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How to set up Woodworking Business

Narendra Kumar

| Updated: Jul 05, 2018 | Category: Startup

Woodworking Business

Woodworking Business

Woodworking business, also called woodwork involves making items from wood including making furniture, cabinets, carpentry, carving, and woodturning.  Traditionally the largest contributors to the Indian woodworking industry have been Gujarat, Kashmir, Punjab, Uttar Pradesh and Kerala.

The types of wood 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 huge 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.

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

  1. All industries 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 form of furniture and other woodwork products for sale in India and abroad.
  3. FDI friendly investment policies and schemes also have attracted lots of foreign investment in the woodworking industry.

What are the Trends of the Woodworking Industry?

In the past few years, more than 3000 woodworking 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 till 2020. It was forecasted that the online home décor market will 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.

It is important to note here that India is currently ranked at 14th position in the world furniture market.

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.

What are the Licenses and Registrations Required to Open a Woodworking Manufacturing Unit?

The following are the necessary licenses and registrations that need to be procured 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:
    • Based on the size of the company – small company and Other companies
    • Based on control –Holding company, Subsidiary company, and Associate company
    • On the basis of the number of members – One Person company, Private company, and Public company
    • On the basis of liability – Limited by Shares, Limited by Guaranteed and Unlimited company
    • Listed and Unlisted company as per access to capital
  2. Trade License from the municipal corporation. It is an official permission by the local authorities to operate your business in the particular locality.
  3. GST Registration – this 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. No objection certificate from the Pollution Control Board. Each state has its own pollution control boards. The Central Pollution Control Board (CPCB) which comes under the Ministry of Environment, Forest and Climate in India. The State and Central Pollution Control Boards work together for supporting the cause of environment.
  5. No objection certificate 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 standards.
  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.
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Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

Business Plan Consultant


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