How to Start a Furniture Manufacturing Business in India

You can start a furniture manufacturing business in India with a carpentry workshop and a dozen workers, or with a panel-furniture line built around edge-banding and CNC machines. Choose between them first, because the product line then decides your machines, your buyers and your paperwork.

Since February 2026 the paperwork includes a BIS licence for chairs, tables, desks, storage units and beds, with exemptions for export-only makers and small Udyam-registered units. Timber supply, trained carpenters and a regular buyer (dealers, builders, hotels or online sellers) matter more than any single machine.

Solid wood, engineered wood or bamboo: which route fits you?

Your route sets the machine list and the buyer, so settle it before you price anything.

Mordor Intelligence puts engineered wood at 46.64% of India’s wood furniture market in 2025, while bamboo and rattan grow fastest at 16.64% a year. Choose engineered wood for volume and solid wood when craft and made-to-order work is your edge.

What does a furniture manufacturing business cost to set up?

Two Uttar Pradesh government project profiles price a hand-tool workshop at ₹12.74 lakh (the Basti ODOP profile, 10 sets a day) and ₹13.66 lakh (the UP MSME profile, 20 sets a day). The table follows the second.

Neither profile prices land or a building (Basti lists 2,000 sq ft as own or rented). In the Basti profile net profit is 2.5% of sales in Year I and 7.6% in Year V, so the money is made on volume and careful timber buying, not on price. No government profile prices a panel-furniture line, so take edge bander and CNC quotes from two suppliers.

For finance, PMEGP funds manufacturing projects up to ₹50 lakh with a margin money subsidy of 15% to 35% depending on category and area. Banks lend 90% of project cost (95% for special categories), land is excluded from project cost, and applicants for manufacturing projects above ₹10 lakh need at least Class VIII education, as per the revised PMEGP guidelines. Other options sit on our MSME support schemes page.

Who buys, and who will you compete with?

Mordor Intelligence sizes India’s wood furniture market at USD 19.54 billion in 2026, rising to USD 25.09 billion by 2031. Home furniture takes 57.36%, hospitality is the fastest-growing buyer group at 12.35% a year, and online sales grow at 18.12%. Mordor estimates 60% to 70% of the industry sits outside the GST net, and flags timber price swings as the main cost risk for small workshops.

A small unit will not beat these brands on price. Hotels, builders, schools and regional dealers who need custom sizes are the buyers it can reach.

Where should you set up: Jodhpur, Saharanpur or your own city?

Pick the site by route. Solid wood and carved work suit a carpenter cluster: the Export Promotion Council for Handicrafts lists Saharanpur, Jodhpur, Jaipur, Bengaluru and Mysuru among India’s wooden furniture and craft centres, and Saharanpur Wood Craft holds a Geographical Indication registration from 2014. See our Rajasthan industries and Uttar Pradesh industries pages.

Engineered-wood units sit near board suppliers and large buyers. Mordor points to Hosur, Sriperumbudur and Tumakuru as clusters that help organised makers (see Tamil Nadu industries), and says South India holds 29.24% of sales while East India is growing fastest at 11.46% a year.

How is wood furniture made? The wood furniture making process

1. Season the timber. Freshly sawn wood holds moisture and warps after assembly, so air-dry or kiln-dry it first. The UP profile includes a seasoning plant for this.
2. Cut to rough size on the band saw, leaving allowance for planing.
3. Plane and thickness each piece so every part has flat, square faces.
4. Cut joints, drill holes and shape curved parts on the lathe or by hand carving.
5. Dry-fit, then glue, clamp and assemble.
6. Sand in stages and fill flaws.
7. Apply stain, sealer and polish or lacquer in a dust-free area, letting each coat cure.
8. Inspect, fit hardware and pack with edge protection.

On the panel route, steps 1 to 4 become board cutting, edge-banding and CNC drilling, and the finish is laminate or paint. Offcuts and sawdust can go to buyers such as a wood charcoal business.

Which machines does a furniture unit need?

The same UP MSME profile prices the core machines, before GST and installation.

Do you need a BIS licence to make furniture in 2026?

Yes, for six product groups. The Furniture (Quality Control) Order, 2025 covers work chairs, general purpose chairs and stools, tables and desks, storage units, beds and bunk beds, and these must carry the BIS Standard Mark under a licence. Enforcement began in February 2026. As of October 2026, goods made only for export are outside the Order, and so are goods from Udyam-registered units with plant and machinery up to ₹1 crore and previous-year turnover up to ₹5 crore, certified by a chartered accountant, as the February 2026 amendment states.

• Udyam registration: the Ministry of MSME raised the micro enterprise limits to ₹2.5 crore investment and ₹10 crore turnover from 1 April 2025. Registration is also what lets you claim the exemption above.
• State forest department: units that use only sawn timber, plywood or MDF from legal sources are generally exempt from the wood-based industry licence but may still have to register. Rules differ by state, so ask your Divisional Forest Office.
• GST registration once your turnover crosses the threshold.

What should you do before buying machines?

1. Match your product line to the six BIS groups and work out whether the ₹1 crore and ₹5 crore exemption applies to you.
2. Visit a cluster or timber depot, and get two quotes for each machine and your first timber lot.
3. Register on Udyam, then write a project report that a bank can read; our detailed project report format guide shows the layout.
4. If your carpenters are self-employed, check the PM Vishwakarma Yojana. PIB lists carpenters among its 18 trades, with toolkit support up to ₹15,000 and collateral-free loans up to ₹3 lakh.
5. If furniture is not the right fit, compare other wood-based manufacturing ideas.

Frequently asked questions

Which city in India is famous for wooden furniture?

Saharanpur in Uttar Pradesh and Jodhpur in Rajasthan are the two names that come up most. Saharanpur Wood Craft holds a Geographical Indication registration from 2014, and the Export Promotion Council for Handicrafts lists both towns among India’s wooden furniture and craft centres.

Is furniture manufacturing a profitable business?

It is profitable but thin at small scale. The Basti and UP MSME project profiles show net profit of about 2.5% to 7.6% of sales. Profit depends on running near capacity, buying timber well and controlling dealer credit, since late payments eat into working capital.

Which wood is costly in India for furniture?

Teak and rosewood (sheesham) usually sit at the premium end, with mango wood and engineered boards cheaper. Prices change with grade, size and state, so take current rates from a local timber depot and fix the species and grade in writing before you quote a customer.

Who is the biggest furniture manufacturer in India?

No single maker dominates. Mordor Intelligence names Godrej Interio, Durian Industries, Nilkamal, Urban Ladder and IKEA India as industry leaders, and calls the market moderately fragmented, with unorganised makers holding most of the value, so a new unit competes with many local workshops, not one giant.