What is a agarbatti incense sticks project report?
An agarbatti incense sticks project report is a detailed project report (DPR) for a unit that rolls charcoal, jigat and wood powder paste onto bamboo sticks. The unit then perfumes, dries and packs them. The report sets out the process, machines, raw materials, project cost, means of finance, five-year profit, DSCR and break-even that a lender reviews.
First-time entrepreneurs, women's self-help groups and existing pooja product traders use it to size the unit and apply for PMEGP, Mudra or a bank term loan.
Also known as: agarbatti business plan, incense stick making project report, DPR for agarbatti manufacturing, agarbatti project profile.
What a bank checks in an agarbatti incense sticks project report
An agarbatti unit earns a thin margin on a large volume of sticks, so a lender looks hard at cost shares and repayment cover. These four values come from our sample report.
A report that shows a much lower share is usually pricing perfumed sticks too high or perfume too low. Banks compare it with supplier quotes.
Perfume compounds cost more than charcoal, jigat and bamboo put together in the sample. A small change in perfume dosage moves profit more than any machine choice.
DSCR, the debt service coverage ratio, is cash available for loan payments divided by the payments due. Lenders want it comfortably above 1 in every year.
Distributors and brands rarely pay on delivery. Together with 30 days of raw material and 20 days of finished stock, this sets the cash credit limit.
Values are the assumptions in our illustrative sample. Your report uses figures for your capacity, suppliers and buyers.
Agarbatti manufacturing plant cost in India
Cost depends on how many automatic rolling machines you run, whether you perfume and pack in-house, and whether you own the shed. The middle tier is the unit in our sample report; the other two are indicative ranges.
Starter unit
₹8–20 lakh
About 100–200 kg per day, 1–2 automatic machines
- Machinery₹4–10 lakh
- Shed fit-out (rented)₹1–4 lakh
- Working capital margin₹2–5 lakh
Fits Mudra or PMEGP, subject to limits
Small factory
₹48.53 lakh
580 kg per day, 1,74,000 kg per year
- Plant and machinery₹21.97 lakh
- Land and building₹17.10 lakh
- Working capital margin₹4.65 lakh
Term loan ₹36.40 lakh (75%), promoter ₹12.13 lakh
Branded plant
₹1.2–3 crore
About 1.5–3 MT per day with own perfuming and packing lines
- Machinery₹50 lakh–1.2 crore
- Land and building₹40 lakh–1 crore
- Working capital margin₹20–60 lakh
MSME term loan, often with CGTMSE cover
Starter and branded-plant ranges are indicative. Costs vary with location, machine make and how much perfume stock you hold.
Agarbatti incense sticks manufacturing process
Most units make raw (unscented) sticks first and perfume them later. Some buy raw sticks and only dip and pack; a full unit does both to control quality and cost.
- Premix preparation
Charcoal powder, jigat powder and wood powder are sieved and kneaded with water into a firm dough; jigat is the binder that holds the coat on the stick.
- Rolling
Automatic agarbatti machines feed round bamboo sticks and press an even layer of dough onto each one, far faster than hand rolling.
- Drying
Raw sticks are dried on racks in shade or in a dryer; sticks packed damp grow fungus and burn unevenly.
- Perfuming
Dry sticks are dipped in perfume diluted with a carrier such as DEP or white oil; a government model profile uses about one part perfume to three parts diluent.
- Curing
Perfumed sticks are dried again so the solvent flashes off and the fragrance settles into the coating.
- Counting and packing
Sticks are counted or weighed into pouches, wrapped and boxed, with fragrance name and batch on each pack.
Raw materials for agarbatti making
Raw agarbatti imports were moved to the restricted list in August 2019, and the import duty on bamboo sticks was raised from 10% to 25% in June 2020. Check the current import policy if you plan to buy imported sticks.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Perfume and fragrance compounds | 45% | 34.97 |
| Charcoal, jigat and wood powder | 25% | 19.43 |
| Bamboo sticks | 15% | 11.66 |
| DEP and solvents | 10% | 7.77 |
| Colours | 5% | 3.88 |
| Total | 100% | 77.71 |
Packing material is costed separately in the sample, at 11.4% of sales.
Agarbatti making machines and their cost
Automatic rolling machines take almost half of the machinery budget in our sample. The rest goes on preparing the premix and on perfuming and packing.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Automatic agarbatti making machines | Roll the dough onto bamboo sticks | 10.54 |
| Premix mixer machine | Kneads powders and water into dough | 2.20 |
| Powder sieving machine | Removes coarse particles from charcoal and jigat | 1.32 |
| Drying racks and dryer | Dry raw sticks evenly | 2.20 |
| Perfume dipping and drying unit | Dips sticks in perfume and cures them | 2.20 |
| Pouch and box packing machine | Packs counted sticks into pouches and boxes | 3.51 |
| Total plant and machinery | 21.97 | |
Costs are the sample report's estimates for a 580 kg per day unit. Get current quotations before you finalise.
Market for agarbatti and who buys it
Agarbatti is bought every week for household worship and in bulk by temples, and sales rise sharply from Navratri to Diwali. As of December 2025, the Government of India put the industry at about ₹8,000 crore a year, with exports of about ₹1,200 crore to more than 150 countries.
Many small units do not sell under their own name at first. They supply perfumed or raw sticks to brands and wholesalers, then build a regional brand once quality is steady.
- Agarbatti brands buying perfumed sticks in bulk
- Pooja item distributors and wholesale markets
- Kirana and general stores
- Temples and religious trusts
- Supermarkets and online sellers
- Exporters of incense products
Where a new unit wins: repeat buyers judge a stick on fragrance throw, even burning and ash that does not drop. Consistent batches matter more than a long list of fragrances.
Licences and the BIS standard for agarbatti
Registration for an agarbatti unit is simple. A new BIS standard and your state's pollution rules decide how you set up and which materials you can use.
| Business registration | Udyam (MSME) registration and GST registration |
|---|---|
| Pollution board | Categories are set by each State Pollution Control Board; Tamil Nadu, for example, lists agarbathi manufacturing in the White category. Check your state's list before applying |
| Product standard | IS 19412:2025, Incense Sticks (Agarbatti), Specification, released by BIS in December 2025 for machine-made, hand-made and masala agarbatti |
| Banned substances | The standard lists alethrin, permethrin, cypermethrin, deltamethrin and fipronil, and the fragrance intermediates benzyl cyanide, ethyl acrylate and diphenylamine, as not to be used |
| Factory and labour | Factory licence or labour registration where your state's worker threshold applies |
PMEGP, Mudra and bank loans for an agarbatti unit
Our sample unit costs ₹48.53 lakh, just under the PMEGP ceiling for manufacturing, so the scheme choice often decides the project size.
PMEGP
Manufacturing projects up to ₹50 lakhMargin-money subsidy of 15% (urban) or 25% (rural) for general applicants, and 25% or 35% for special categories including women and SC/ST. Own contribution is 10% or 5%.
Mudra
Loans up to ₹20 lakhSuits a starter unit with one or two machines. The ₹10–20 lakh Tarun Plus slab is open to borrowers who have repaid an earlier Tarun loan.
MSME term loan with CGTMSE
Larger or branded plantsCollateral-free guarantee cover for eligible micro and small enterprises, used when the project is above scheme limits.
Scheme limits change. Confirm current terms with the bank or the scheme portal before applying.
Mistakes that weaken an agarbatti project report
- Pricing perfumed sticks at retail rates
Brands and distributors buy at ex-factory prices far below the shelf price, so sales and DSCR come out too high.
- Leaving out perfume losses and dosage
Dipping trays, drips and evaporation use more perfume than the stick weight suggests; fragrance is the largest raw material cost.
- Assuming full machine output from day one
Operators take time to learn, and dough quality affects breakage. Our sample starts at 60% of capacity and reaches 80% in Year 5.
- Ignoring the festival season in working capital
Stock builds before Navratri and Diwali, and buyers pay later. A cash credit limit sized on average months runs short.
- Using cheap insect-repellent fragrances
IS 19412:2025 lists insecticides that should not be in agarbatti. Formulas built on them can lose brand and export buyers.
How NPCS helps you set up an agarbatti unit
- Product and sales routeDecide between raw sticks, perfumed bulk supply or your own brand, and size the unit to match.
- Machines and suppliersCompare automatic rolling, perfuming and packing machines and get quotations.
- Bank-ready project reportProjections, DSCR and festival-season working capital in the format your lender or PMEGP office wants.
- Approvals and complianceYour state's pollution category, Udyam, GST and a raw material check against IS 19412:2025.
NPCS has prepared project reports and feasibility studies for pooja products, wax and camphor units since 1994, for entrepreneurs, banks and companies in India and abroad.
What's inside the agarbatti incense sticks sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
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Agarbatti Incense Sticks project report: frequently asked questions
How much does it cost to start an agarbatti manufacturing unit?
A unit with one or two automatic machines in a rented shed needs roughly ₹8–20 lakh. Our sample report models a 580 kg per day unit with its own land and building at ₹48.53 lakh. Larger plants with their own perfuming and packing lines run to ₹1.2–3 crore. These are indicative figures; your report costs your own capacity and location.
Which raw materials are used to make agarbatti?
Round bamboo sticks, charcoal powder, jigat (joss) powder as the binder, wood powder, perfume compounds and a diluent such as diethyl phthalate (DEP). In our sample report, perfume and fragrance compounds are the largest item at 45% of raw material cost. Charcoal, jigat and wood powder follow at 25%, and bamboo sticks at 15%.
Is agarbatti manufacturing profitable?
It can be, if fragrance cost and selling price are controlled. In our illustrative sample, a 580 kg per day unit earns ₹10.34 lakh net profit on ₹157.12 lakh sales in Year 3. That is a return on investment of 21.2% a year, with break-even at about 50% of capacity. Margins are thin, so buying perfume well and selling through steady buyers matter most.
Can I get a PMEGP loan for an agarbatti unit?
Yes, agarbatti making is a manufacturing activity, and PMEGP covers manufacturing projects up to ₹50 lakh. The margin-money subsidy is 15% to 35% of project cost depending on your category and whether the unit is urban or rural. You contribute 5% to 10%. The bank still checks your project report, DSCR and buyer arrangements before sanction.
Is a BIS licence compulsory for agarbatti?
BIS released IS 19412:2025, the Indian Standard for incense sticks, in December 2025. Products that conform can carry the BIS Standard Mark. The release does not make the mark compulsory. The standard does list insecticides and fragrance chemicals that should not be used, so brands and buyers are likely to ask for compliance.
Agarbatti ka business kaise shuru kare?
Start by choosing what you will sell: raw sticks to brands, perfumed sticks to distributors, or your own packed brand. Then fix capacity, buy automatic rolling machines, register on Udyam and GST, check pollution board rules in your state, and prepare a project report for the bank. Line up bamboo stick and perfume suppliers before you place machine orders.
Is the sample report free and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report; its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, location and loan scheme.
Sources and references
- Union Minister Shri Pralhad Joshi releases new BIS standard for incense sticks (IS 19412:2025)Press Information Bureau, Government of India, checked Oct 2026
- Enhanced import duty on bamboo sticks to give a big boost to agarbatti and bamboo industriesPress Information Bureau, Government of India, checked Oct 2026
- PMEGP (Prime Minister's Employment Generation Programme)Himachal Pradesh Khadi and Village Industries Board, checked Oct 2026
- Pradhan Mantri Mudra Yojana: loan limit raised to ₹20 lakh (Tarun Plus)Press Information Bureau, Government of India, checked Oct 2026
- List of industries in the White CategoryTamil Nadu Pollution Control Board, checked Oct 2026
- Project profile: agarbatti (incense sticks)Office of the Development Commissioner (MSME), Government of India, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.