How to Start a Biodegradable Bag Manufacturing Business in 2025: A Complete Guide

What Are Biodegradable Bags?

Biodegradable bags are eco-friendly packaging solutions made from natural materials like corn starch, cassava starch, and polylactic acid (PLA). Unlike traditional plastic, these bags decompose naturally in the environment without leaving toxic residues. Commonly used products in this category include biodegradable carry bags, biodegradable garbage bags, and biodegradable shopping bags. These bags are widely used in retail stores, supermarkets, e-commerce packaging, and food delivery businesses. Thanks to their durability, compostability, and minimal environmental impact, the biodegradable bag market potential is expanding rapidly, especially in countries with stringent anti-plastic regulations.

Why Start a Biodegradable Plastic Bags Manufacturing Business?

There are multiple reasons why investing in a biodegradable plastic business makes sense today. The demand is high due to increasing plastic bans and growing environmental awareness. Governments are supporting such green businesses with subsidies, grants, and incentives. The market offers opportunities for both domestic sales and exports. Moreover, this business can cater to various industries like retail, food packaging, and logistics. Most importantly, it allows entrepreneurs to generate profits while contributing positively to the environment.

Step-by-Step Guide to Start Biodegradable Bag Manufacturing Business

1.     Conduct Market Research — Understand local demand, competition, and pricing trends

2.     Prepare a Business Plan — Outline your product line, target customers, investment, and marketing strategies

3.     Arrange Finance — Explore loans, grants, or self-funding options

4.     Register Your Business — Apply for GST, MSME/Udyam registration, and trade licenses

5.     Obtain Licenses & Permits — Get Pollution Control Board NOC and (optional) BIS certification

6.     Buy Machinery & Raw Materials — Source quality equipment and eco-friendly materials

7.     Set Up Manufacturing Unit — Choose the right location and install machinery

8.     Hire Staff — Operators, packers, and administrative staff

9.     Start Production — Manufacture, test, and package your bags

10.Market & Sell — Promote your business aggressively through multiple channels

How to Select the Right Place for Manufacturing

Choosing the right location for your biodegradable bag manufacturing unit is crucial. Ideally, it should be situated in an industrial area with excellent road connectivity to easily access suppliers and customers. The location should be close to sources of raw materials and target markets to reduce logistics costs. Ensure the availability of utilities like electricity, water, and proper waste disposal. Also, the area should comply with pollution control regulations to avoid legal complications in the future.

Machinery, Raw Materials, Staff & Costs

To start a biodegradable bag manufacturing unit, here’s what you’ll need:

Requirement	Details	Approximate Cost (INR)
Machinery	Film-making, cutting & sealing, optional printing machines	₹10–25 lakh
Raw Materials	Corn starch, PLA, vegetable oils	₹2–5 lakh
Staff	8–15 (operators, packers, admin)	₹1.5–3 lakh/month (salaries)
Utilities & Misc.	Electricity, water, packaging	₹1–3 lakh/month

Licenses and Permits Required

Before you start production, it is essential to secure the necessary legal permissions. You will need MSME/Udyam registration, GST registration, and a trade license to operate legally. Additionally, you must get a Pollution Control Board NOC, which certifies that your manufacturing process is environmentally compliant. While BIS certification is optional, obtaining it can enhance your credibility and trustworthiness in the market. These permits ensure your biodegradable plastic bags manufacturing business operates within the law.

Biodegradable Bag Manufacturing Process (Simplified)

1.     Mixing Raw Materials — Starch, PLA, and additives blended

2.     Extrusion & Film Blowing — Melted and formed into sheets

3.     Cutting & Sealing — Converted into various bag shapes and sizes

4.     Printing (Optional) — Branding or custom prints added

5.     Quality Testing — Ensure durability and compostability standards

6.     Packaging — Packaged in biodegradable or recycled materials for bulk delivery

Marketing Areas & Ideas

Marketing plays a key role in growing your biodegradable plastic business. You can target retailers and supermarkets with bulk orders of biodegradable carry bags. Partnering with e-commerce platforms and food delivery chains can boost sales for packaging and delivery bags. Listing your products on B2B portals like IndiaMART and Alibaba can attract wholesale clients. Creating an SEO-optimized website will help you reach customers searching online for sustainable packaging solutions. Social media marketing is effective for promoting the eco-friendly benefits of your products and sharing customer success stories. Participating in trade fairs and exhibitions can help you network and build partnerships in the industry.

Overall Investment & Profitability

Here’s a quick estimate to set up a small to medium-scale biodegradable plastic bags manufacturing plant:

• Total Investment: ₹15 lakh – ₹40 lakh (depending on scale and machinery)
• Profit Margins: 20% – 30%
• Estimated Turnover: ₹40 lakh – ₹1 crore annually (scalable)

Risks & Challenges

Like any other business, the biodegradable bag manufacturing business comes with its set of risks. The prices of raw materials like corn starch and PLA can fluctuate, affecting profitability. Regulations governing biodegradable plastics may change, so staying updated on government policies is important. The market is competitive, with players offering both biodegradable and cheap plastic alternatives. Finally, machinery and technology can become outdated, so timely upgrades are necessary. These risks can be mitigated by building strong supplier relationships, maintaining high product quality, and continuously innovating your offerings.