliance under GST registration.

3. MSME / Udyam Registration

Helps you avail benefits like subsidies, loans, and government support schemes.

4. Trade License

Issued by local municipal authorities.

5. BIS Certification (Optional but increases trust)

Papads can comply with IS 2639 standards.

6. Trademark Registration

To protect your brand name and packaging design.

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3. Estimated Investment, Infrastructure & Equipment Cost

Starting a papad or khakhra unit is relatively affordable. Investment depends on production capacity.

Small-Scale Setup Cost (Approx.):

Category Estimated Cost
Machinery & equipment ₹80,000 – ₹3,00,000
Raw materials (dal, spices, flour, oil) ₹20,000 – ₹50,000
Packaging materials ₹10,000 – ₹30,000
Rent & utilities ₹10,000 – ₹30,000 per month
Labor cost ₹15,000 – ₹50,000
Miscellaneous ₹20,000

Total Estimated Investment: ₹1.5 lakh – ₹5 lakh

Large-scale units can go up to ₹10–20 lakh depending on automation.

4. Business Model & Revenue Streams

You can adopt multiple business models:

1. Retail-focused Model

Sell directly to local grocery stores, supermarkets, and kirana shops.

2. Wholesale Distribution

Supply in bulk to wholesalers and snack distributors.

3. Online Sales

Sell through:

  • Instagram
  • WhatsApp Business
  • Your brand website
  • E-commerce platforms

4. Institutional Sales

Supply to:

  • Hostels
  • Mess
  • Catering companies
  • Corporate canteens

5. Export Model

Indian papad has huge demand in UAE, USA, UK, and Southeast Asia.

5. Marketing Strategies (Including Local SEO & Digital Marketing)

1. Local SEO Optimization

  • Add your business to Google Business Profile
  • Use keywords like “papad manufacturer near me”, “khakhra supplier in [city]”
  • Collect customer reviews for credibility
  • Add high-quality product images

2. Social Media Marketing

Use Instagram and Facebook for:

  • Product photos
  • Recipe reels
  • Customer testimonials
  • Packaging showcases

3. Distributor Network

Build relationships with wholesalers and retail store owners.

4. Attractive Packaging

Use airtight, convenient, and visually appealing packaging to stand out.

5. Free Sampling

Offer samples to nearby shops and distributors to quickly gain market entry.

6. Participate in Food Exhibitions

Helps in expanding distribution channels and gaining visibility.

6. Challenges in Papad & Khakhra Business

  • Maintaining consistent taste and texture
  • Seasonal dependency for drying (if sunlight-based)
  • High competition from local brands
  • Ensuring hygiene and quality standards
  • Efficient distribution management

7. Growth Opportunities

  • Rising demand for ready-to-eat snacks
  • Increasing acceptance of premium and health-focused variants
  • Export potential for Indian snacks
  • Scope for product diversification (baked, multigrain, millet-based)

8. Future Potential & Government Support

The Indian government supports MSMEs through:

  • PMEGP Loan Scheme for manufacturing units
  • CGTMSE collateral-free loans
  • NSIC Subsidies for machinery
  • State-level food processing schemes

With rising domestic consumption and demand for hygienic snacks, the papad and khakhra industry has excellent future scope.

Conclusion

Starting a papad & khakhra manufacturing business in India is a profitable, scalable, and sustainable venture. With low investment, huge domestic demand, and opportunities in exports, this sector offers significant growth potential. By following proper licensing, ensuring hygiene, maintaining quality, and focusing on digital marketing, entrepreneurs can successfully establish their brand and achieve steady profits.

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