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How to Set Up a Furniture Business in India?

How to Set Up a Furniture Business in India?

Furniture Business, also called woodwork or Woodworking Business involves making items from wood. It includes making various furniture, carpentry, carving, and wood-turning. Traditionally, the states contributing significantly to the Indian furniture business industry are Gujarat, Kashmir, Punjab, Uttar Pradesh, and Kerala. It is one of the most profitable manufacturing business ideas.

Brief Introduction on Indian Wood Working Market Trends

The most important types of woods used in the Indian woodworking industry are Walnut, Sandalwood, Teak, Sheesham, Deodar, Ebony, Redwood, Rosewood, Cedar, Sal, and many other types.

Since the Indian terrain has been truly blessed with a wealth of green forests covering vast areas of land, and with all kinds of forests found in India be it the tropical forest or the coniferous forests or the deciduous or the evergreen forests help the woodworking industry get steady flow of raw materials and thrive and grow accordingly.

Main Reasons for the Growth in Demand of Furniture Business Industries

Some of the critical reasons for the growing demand of the woodworking industry in India are:-

  1. All sectors that are potential customers of the woodworking industry are growing at a tremendous pace, whether it is hospitality, tourism, retail, hospitals, and the real estate sector.
  2. With ‘Made in India’ campaign even the Government supports all indigenous and traditional forms of furniture and other woodwork products for sale in India and abroad.
  3. FDI[1] friendly investment policies and schemes also have attracted lots of foreign investment in the woodworking industry

Scope of Woodworking Industry in India

The Indian woodworking industry is one of the fastest-growing sectors contributing to the growth of India’s economy. India has about 1,00,000 registered existing woodworking units and above 2,00,000 artisans working in these manufacturing units.

In the past few years, more than 3000 furniture business units in the organized sector have been developed in India. And the numbers are increasing every year.

As per a study conducted by the World Bank, India’s organized furniture industry will keep growing at 20% per annum until 2020. It was forecasted that the online home décor market would grow at a CAGR of 50.42% in revenue over the period 2015-20, whereas the Luxury Furniture Market would grow at 4.1% CAGR in the same period.  India ranks at 14th position in the world furniture market.  

The woodworking industry is easy to start and does not require high investments. The woodworking business owner needs to set up a manufacturing unit, buy tools and machinery, and employ necessary skilled staff to make the woodworking products. Also required are few licenses and registrations depending on the number of employees hired at the manufacturing unit, the size of the business, and the type of business.

Furniture Business
Indian Market Share in the Global Furniture Market

What are the Licenses/Registrations Required for Opening a Woodworking Manufacturing Unit?

The following are the necessary licenses and registrations that you need to procure in order to open a woodworking company:

  1. Company Registration with the Registrar of Companies. With this certificate of incorporation, the business unit takes its official birth. As per the Companies Act 2013, the following are the different classifications done for companies:
    1. Based on the size of the company – a small company and Other companies
    2. Based on control –Holding company, Subsidiary company, and Associate company
    3. Based on the number of members – One Person company, Private company, and Public company
    4. On the basis of liability – Limited by Shares, Limited by Guaranteed and Unlimited company
    5. Listed and Unlisted company as per access to capital
  2. Trade License from the municipal corporation. It is official permission by the local authorities to operate your business in the particular locality.
  3. GST RegistrationGST registration is mandatory for a business whose annual turnover crosses the prescribed threshold limit of 20 lakh or 10 lakh based on its location or sells good and services across state boundaries or intends to sell their goods and services online.
  4. You need No Objection Certificate {NOC} from the state and central Pollution Control Boards. Each state has separate pollution control boards. The Central Pollution Control Board (CPCB) which comes under the Ministry of Environment, Forest and Climate in India give permissions to carry out their operations to the industry with any scope of becoming a source of pollution in any way. The State and Central Pollution Control Boards work together for supporting the cause of the environment.
  5. You need No Objection Certificate {NOC} also from the Fire Department. This one is especially necessary for manufacturing units that use flammable materials or welding tools and gas equipment that can cause a fire during the woodworking process.
  6. Certification from the Bureau of Indian Standards: The BIS formulates standards and certifies products that follow the rules.
  7. IEC registration in the event the business unit strategizes to enter the export market. The code is provided by the Directorate General of Foreign Trade and is a certificate that allows the business to carry out international trade smoothly.

Pros and Cons of Starting a Furniture Making Industry in India

Pros and Cons of Starting a Furniture Making Industry in India

The significant benefits of starting a woodworking industry in India are as follows;

  • You can start this business in a low budget; it is a cheap business
  • Woodworking profession is generally managed by one person. Hence you can work according to your needs
  • You can always start a class or training sessions to teach others woodworking skills
  • There is a lot of opportunities for research and development for product designing and development

Few significant concerns of the Wood Based Businesses are as follows;

  • The primary concern of any woodworking industry is the risk of fire.  Due to any such mishappening, all the assets of the entity wipe off in an instant
  • Risk of loss
  • Finding customers
  • You need to invest a lot of your time
  • There is a lot of competition
  • Marketing is a tough task


The furniture business is a straightforward and inexpensive business to start. Also, it is one of the fastest-growing industries in India. Furthermore, there is a vast scope for improvement in the growth of this sector in our country. Moreover, Indian geographical weather contributes to the growth of this industry, as the weather and climate factors of our country are adequate for vegetation growth. Hence, you can think to start a woodworking business as your next business idea.

Tanya Verma

Tanya is working as writer & editor from past 2 years with experience in covering startup and technology related topics.

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