Being an entrepreneur is a big dream. Most individuals believe that you have to have a lot of money to start. But that’s not always true. Nowadays you can open a great business ideas under 5 lakhs in India. The nation is developing rapidly, and there exist numerous opportunities for all people.
Let’s look at some numbers. There are more than 8 crore small businesses in India commonly referred to as MSMEs. The economy depends on these businesses. The government also aims at assisting more people to start their own companies. The job market is expanding as revealed by a recent report that indicated that over 1.4 crore individuals had registered new jobs in the formal sector. More individuals in the villages and small towns are also accessing the internet as never before. More than 80 crore Indians have gone online. This implies that you will be able to access customers in any part of the country.
Why 5 lakhs is enough to start a Profitable Business.
You may ask, is 5 lakhs enough? Yes, it is. Here’s why.
- Technology has rendered things cheaper: You do not have to have a large office or a posh store. It is possible to sell your products on such websites as Amazon or Flipkart. Communicating with customers via social media such as Instagram and Facebook is free. This will save a lot of money on advertising.
- Great number of new machines which are smaller and cheaper: You do not need to spend a lot of money on purchasing the equipment to make such things as candles, soaps, or spices. The machines do not require a huge factory since they can fit in a small room.
- There is a change in the habits of people: There are a lot of customers who prefer to purchase handmade, organic or local products. They have more faith in small businesses. This will provide you with a competitive edge. You are able to reach your customers themselves and gain some trust.
- Government is supporting small business: New entrepreneurs are provided with loans and schemes. That is why you can afford to spend 5 lakhs on a budget and you can purchase materials, do some marketing and cover your expenses in the first few months. You can begin with a small scale, acquire knowledge and expand your business larger.
List of Best Business Ideas Under 5 Lakhs in India (2025)
The following is a list of 20 business ideas under 5 lakhs. We have separated them into various groups to assist you in making a decision.
A) Under 5 Lakhs manufacturing business ideas.
Production entails doing it yourself. It can be easily established by simply investing a little in a small unit at home or a small workshop.
1. Candle and Incense Stick Production
Agarbatti incense sticks and scented candles are always in demand. They are used by people during festivals, prayers, relaxation and decoration of their homes. Indian home fragrance market is expanding at an average rate of more than 12 percent annually. It is one of the best business ideas under 5 lakhs.
You have an option of making special candles of various smells, colors and shapes. In the case of incense sticks, herbs and flowers can be used to make natural fragrances. There are low costs of raw materials in this business. You can begin with one room and distribute your products to the local shops, online shops, and even hotels or spas. Your quality and your distinctive smells will distinguish you.
- Earnings: You are able to make 30,000 to 70,000 per month.
- Investment Needed: ₹80,000 to ₹2,00,000. This consists of funds to buy wax, wicks, scents, and moulds as well as a simple candle-making machine.
2. Manufacturing Soaps or Detergent.
Consumers are getting highly cautious regarding what they apply on their skin. They desire natural and chemical free products. The Indian organic personal care market will reach ₹15,000 crore by 2026. The ingredients that can be used to make handmade soaps are neem, aloe vera, turmeric, and essential oils.
In the same way, you can make environmentally friendly, low-chemical detergents. It is one of the best startup ideas under 5 lakhs. You may begin this in your kitchen. To begin with, sell to friends and family, and then move on to local markets and online stores such as Etsy or Instagram. A good package and narration of how your natural ingredients came into being will be a plus to many customers.
- Earnings: 25,000 -60,000 per month.
- Investment Needed: ₹1,00,000 to ₹2,50,000. This includes the expense of the raw materials, equipment used in the production of the soap, safety equipment and packaging.
3. Paper Bag / Eco‑Packaging Unit
In most locations, the Indian government has prohibited the use of single-use plastics. This has presented a massive market to paper bags and other environmentally friendly packaging. All the shops, restaurants, and delivery services require paper bags. Indian paper bag market has a very rapid growth rate of more than 8 per cent. per year.
It is one of the best business ideas under 5 lakhs. A paper bag-making machine is not that expensive and can be purchased. You may prepare bags of various sizes and sell them to the local businesses in your neighborhood. It is a business that contributes to the environment and makes good money.
- Income Potential: 40000-80000 per month based on your production.
- Investment Needed: ₹2,50,000 to ₹4,50,000. The bulk of this capital expenditure is spent on the purchase of the paper bag-making machine and unrefined paper rolls.
4. Jute or Cotton Bag Making
Jute and cotton bags are equally popular just like paper bags. They are powerful, reusable and fashionable. A lot of individuals shop with them and businesses use them in advertisements and offers. It is one of the trends in the world towards sustainable products. The market of jute bags will reach more than 3 billion dollars worldwide by 2026.
Sewing machines and raw materials such as jute or cotton cloth will be required. You are able to make stylish bags that people are fond of being carried around. You can sell them in craft shows, online or sell them directly to business that require them to package their products.
- Earnings: 35,000-75,000 a month.
- Investment Needed: ₹1,50,000 to ₹3,00,000. This involves purchasing some industrial sewing machines, cloth, printing materials and recruiting some workers.
5. Spice or Pickle Manufacturing Unit
India is fond of spices and pickles (achar). They are used by all houses on a daily basis. The pickle market has an independent value of over 1200 crore. Even when you have a good family recipe of pickles or a certain combination of spices, then you can make it a business. It is possible to produce products at home of high standards of cleanliness.
Begin with selling in your community and then deliver to the nearby grocery outlets. The keys to success are good taste and clean packaging. It is common that people would be ready to pay more money on homemade food which tastes genuine and is prepared with attention.
- Income Potential: 30,000 -60,000/month.
- Investment Needed: ₹70,000 to ₹2,00,000. (This includes raw materials such as fruits, vegetables, spices; jars; kitchen ware and a food license (FSSAI).)
B) Villages and Rural India, Business Ideas below 5 Lakhs.
Villages are changing. Improved roads, electricity and internet have created numerous new business opportunities in rural India.
6. Poultry Business or Dairy Farm
The demand is always high in milk, eggs and chicken. In the country, there is room to begin a small dairy or poultry farm. India is the largest milk producer in the world yet the demand is increasing. It is one of the best business ideas under 5 lakhs. You can begin with 5-10 cows or buffaloes or a bunch of 200-300 chickens. Sell milk to your village houses, or to a local dairy co-op. In the case of poultry, sell chicken and eggs to the local shops and restaurants. These businesses are provided with subsidies and loans by the government in schemes such as NABARD.
- Earnings: 25000 to 50000 rupees per month.
- Investment Needed: ₹2,00,000 to ₹5,00,000. (This involves purchasing animals, constructing a shed and purchasing food to last within the initial months.)
Also Read: How to Start a Dairy Business
7. Organic Farming of vegetables or mushrooms.
Citizens are willing to pay a premium price on organic vegetables that do not contain pesticides that are harmful. Having a small piece of land, you can begin organic farming. Mushrooms are fast growing, they do not take many spaces, and their price is high. Indian mushroom market is increasing at a rate of over 7 per annum. Oyster or button mushrooms grow in a small dark room. Sell your fresh produce in the city markets, restaurants or directly to the customers in farmers markets.
- Income Potential: 30000 to 70000 per month, depending on the crop.
- Investment Needed: ₹1,00,000 to ₹3,00,000. (Seeds, organic fertilizers, irrigation system and a shed on mushrooms)
8. Solar Lamp Dealership
Power cuts are still experienced in many villages. One of the solutions is solar energy. Solar power is encouraged by the government through schemes such as PM-KUSUM. Become a sales representative of solar lamps, panels, and water heaters. It is one of the best business ideas under 5 lakhs. Vend with a bigger manufacturer and sell in your village and surrounding. Provide installation services as well. The solar products market in rural India will likely increase by more than 20 percent within a span of five years.
- Income Potential: 30,000 -60,000 per month.
- Investment Needed: ₹2,00,000 to ₹4,00,000. (Mostly to purchase first stock of solar products)
9. AgriEquipment Rental Service.
Farmers do not have the money to purchase costly farming machines such as tractors, tillers, or threshers. Begin a business by purchasing this equipment and renting it. Charge hourly or daily rates. During harvesting and planting seasons demand is high. Begin with one or two important machines and expand as your business expands. This model is referred to as Uber of tractors.
- Income potential: 40000 to 90000 within a month and particularly in peak season.
- Investment Needed: ₹3,00,000 to ₹5,00,000. (Primary expenditure is the purchase of a small tractor or other farm machinery that is necessary.)
10. Mobile Repair / Water purification services
There are very few good repair shops and almost everyone in rural India owns a mobile phone. You can open a shop in case you learn how to repair the most frequent problems such as broken screens or charging problems. It is one of the best business ideas under 5 lakhs. There is also the issue of clean water. Establish a small Reverse Osmosis (RO) water plant and package clean water in 20-litre cans and sell at a low price. The two businesses address the actual issues of the village and are consistent with its flow of customers.
- Income Potential: 20000- 45000 per month.
- Investment Needed: ₹50,000 to ₹2,50,000. (Less is required of a repair shop; more of a water plant to serve machinery.)
C) Showroom Business Ideas Under ₹5 Lakhs
A small retail store or a showroom can be an excellent business in case you select the right product and place.
11. Mobile Accessories Showroom
India is the second largest smart phone market in the world and has over 60 crore users. There are numerous individuals who sell accessories to their phones like covers, screen guards, earphones, and chargers. You may start a small and nice shop in a market that is busy. The profit margin of mobile accessories is high and normally exceeds 50. These are available in wholesale markets in the larger cities such as Delhi or Mumbai. The trick is to follow the current trends and provide numerous products to various phone models.
- Earnings: Between 35,000 and 80,000/month.
- Investment Needed: ₹2,00,000 to ₹4,00,000. This goes to shop security deposit, interior decoration and purchasing of the initial stock.
12. Eco-Products Store
They are seeking products that are environmentally friendly as they increase their consciousness of climate change. It is possible to start a shop that will sell only environmentally friendly products. This may comprise bamboo toothbrushes, jute bags, steel straws, hand-made paper diaries, and organic soaps. India is developing a fast growing market of sustainable products.
These products are available locally with local artisans or small manufacturers. Your shop will appeal to those customers who intend to make a difference with their spending. It is a good business having a good purpose.
- Earnings: 30,000 and 60,000 rupees per month.
- Investment Needed: ₹2,50,000 to ₹4,50,000. This will include rent of the shop, interiors done with recycled materials and the initial stock.
13. Clothing or Ethnic Wear Boutique
Indian fashion industry is projected to have a value of more than 135 billion by 2026. Some people particularly women are always in search of new and unique clothes. You may start with a small boutique specializing in a certain style such as ethnic Kurtis, sarees or the western wear among the youths.
Wholesale markets are available in such cities as Surat, Jaipur, or Delhi. It is one of the best clothing business ideas under 5 lakhs. Your store can become a local favorite due to a good display and a nice customer service. Instagram is also a good way to present your collection and appeal to younger customers.
- Earnings: 40,000-100,000 per month particularly in the season of festivals.
- Investment Needed: ₹3,00,000 to ₹5,00,000. This involves the establishment of the store, purchase of stock and hiring of a salesperson.
14. Organic Food or Spices Outlet
Health is now a huge concern to most families. They are seeking food that is pure and natural. A very lucrative business can be an organic food store. You are selling organic vegetables, fruits, grains, honey, and spices. Indian organic food market is expanding at a tremendous pace of 25 per year.
You may collaborate with local organic farmers to receive a new supply. It is quite important to build trust with your customers regarding the quality and authenticity of the products you are offering. You may also provide home delivery services so that it becomes more convenient to them.
- Earning Potential: 30000 to 70000/month.
- Investment Needed: ₹2,50,000 to ₹5,00,000. This is of the shop, refrigerators, shelves and the initial quantity of organic commodities.
15. Used Two-wheeler or Second-hand Electronics Shop
A large number of individuals in India are unable to afford a brand-new bike or laptop. This forms a large market of second-hand or re-brand goods. You may start a two-wheelers second hand showroom. Old bikes should be purchased, repaired and serviced, and sold with a slight warranty.
The market of used cars and bikes is increasing more rapidly compared to the new vehicles in India. Likewise, you will be able to sell used laptops and phones. These goods are inspected and re-fixed by professionals and sold at a significantly cheaper cost. This is a business that requires good technical knowledge to verify the quality of the goods that you purchase.
- Income Potential: 50,000 to 1,20,000 per month.
- Investment Needed: ₹3,50,000 to ₹5,00,000. The investment is primarily to purchase the first batch of vehicles or electronic products to sell.
D) Franchise and Dealership Business less than 5 Lakhs in India.
Franchising implies taking the name of a famous brand and business model. This lessens risks of the brand since it is already a popular brand.
16. Tea or Coffee Stand (Chai Sutta Bar, MBA Chai Wala-style)
India runs on chai. A small tea or coffee booth in a high-traffic place such as a college campus, office park or market can be highly successful. Such brands as Chai Sutta Bar have demonstrated that you can create a large business on tea. You may get one of the franchises of an established brand or create your own original kiosk. It is one of the best business ideas under 5 lakhs. You may offer various kinds of tea, coffee and some snacks. It has a low investment as you require a small space. It is the trick of giving good taste, fast service and clean environment.
- Income Potential: 30,000 -70, 000 per month.
- Investment Needed: ₹2,00,000 to ₹4,00,000. This covers the franchise fee (where applicable), installation of the kiosk and purchase of equipment and initial supplies.
17. Ice Cream / Fast Food Mini-Franchise
People of all ages love ice cream and fast food. Numerous well-known brands have low-cost franchise systems. You can start a small store of a well-known ice cream company or a fast-food company that sells such products as momos, rolls, or burgers. Indian fast food market is expanding at a rate of more than 18 percent per annum. The plus of a franchise is that the company assists in setting up, training and marketing. You have a prepared business plan. One only requires a good position with high pedestrian traffic.
- Income Potential: 40,000 -90,000 per month.
- Investment Needed: ₹3,00,000 to ₹5,00,000. The charge covers the franchise fee, equipment (such as freezers or ovens) as well as store set up.
Explore List of Most Profitable Ice Cream Franchise in India.
18. Solar Products or EV Charging Dealership
The future is electric. The Indian government is pushing the electric vehicles (EVs) and solar power. You can also be a dealer of EV charging stations or of solar panels. With the increasing number of people purchasing electric scooters and cars, there will be a need to have places where they can charge their cars.
One can establish a parking lot with a small charging point or a highway. In the case of solar products, you will be able to work with a respectable organization and sell solar panels and inverters to households and offices. It is a contemporary company which has enormous growth opportunities.
- Income Potential: 25000-60000 per month, and it will increase with time.
- Investment Needed: ₹1,50,000 to ₹4,00,000. The simplest EV charger may cost starting at 1.5 lakh. Solar dealerships requires capital to purchase stock.
Explore Top Solar Business Ideas list.
18. FMCG / Stationery / Medical Supply Micro-Dealership.
FMCG (Fast Moving Consumer Goods) are the daily needs such as soap, biscuits and tea. Such products are always selling. You will have an opportunity to act as a small dealer of a large FMCG organization in your town or region. It is one of the best business ideas under 5 lakhs. Shop in large quantities with the company and distribute to the local kirana stores.
You can also do the same with stationery where you can give out the stuff to the schools and offices. It can also be very lucrative as a medical supply dealership. These companies provide a stable revenue and they are not very sensitive to changes in the economy.
- Income Potential: 30000 to 50000/per month.
- Investment Needed: ₹2,00,000 to ₹5,00,000. The majority of this money goes to working capital to purchase and retain the inventory.
E) Original and Innovative Business Concepts below 5 Lakhs.
In case you possess any creative talent or an original idea, you can transform it into a business success.
19. Small Town Digital Marketing Agency
Any company, large or small, requires an online presence in the modern world. Most of the shop owners or professionals in the small towns are not aware of how to engage in digital marketing. They are not aware of how to operate a Facebook page or pin their business in Google Maps. You can begin in digital marketing agency in case you know social media and the internet. Assist local companies to create websites, social media management, and online advertising. One can begin at home using a laptop and a good internet connection.
- Income Potential: 40000 -100000 per month, the more clients you have the more income.
- Investment Needed: ₹50,000 to ₹1,50,000. This includes a decent laptop, marketing software and a site.
20. Balloon Art Business and Event Decoration
They are celebrating anything at the moment: birthdays, anniversaries, baby showers. The Indian event industry has valuation of more than 5 lakh crore. You may begin an event decoration company. You don’t need a big office. Pick a niche, like balloon art. Prepare lovely balloon arrangements at parties. Present your work on Instagram and find customers. Creativity is key. Word of mouth brings in a lot of customers due to good work.
- Earning: 30,000 to 80,000 a month.
- Investment Needed: ₹1,00,000 to ₹2,50,000. The cash is used to purchase decoration materials, equipment, and construct a good portfolio.
19. Local Handmade Crafts eCommerce
India is well-known in hand made crafts. Each area has a form of art. Establish an online shop to market these local crafts across the world. Collaborate with local craftsmen, purchase their products, and market them either on your site or on such sites as Etsy or Amazon Karigar. It is one of the best business ideas under 5 lakhs. Sell pottery, paintings, wooden toys or hand woven fabrics. It is essential to have good pictures and tell a story behind each item. This business does not destroy local art and provides you with a good income.
- Income: 25000-60000 per month.
- Investment Needed: ₹80,000 to ₹2,00,000. This includes a web page, starting inventory of craftsmen and advertising on the internet.
20. T-shirts, Mugs, Gifts (Custom Printing)
Individuals are fond of gifts that are personalized. A mug with an image or a T-shirt with a catchy phrase is trendy. Open a business of custom printing. You must have a sublimation printer, a heat press machine, and blank T-shirts, mugs and others. Accept orders via social media or a web site. Another idea that you can utilize is working with companies to print logos on corporate gifts. It is an entertaining, innovative company that makes good profits.
- Earnings: 35000-70000 per month.
- Investment Needed: ₹1,50,000 to ₹3,50,000. The key expense is the printing machines and raw materials.
21. Pet Grooming or Pet Food Organic Brand
Indians have a huge number of people who own pets and treat them as family. The market size of the pet care is increasing at a rate of more than 20 percent annually. Start a pet grooming service. Provide bathing, haircutting and nail trimming services to dogs and cats. Where space is available, do it at home or provide a mobile service which is taken to the homes of the customers. The other concept is organic pet food brand. People who own pets desire healthy and natural food in their pets. Begin with easy recipes and sell on the internet.
- Earning: 30 -75,000 INR/ month.
- Investment Needed: ₹2,00,000 to ₹4,00,000. Grooming requires money to train, equipment, and van to serve in the streets. A pet food brand requires capital in terms of raw materials, packaging and food license.
Government & Financial Support for Businesses Under ₹5 Lakhs
There are a number of plans of the Indian government to assist individuals to set up small business. These will help you acquire the money you require.
- MUDRA Yojana: This is one of the most used schemes. Through the Pradhan Mantri MUDRA Yojana (PMMY) you are able to acquire loans without providing any form of security or guarantee. There are three categories:
- Shishu: Loans up to ₹50,000. Ideal in beginning very small.
- Kishor: Loans from ₹50,001 to ₹5,00,000. Most businesses on our list would be best fitted by this.
- Tarun: Loans from ₹5,00,001 to ₹10,00,000.
- Stand-Up India Scheme: This scheme assists women, as well as individuals belonging to Scheduled Castes (SC) or Scheduled Tribes (ST) to launch a business. It offers bank loans to the value of 10 lakh to 1 crore. This scheme reveals the attention of the government to new entrepreneurs of all types even in a smaller business.
- Prime Ministers Employment Generation Programme (PMEGP): This initiative is used to generate employment through the establishment of new businesses (small). You are in a position to receive a subsidy (a discount) on the cost of your project. In urban regions, the subsidy is 15-25 percent and in rural regions, it is 25-35 percent.
Conclusion
When starting a business, it is a process. It involves work, patience and learning. However, you do not require a mountain of money to start as we have seen. India is an opportunity, to anyone with a good idea and the strength to initiate the first step. A business ideas under 5 lakhs investment is sufficient to start a small business that is profitable and will be able to sustain you and your family.
You can create something with your hands, serve your local community, or solve a problem with the help of technology, the correct idea will find you. Do the right thing, think about it and begin your entrepreneurial life.
FAQs
Will I require a GST number of a small business?
At an annual sales of 340 lakh (goods) or 20 lakh (services), you will only need to register GST. Most small businesses are just starting out and do not need it at the beginning.
Which is the easiest business to venture in with minimal investment?
Service-oriented businesses such as a digital marketing company or a home-based service of tiffins are not always difficult to establish.
Is it possible to obtain a government loan without any security?
Yes, banks under the MUDRA Yojana can provide a loan of up to 10 lakh without any security and collateral.
What is the significance of online marketing to these businesses?
It is very important. It could be suitable to use social media such as Instagram and Facebook and place your business on Google Maps which may allow you to attract thousands of customers at no or minimal cost.