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How to Start a Water Supply Business in India?

How to Start a Water Supply Business in India?

With rapid urbanization and increasing population, the demand for clean drinking water in Indian cities is on the rise. Businesses and civil societies are willing to pay for easy access to fresh, mineral-rich drinking water for daily consumption. That makes the water supply business one of the most profitable ventures to own. However, you need a well-planned strategy to be successful in your water supplier’s business. 

This blog will explore the step-by-step process on how to start a water supply business in India, and explain how to become a water distributor successfully.

Government Schemes and Incentives for Water Supply Businesses

There are various government schemes in India that support water suppliers’ businesses, especially those involved in treatment, conservation, and rural distribution. 

The Jal Jeevan Mission (JJM) scheme was launched in 2019 to provide functional household tap connection to every rural household by 2024. The government has extended the Mission until 2028 with an enhanced total outlay, allocating Rs. 67,000 crores in the Union Budget 2025-26. 

The scheme creates enormous opportunities for water supply businesses in infrastructure development, installation, and maintenance services.

Also, read – All about Dairy Entrepreneurship Scheme (DEDS)

Scaling Your Water Supply Business: From Startup to Expansion

Scaling your water business ideas require strategic planning and systematic execution. Here are some tips to help you scale your water supplier’s business. 

  • First, review how your business works to spot what’s going well and what needs improvement, and fix slow or inefficient processes.
  • Use data tools to track production, sales, and inventory so you can predict demand and manage supplies better.
  • Businesses can grow by launching new products in the markets, or selling existing products in new markets. Expanding this way helps increase reach, revenue, and long-term growth.
  • Explore funding options for your water business ideas like business loans, investors, or specialised visas to support international expansion. 
  • Maintain healthy working capital for inventory, equipment purchases, and operational expenses.

Also, read – Top Government Schemes for Startups and MSMEs in India (2026)

A step-by-step guide to starting a water supply business

Here are the steps to guide you on how to start water supply business that can be a profitable commercial venture in India: 

1. Develop a Comprehensive Water Supply Business Plan

Before starting a business, you need a solid roadmap for success. First, perform market research to identify competitors, prevalent products, and prices. It will also help you assess the actual cost of starting and operating a water business. Then you can easily formulate a business plan and decide your target market and price of your product.

2. Legally Register Your Water Supply Business

The next step in how to become a water distributor is to formally set up and register your company as a commercial water supplier. You have to decide the name of your company and its structure. Most water distribution businesses opt for Private Limited Company and LLP Registration. But if you are a solopreneur, you can also register your business as a Sole Proprietorship.

3. Secure Essential Licenses and Certifications

When private water suppliers have formed a company, they must apply for various licences and registrations necessary to run a business in India. And since water is for consumption, you will also need additional safety permits. Here is a list of permits and registrations you must apply for when starting a water supply business:

I. GST Registration

II. PAN Registration

III. Digital Signature Certificate Registration

IV. ISO/BIS Certification

V. FSSAI Registration

VI. Pollution Control and Pest Control Certifications

4. Choose the Optimal Factory Location

Location is also a key decision for commercial water suppliers because a mineral water factory requires adequate space for machinery and storage. Ideally, you will need a facility spread over 1000 square feet or more to fit all the equipment and storage units. Another factor to consider when choosing the location is the proximity to the target market. Make sure your clients are accessible within your serviceable radius.

5. Select Critical Water Supply Equipment

The next decision private water suppliers make is to decide the equipment they want for their factory. You will need a water pumping machine, a water purifying machine, and a water packaging machine. Depending on your needs, you can decide on the machinery based on its production capacity and level of automation it offers. 

6. Secure Business Funding and Loans

At last, you need adequate water supply business investment funds to function. One of the best ways to fund your business is to avail of a business loan. You can apply for secured and unsecured business loans to set up a business. You can also take loans tailored to meet specific business needs like purchasing raw materials, equipment financing, working capital needs, etc. Business loans give you instant access to funds and you can repay the loan as your business grows.

Also, read – Stree Shakti Scheme 2025 – Details, Features & Benefits

How to Obtain Water Supply Licenses in Major Indian Cities

To establish a water supply business in India, you need to get major licenses for legal compliance, market access, and consumer confidence. These include:

FSSAI License: It’s mandatory if your water supplier’s business is involved in producing, packaging, or selling packaged drinking water in India.

Water Extraction Permission: To make sure you are extracting water in a legal way, you need to obtain a No Objection Certificate from the Central Ground Water Authority (CGWA). 

Pollution Control Board Approval: The water treatment and bottling plan you are operating should be in compliance with necessary environmental norms. To prove this, you need to get a clearance certificate from the State Pollution Control Board (SPCB).

Trade License: You’ll obtain the trade license from your city’s Municipal Corporation, which has the power to authorise business operations within its jurisdiction. 

Also, read – Mahila Udyam Nidhi Scheme – Features, Benefits, Eligibility, and Approved Businesses

Top 5 Equipment Essentials for a Water Supply Factory

The equipment used in your water supply business depends on the type of business. Some of the common machines you need to spend your water supply business investments are:

RO Machines: Used to remove dissolved salts, minerals, heavy metals, and impurities from water by pushing it through semi-permeable membranes, ensuring safe and purified drinking water output.

Water Storage Tanks: To store large quantities of purified water to maintain steady supply during peak demand hours and provide emergency reserves for uninterrupted business operations.

UV Sterilizer: Eliminates harmful microorganisms including bacteria, viruses, and protozoa using ultraviolet light without adding chemicals, killing up to 99.99% of germs within seconds.

Sand and Carbon Filters: Sand filters remove suspended solids, sediment, and turbidity while activated carbon filters eliminate chlorine, odours, colours, and organic compounds that could damage RO membranes.Micron Filters: These filters capture fine particles and remaining contaminants (1-5 microns) as the final pre-filtration stage before water enters the RO system, protecting expensive membranes from damage.

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FAQs

What is the minimum investment required to start a water supply business in India?

A small-scale water supply business can require an investment of somewhere around Rs. 10 to 20 lakhs. Large-scale businesses can require an investment of up to Rs. 50 lakhs.

Are there tax benefits for water supply businesses under government schemes?

 

Water supply businesses can benefit from specific GST exemptions. For instance, unbranded drinking water supply, including tanker services for residential use, attracts zero GST.

How long does it take to get necessary licenses for a water supply business?

 

It can take somewhere around 1-2 months to get approval for necessary licenses for your water business ideas. 

What are the most profitable niches in the water supply industry?

 

Some of the profitable water business ideas include advanced water treatment and recycling, specialised bottled water production, water recycling, and smart water management solutions.

Can I operate a water supply business as a sole proprietorship?

 

Yes, you can operate your water supply business as a sole proprietorship. Additionally, you can apply for other business structure, such as partnership or private limited company.

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