Different Types of Milling Business in India

Narendra Kumar

17 Oct, 2019

Milling Business in India

Milling Business in India has about 11.2% of arable land in the world. It is also the 6^th largest food and grocery market in the world. The food processing industry in the country is seeing the upward trend because of the increased presence of global players, the better purchasing power of the common man, rising retail trade, and urbanization.

The government of India is also supporting the cause with 100% foreign direct investment permitted for food processing industries.

What are the Different Types of Milling Business in India that are Profitable?

1. The Dal mill – has two components to it – the Dry mill and the wet mill. This business can be started with a substantial capital investment
2. Flour milling business that includes bran mill, corn flour mill, gram flour or besan mill, shoji mill, wheat flour or the Atta mill and the wheat flour or the Maida mill.
3. Rice milling –one of the commonest milling businesses in India as it is a major food grain of India alongside the country is also one of the largest exporters of rice to the world.
4. Sugar milling business – for processing sugarcane to produce cane sugar, bagasse, molasses and filter cake.
5. Saw Milling business in India  –this mill is profitable if set up close to the forest
6. Paper milling business – choosing to open this type of mill close to the forests is a good idea. This too requires a sizeable investment
7. Spinning mill – for converting fibers into yarns. Fibers can be natural cotton or synthetic fibers.
8. Textile mills – for production of handloom, power loom, hosiery, knitting, blankets, readymade garments

What are the Milling Business Indicators in India?

As per a report from the World Bank, 52% of the Indian population earns a livelihood through agriculture. India is the second-largest producer of rice in the world after China and third largest producer of wheat after China and EU countries and ranks 7^th in corn production in the world.

When it comes to exports, India stands second in exporting rice and sixth in exporting corn in the world. India also exports wheat but follows an unstable route.

The number of registered food processing units in 2014-15 was 38608. The food processing industry alone gives employment to about 12.77% of India’s population. The industry contributes 9% and 11% respectively to India’s GDP in manufacturing and agriculture sector. The industry also contributes to about 13% to India’s exports.

In the wood industry, the demand for wood is expected to increase from 85 million cubic meters in 2008 to 150 million cubic meters by 2018. In the paper industry, due to the unavailability of raw material in the domestic market, India has been importing paper from ASEAN countries.

The number of spinning mills in India in 2012-13 was around 1762 and composite mills were 199 numbers; exclusive weaving mills were 173 in number and power loom units were around 3.12 lakh.

What are the Required Milling Business Registrations and Licenses?

1. Registration of the business under proprietorship, limited liability partnership Registration Company Registered under the Companies Act, 2013^[1].
2. Mandatory license from the local municipal authority
3. The Udyog Aadhaar MSME registration for deriving benefits of micro small and medium enterprises
4. FSSAI Registration required for food processing mills like the flour, rice, sugar or the dal mill. The Food Safety and Standards Authority of India provide a fourteen digit license that needs to be printed on the food packaging compulsorily. It is done to ensure adulteration free and standardized products from the food processing unit.
5. AGMARK Certification is a pre-requisite for agricultural products for conforming to the set standards from the government-owned Directorate of Marketing and Inspection.
6. BIS Certification is mandatory for certain products and voluntary for certain others. It is a third party that audits for quality, safety, and reliability of products
7. GST Registration is mandatory under government rules when the business earns revenues more than a specified limit to conduct a taxable business dealing with products and services.
8. Pollution clearance for setting up and running a mill business in India is not required. However one needs to check with the state pollution control board for the requirement of a clearance at the local and state level.