How To Start Herbal Oil Business -License, Investment

Introduction on How to Start a Herbal Hair Oil Business in India

Herbal hair oil (Ayurvedic) is attaining immense popularity in present times. It is showing its versatility for its significant effect in reducing headaches and cause a comforting effect. This hair oil mainly contains oils of vegetables in origin as a base that is blended with perfume.

The ingredients used in preparing this oil are extracts of Amla, Bahera, Hartago, Chandan, Lawanga, Kewara, Jatamansi along with Pudina Satta Kapur, and Til oil. The great resourcefulness of herbal hair oil like Banphool oil is being comprehended enormously owing to its basic ayurvedic properties. The demand for the product exceeds its production.

A step by step guide on how to start a herbal hair oil business in India

Some essential and ayurvedic oils focus on hair growth and avoid hair loss. Herbal hair oil mainly includes oils of vegetable in origin for the base and a suitably blended perfume. However, mainly used base oils are castor, coconut, and sesame oils. Besides, you can include oil-soluble colors to the oil. Generally, herbal hair oil comes either as single or in a combination of two or three or more oils mentioned previously. And some of the most popular are Brahmi-Amla Hair Oil, Amla Hair oil, Almond hair oil, etc. The base of these oils is the same. Furthermore, you may begin with a low investment also. Here in the blog, we plan to explain how to start a small herbal hair oil manufacturing plant.

The market potential for herbal oil production in India

It is a very common personal care item among men, women, and even children. Demand is increasing quickly. Due to the increased awareness of hair care, advertisement messages via satellite TV channels and in different sources, the market is upsurging. Also, the increased purchasing power of the individuals is contributing as a driving factor.

At the same time, herbal hair oil has a market in other countries too. Yemen, Australia, Malaysia, Singapore, the United States of America, and Japan are the most potential importers for herbal hair oil.

Market research to start a herbal hair oil business 

Before joining the real business, it is enormously critical to know about the demand for hair oil in your region. You will find broadly three categories of oil available in the market.

They are heavy hair oil, light hair oil, and cooling hair oil. If you are beginning new with low capital investment, it is recommended to target one segment at the starting phase unlike big brands such as Unilever PLC, L’Oreal, which cater to each segment of hair oil items.

Do extensive market research for your intended target and select the best hair oil type you are willing to manufacture and sell.

Business plan to start and make a profit in herbal hair oil manufacturing business in India

After you are appropriately trained on the essentials of making hair oils, take some time off, and start designing a business plan for your business. For a manufacturing business, this business plan is very essential. There are plenty of free business plan applications on the internet which can be useful. Kindly go through this article to find some important aspects that could be included in the plan.

License, permits, and registrations required to start herbal hair oil manufacturing business

  • In starting this business, you must obtain various registration and licenses from the government authorities. Check your state law. Here we keep some of the basic requisites.
  • Mainly, register your business with ROC. Select the form of the organization properly.
  • Obtain Trade License from the local authority.
  • Additionally, apply and register for MSME Udyog Aadhaar.

This product will be categorized under cosmetics. You should obtain a Licence from the State Drugs Controller or State Licensing Authority. Approach your Local Drugs Inspector for availing all legal information for the steps.

  • You may even register your manufacturing formula with Patent Registration.
  • Verify if the product is Vatable or not in your province.
  • Lastly, if you need to enter in exporting the item, obtain an IEC code.

The machinery required to start a herbal hair oil manufacturing business

Select a factory area properly carefully. You must have 300 sq. ft. space for the manufacturing tasks. Also, you should arrange utilities such as water and electricity provision. Furthermore, you should appoint skilled and semi-skilled employees for the production works. Manufacturing machinery necessary based on technology. However, here we have listed a few machines for your convenience. 

  • Mixing tank with stirrer
  • Constant filling machine (two-headed)
  • Cap Sealing machine
  • Filtering equipment
  • Finally, testing and other miscellaneous equipment

Raw materials required to start a herbal hair oil manufacturing business

The basic raw material needed is castor oil, coconut oil, other herbal oils, perfumes, and colors. Moreover, for herbal oil packaging, you should obtain the packaging consumables.

Location required for starting herbal hair oil business in India

Selecting a factory location is one more significant factor in a profitable herbal hair oil manufacturing business. You must take care of the location is not too far from the immediate target market as it will hugely enhance the transportation expenses and thereby decreasing the profit margins.

Herbal hair oil manufacturing process

Herbal hair oil manufacturing process.
Herbal hair oil manufacturing process.

Commonly, the manufacturing process comprises the below steps:


First of all, you should mix all the ingredients like herbal extract/oils, base oil, perfumes, and colors in the required proportions. You must use the mixing tank and gentle speed stirrer for 15-20 minutes and then allow to settle down for 2-3 hours.


Then you will require to filter the oil by using the filter press.


After filtration, you will require to send the oil to the laboratory for mandatory testing.

Bottling and labeling

After completing the essential inspection, oil is now filled in pure and completely dried bottles in needed volumes. Bottles are closed and labeled.


Now you can use corrugated boxes for packaging purposes. Lastly, the goods are available for marketing.

Investment required to start a herbal hair oil production business in India

The investment for starting an herbal hair oil business varies depending upon the scale of your business. You can start at Rs. 3 lakhs to Rs. 5 lakhs for small-scale business. As the machinery cost varies depending upon the brand you choose.

Profit margin in herbal hair oil business

The profit margin will be less in the initial stages. But it varies depending upon the quality you give to the customers. In later stages after your brand gets established your profit margin increase to 25%- 30%. 

You should not miss this: How To Start A Gardening Business In India.

Marketing strategies to promote and sell your herbal hair oil

This is the most essential part of the whole business-building process. If you don’t have an effective marketing strategy, all your strain might go in vain. Design a well-planned marketing plan that must comprise a distribution strategy and promotional plan.

Do not forget to spend on creating a website and using social media in advertising your business. If possible, and budget permits try to plan an online store to sell your hair oil products through the website. Hair oil is the most basic product used everywhere. The demand for perfume based herbal oil is seen from the rural area to urban region.

Women use it for both for hair care as well as a beauty care product. The prospect of higher growth of the hair oil market is estimated to be more in countries like India next to China and Japan. If you are existing in a developing country, the herbal hair oil manufacturing business will be a cost-effective business with profound profits.

In case if you are interested in this: Growing Herbs Organically in the Backyard.


  1. Plz tell to start this business from home..which legal formalities and if I started this business from home how to do test the product at home..if lab not available at home..?


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