What is a hard gelatin capsules project report?
A hard gelatin capsules project report is a detailed project report (DPR) for a plant that makes empty two-piece capsule shells from pharmaceutical gelatin on an automatic dipping line. It covers the process, machinery, raw materials, drug licence and GMP needs, project cost, means of finance, five-year projections, DSCR and break-even that a lender reviews.
Promoters use it to size the plant and raise a term loan; pharma groups use it to judge whether making their own shells is better than buying them.
Also known as: empty hard gelatin capsules project report, empty capsule manufacturing project report, hard capsule shell plant DPR, empty gelatin capsule business plan.
Hard gelatin capsules manufacturing plant cost and economics
Our sample report models one automatic line making 26,00,000 capsules a day, or 85,80,00,000 capsules a year over 330 working days. It starts at 60% of capacity, reaches 80% in Year 5 and sells at ₹0.18 per capsule before GST.
Plant and machinery is about half of the project cost, because the capsule line and its air handling plant are expensive. Margins are moderate: each capsule earns very little, so the plant makes money only when it runs full and rejects stay low.
| Land and site development | 75.30 |
|---|---|
| Building and civil works | 146.08 |
| Plant and machinery | 347.64 |
| Other fixed assets | 60.28 |
| Contingencies | 24.69 |
| Preliminary and pre-operative | 16.35 |
| Working capital margin | 36.42 |
| Total | 706.76 |
| Promoter's contribution (25%) | 176.69 |
|---|---|
| Term loan from bank (75%) | 530.07 |
| Cash credit limit (separate) | 109.27 |
| Total project cost | 706.76 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments; the lowest DSCR in any year is 1.25. All figures are illustrative.
Hard gelatin capsules manufacturing process
Empty capsules are made by dip moulding. Caps and bodies form on separate pin bars, because the cap is slightly wider so it can close over the body.
- Gelatin solution
Gelatin is soaked and melted in hot purified water, then held under vacuum to pull out air bubbles that would leave pinholes in the shell.
- Colouring
Colours, titanium dioxide for opaque shells and a wetting agent are mixed in, one batch for each cap and body shade the buyer orders.
- Dipping
Lubricated stainless steel pins dip into the warm solution and are withdrawn and rotated so the film spreads to an even wall thickness.
- Drying
Pin bars move slowly through kilns fed with filtered air at set temperature and humidity until the film holds about 13–16% moisture.
- Stripping and trimming
Jaws pull the dry shells off the pins, and knives trim caps and bodies to an exact length so they lock cleanly.
- Joining
Each cap is pushed onto its body to a pre-lock position, so the filling machine can separate it again.
- Sorting and inspection
Machines and inspectors remove dented, split, short or off-colour shells; samples are checked for weight, length, moisture and disintegration.
- Printing and packing
Shells are printed with the buyer's mark if ordered, then sealed in polythene bags inside cartons to hold their moisture in transit.
Gelatin or HPMC: which capsule line should you build?
The shell material is the first technology decision, because it fixes the dipping set-up, the drying settings and the buyers you can serve. Our sample report models a gelatin line.
| Point | Hard gelatin capsules | HPMC capsules |
|---|---|---|
| Shell material | Gelatin from animal bone and hide | Hydroxypropyl methylcellulose, a plant-derived polymer |
| How the film sets | Gelatin gels as it cools on the pin | Heated pins, or a gelling agent such as gellan gum in the solution |
| Moisture in the shell | About 13–16%; brittle if it dries out | Lower, so it suits moisture-sensitive fills |
| Main buyers | Most pharma formulations and supplements | Vegetarian, halal and nutraceutical brands |
| Raw material cost | Lower per capsule | Higher per capsule |
Comparison is general guidance. Confirm line settings and shell specifications with the machine supplier.
Raw materials for hard gelatin capsules
Raw materials take 51.7% of sales in our sample report, and gelatin alone is 88% of that bill. Capsule makers buy a blend of bone and hide gelatin of high Bloom strength (a measure of gel firmness), because it gives a strong, clear film.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Pharmaceutical grade gelatin (bone and hide) | 88% | 499.59 |
| Colours and titanium dioxide opacifier | 7% | 39.74 |
| Sodium lauryl sulphate and preservatives | 3% | 17.03 |
| Pin release lubricant | 2% | 11.35 |
| Total | 100% | 567.71 |
Buyers often ask for the gelatin source and its certificates, so keep supplier documents ready for audits.
Machinery for an empty capsule plant
The automatic capsule making machine is the largest single item at 45% of machinery cost. The air handling plant that feeds the drying kilns comes next.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Automatic hard capsule making machine | Dips, dries, strips, trims and joins shells | 156.44 |
| Air handling and dehumidification units | Supply dry, filtered air at set humidity | 52.15 |
| Gelatin melting tanks with vacuum deaeration | Prepare a bubble-free dipping solution | 34.76 |
| Capsule sorting and visual inspection machine | Removes defective shells | 27.81 |
| Purified water generation system | Makes water for the gelatin solution | 20.86 |
| Capsule printing machine | Prints buyer marks on shells | 20.86 |
| Quality control laboratory instruments | Test weight, moisture and disintegration | 20.86 |
| Counting, weighing and packing equipment | Packs shells in sealed bags and cartons | 13.90 |
| Total plant and machinery | 347.64 | |
Costs are the sample report's estimates for one line. Pin bars come in sets for each capsule size, so get quotations for the sizes you plan to sell.
Humidity, water and power needs of a capsule plant
Gelatin shells pick up and lose water with the air around them. Climate control is a production need here, not a comfort item.
| Drying air | Filtered air at controlled temperature and humidity through the kilns, run all day and night |
|---|---|
| Rooms and stores | Shells are usually kept at about 15–25 °C and 35–65% relative humidity; drier air makes them brittle, damper air makes them stick |
| Water | Purified water for the gelatin solution, plus water for cleaning and the cooling system |
| Power and fuel | ₹77.55 lakh in Year 3 in our sample report, about 7.1% of sales, mostly for the kilns and air handling |
| Manpower | 31 people in the sample, including 11 skilled operators; wages of ₹70.86 lakh in Year 1 |
Drug licence and GMP rules for a hard gelatin capsules plant
Empty gelatin capsules are regulated as drugs in India. That makes this plant closer to a pharma unit than a chemicals unit when it comes to approvals.
| Drug manufacturing licence | From the State Licensing Authority. Section 3(b) of the Drugs and Cosmetics Act, 1940 includes empty gelatin capsules in the definition of a drug |
|---|---|
| Good manufacturing practice | Revised Schedule M under the Drugs Rules, notified as G.S.R. 922(E) on 28 December 2023. The extended date for units with turnover up to ₹250 crore was 31 December 2025, so a new plant must comply from day one |
| Shell quality | Tested against pharmacopoeia requirements such as weight, moisture and disintegration, and against each buyer's specification |
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board |
| Other registrations | Udyam and GST registration, factory licence and fire NOC as your state requires |
Rules checked in October 2026. Confirm current requirements with your State Licensing Authority before applying.
Who buys hard gelatin capsules?
Every capsule filled in a pharma or supplement plant needs an empty shell, so demand follows the output of capsule formulations. Buyers approve a shell supplier only after a site audit and trial batches on their own filling machines.
A new plant wins orders on steady size and weight, exact colour matching, moisture control and on-time supply. Once approved, a supplier tends to keep the business, because the buyer would have to repeat trials to switch.
- Pharmaceutical formulation companies
- Contract and loan-licence manufacturers
- Nutraceutical and supplement brands
- Ayurvedic and herbal medicine makers
- Veterinary medicine makers
Check export plans against US duties: in December 2025 the US Commerce Department set a 7.06% countervailing duty rate for hard empty capsules from India. In January 2026 the US International Trade Commission confirmed injury, which leads to duty orders. Model domestic sales and other export markets first.
Mistakes that weaken a hard gelatin capsules project report
- One price for every capsule size
A size 00 shell uses far more gelatin than a size 3. Sales and raw material cost should follow the size mix you expect to sell.
- No allowance for rejects and trim
Trimmed edges and rejected shells are gelatin you paid for. Saleable output must be lower than the line's rated output.
- An undersized air handling plant
If the kilns cannot hold humidity in the monsoon, shells go soft or crack and whole batches fail.
- Ignoring the time to get approved
The drug licence inspection and buyer trials delay first sales. Working capital and the loan moratorium must cover that gap.
- Counting on US export orders
US duties on Indian hard capsules make that market harder. Revenue should rest on buyers you can reach without them.
How NPCS helps you set up a hard gelatin capsules plant
- Capacity and size mixChoose the line output and capsule sizes that match your buyers and budget.
- Machinery and climate controlCompare capsule lines and size the air handling plant for your location.
- Bank-ready project reportProjections, DSCR and working capital that allow for licensing and buyer approval time.
- Licence and GMP planningLayout and approvals list for a drug licence under revised Schedule M.
NPCS's client list shows 269 specialty chemicals assignments, one of them for hard gelatin capsules. The NPCS project team, led by founder Ajay Kumar Gupta, has prepared project reports since 1994.
What's inside the hard gelatin capsules 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
19 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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Hard Gelatin Capsules project report: frequently asked questions
How much does it cost to set up a hard gelatin capsules plant in India?
Our sample report models a plant making 26,00,000 capsules a day at a total project cost of ₹706.76 lakh, of which plant and machinery is ₹347.64 lakh. Your cost moves mainly with the number of capsule lines, the size of the air handling system and whether you buy or lease land. A project report works this out for your capacity and site.
What raw materials are used to make hard gelatin capsules?
The main raw material is pharmaceutical grade gelatin, a blend of bone and hide gelatin chosen for film strength and clarity. In our sample report it makes up 88% of raw material cost. The rest is colours, titanium dioxide for opaque shells, a wetting agent such as sodium lauryl sulphate, preservatives and a release lubricant for the pins.
Do I need a drug licence to manufacture empty gelatin capsules?
Yes. The Drugs and Cosmetics Act, 1940 defines drugs to include substances used as components of a drug, and names empty gelatin capsules in Section 3(b). You need a manufacturing licence from your State Licensing Authority, and the plant must meet the revised Schedule M good manufacturing practices before inspectors approve it.
How are hard gelatin capsules made?
Stainless steel pins are dipped into a warm, deaerated gelatin solution, so a thin film sets on each pin. The coated pins pass through drying kilns with controlled air, then the shells are stripped off, trimmed to length and the cap is pre-locked onto the body. Capsules are then sorted, inspected, printed if needed and packed in sealed bags.
Is hard gelatin capsule manufacturing profitable?
In our illustrative sample, the plant earns a 14.2% return on investment in Year 3 and breaks even at 44.7% of capacity. It pays back in about 4.5 years, with an average DSCR of 1.42. Margins are moderate, so profit depends on gelatin buying, the selling price per thousand capsules, reject rates and how quickly buyers approve you.
What is the difference between hard gelatin and HPMC capsules?
Hard gelatin capsules are made from animal gelatin and hold about 13–16% moisture. HPMC capsules are made from hydroxypropyl methylcellulose, a plant-derived polymer, and suit vegetarian, halal or moisture-sensitive products. HPMC shells need a different dipping set-up, using heated pins or a gelling agent, so decide which shell you will make before you order the line.
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 lender.
Sources and references
- Drugs and Cosmetics Act, 1940 and Rules, 1945Central Drugs Standard Control Organisation, checked Oct 2026
- Lok Sabha Unstarred Question No. 864: revised Schedule M (G.S.R. 922(E), 28 December 2023)Lok Sabha Secretariat, Parliament of India, checked Oct 2026
- Extension of time for implementation of revised Schedule M (Circular PXL/HO/Cir-087/2024-25)Pharmaceuticals Export Promotion Council of India, checked Oct 2026
- Hard Empty Capsules From India: Final Affirmative Countervailing Duty DeterminationUS Department of Commerce, Federal Register, checked Oct 2026
- Hard Empty Capsules from Brazil, China, India and Vietnam: final determinationsUS International Trade Commission, 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.