Investment
₹2 - 5 Lakhs
Profit Margin
30-45%
Location Type
Industrial Area
Business Description
Introduction to Cloth Bag Manufacturing Business
The Cloth Bag Manufacturing Business is one of the fastest-growing eco-friendly manufacturing businesses in India. With increasing bans on plastic bags and rising environmental awareness, the demand for cotton, jute, canvas, and non-woven cloth bags is skyrocketing across retail, grocery, fashion, corporate gifting, and packaging industries.
This business offers high profit margins, low investment, easy setup, and massive market potential, making it an ideal opportunity for startups, women entrepreneurs, MSMEs, and small manufacturers.
Business Overview – Cloth Bag Manufacturing
| Factor | Details |
|---|---|
| Business Category | Manufacturing |
| Business Type | Manufacturing Unit |
| Initial Investment | ₹2 – ₹5 Lakhs |
| Profit Margin | 30% – 45% |
| Skills Required | Tailoring & Basic Manufacturing Skills |
| Market Demand | High |
| Ideal Location | Industrial Area / Commercial Zone |
| Licenses Required | GST Registration |
Why Start Cloth Bag Manufacturing Business?
1. Rising Demand for Eco-Friendly Products
Government bans on plastic bags and increasing environmental awareness have created huge demand for cloth bags.
2. Low Investment – High Returns
You can start this business with ₹2–5 Lakhs investment and generate 30–45% profit margins.
3. Wide Customer Base
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Retail stores
-
Supermarkets
-
Corporate companies
-
Educational institutes
-
Event organizers
-
NGOs & government tenders
4. Government Support
MSME registration provides:
-
Subsidies
-
Low-interest loans
-
Tax benefits
-
Skill training programs
Market Demand & Growth Potential in India
The Indian eco-friendly packaging market is growing at 15%+ CAGR. Cloth bags are becoming a mandatory alternative to plastic in:
-
Retail & shopping malls
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Grocery & vegetable markets
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Clothing stores
-
Medical & pharma shops
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Corporate gifting
This ensures continuous demand throughout the year.
Types of Cloth Bags You Can Manufacture
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Cotton Shopping Bags
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Canvas Carry Bags
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Jute Bags
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Non-Woven Fabric Bags
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Drawstring Bags
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Promotional Printed Bags
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Tote Bags
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School & College Bags
Raw Materials Required
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Cotton fabric / Canvas fabric
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Jute fabric
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Non-woven fabric
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Stitching thread
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Labels & tags
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Printing ink
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Packing material
Machinery & Equipment Required
| Machine | Approx Cost |
|---|---|
| Single Needle Sewing Machine | ₹15,000 – ₹25,000 |
| Overlock Machine | ₹25,000 – ₹45,000 |
| Cutting Table | ₹10,000 – ₹20,000 |
| Fabric Cutting Tools | ₹5,000 – ₹10,000 |
| Screen Printing Machine (Optional) | ₹35,000 – ₹80,000 |
| Heat Press Machine (Optional) | ₹30,000 – ₹60,000 |
Total Machinery Investment: ₹1.5 – ₹3 Lakhs
Manufacturing Process of Cloth Bags
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Fabric Cutting
-
Pattern Designing
-
Stitching & Assembly
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Quality Checking
-
Printing & Branding
-
Final Packaging
Investment Breakdown – Cloth Bag Manufacturing Business
| Expense Head | Approx Cost |
|---|---|
| Machinery & Equipment | ₹1.5 – ₹3 Lakhs |
| Raw Material | ₹50,000 – ₹1 Lakh |
| Rent & Setup | ₹20,000 – ₹50,000 |
| Labor & Utilities | ₹20,000 – ₹40,000 |
| Marketing & Branding | ₹15,000 – ₹30,000 |
Total Investment: ₹2 – ₹5 Lakhs
Profit Margin & Monthly Earnings
Production Capacity Example:
-
300–600 bags/day
-
7,000–15,000 bags/month
Selling Price:
₹25 – ₹120 per bag (depending on fabric & printing)
Monthly Revenue:
₹2.5 Lakhs – ₹8 Lakhs
Net Profit:
₹60,000 – ₹2.5 Lakhs per month
Required Licenses & Legal Registrations
-
GST Registration (Mandatory)
-
Udyam MSME Registration (Highly Recommended)
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Trade License from Local Authority
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Current Account in Bank
Best Location for Cloth Bag Manufacturing Unit
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Industrial Areas
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MSME Industrial Clusters
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Semi-Urban Industrial Zones
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Home-based unit (for small scale)
Marketing & Sales Strategy (High Conversion)
Offline Marketing:
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Direct retail store visits
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Distributors & wholesalers
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Corporate gifting companies
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Exhibitions & trade fairs
Online Marketing:
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Website with SEO
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Google My Business listing
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B2B portals (IndiaMART, TradeIndia, Justdial)
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Social media marketing
Government Subsidy & Loan Support
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Mudra Loan Scheme
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PMEGP Subsidy (15%–35%)
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Stand-Up India Scheme
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MSME Business Loan
Advantages of Cloth Bag Manufacturing Business
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Eco-friendly business
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High demand
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Low competition in local markets
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Strong profit margins
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Scalable business model
Challenges & Solutions
| Challenge | Solution |
|---|---|
| Price competition | Branding & bulk orders |
| Raw material cost | Bulk procurement |
| Skilled labor | Local tailoring training |
| Order fluctuation | B2B long-term contracts |
Future Scope & Expansion Opportunities
-
Export market
-
Custom printed corporate bags
-
Online brand store
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Franchise distribution network
FAQs – Cloth Bag Manufacturing Business
Q1. Is cloth bag manufacturing profitable?
Yes, it offers 30%–45% profit margin.
Q2. Can I start this business from home?
Yes, small-scale production can start from home.
Q3. Is government subsidy available?
Yes, PMEGP offers 15%–35% subsidy.
Final Conclusion
The Cloth Bag Manufacturing Business in India is a high-growth, sustainable, and profitable manufacturing startup idea. With minimal investment, simple machinery, and growing environmental awareness, this business provides excellent income and long-term scalability.
If you are planning a low-risk manufacturing business with high profit, cloth bag manufacturing is one of the best options in 2026.
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