A kitchen feels incomplete without onions. They are one of the most essential ingredients in cooking. However, when onion prices rise sharply, many households reduce or stop using them regularly.
This increases the demand for onion paste, creating a great business opportunity.
The process of making onion paste is simple, and anyone can start this business to earn a good income.
Onion Production and Market Demand
Onions are widely consumed across the country, with Maharashtra, Madhya Pradesh, and Karnataka being the largest producers. The biggest onion market in India is in Lasalgaon, Maharashtra.
However, heavy rains often damage crops in Maharashtra and Karnataka, leading to onion shortages. In such times, producing onion paste can be a profitable business idea.
Cost of Starting an Onion Paste Business
The Khadi Village Industries Commission (KVIC) has created a project report on setting up an onion paste business.
According to the report, you can start this business with an investment of Rs 4.19 lakh. If you lack funds, you can apply for a loan under the government’s Mudra scheme.
Breakdown of Costs
Rs 1 lakh for constructing a building shed
Rs 1.75 lakh for equipment like a frying pan, autoclave steam cooker, diesel bhatti, sterilization tank, small utensils, mugs, and cups
Rs 2.75 lakh for operational costs
With this setup, you can produce around 193 quintals of onion paste per year. At a rate of Rs 3,000 per quintal, the total value of production will be around Rs 5.79 lakh.
Marketing and Profit Potential
Once the onion paste is ready, proper packaging is crucial. Designer packaging attracts customers and helps improve sales.
Using social media for promotion and, if possible, creating a company website can help grow your brand.
If production runs at full capacity, you can generate Rs 7.50 lakh in sales per year.
After deducting all expenses, the estimated gross surplus will be Rs 1.75 lakh, and the net profit is expected to be Rs 1.48 lakh per year.
Starting an onion paste business is a smart and profitable idea, especially during periods of high onion prices. With low investment and growing demand, it presents a great opportunity for entrepreneurs.
