Get the Tata Capital App to apply for Loans & manage your account. Download Now


Equipment Finance

Avail Digital Equipment Loans
up to Rs. 1 Crore

  • Attractive ROIs
  • Customizable Loan tenure

Equipment Leasing

Avail Leasing solutions
for all asset classes

  • Up to 100% financing
  • No additional collateral required

Tata Capital > Blog > Loan for Business > Small Business Ideas For Rural Areas In India

Loan for Business

Small Business Ideas For Rural Areas In India

Small Business Ideas For Rural Areas In India

Starting your own business is a great way to become financially self-reliant and contribute to the overall development of the nation. While urban areas are difficult to crack into due to strong and established competition, rural areas have an untapped potential waiting to be discovered. 

With the ‘Atmanirbhar Bharat’ push by the Government of India, today, rural India is also bitten by the entrepreneurship bug. But while passion is necessary, you also need a profitable business idea that has a demand in these areas. And coming up with one may have been a frustrating process. But not anymore. Because if you are looking for low-cost small-town business ideas, we have you covered.

Let’s look at some small business ideas for rural areas in India that are less about hefty initial investments and more about collecting profits.

Here are some small business ideas for rural areas in India:

Small-scale manufacturing units

You can set up a small-scale manufacturing unit for products such as candles, jute bags, incense sticks, cotton buds, tea, matchboxes, papads, buttons, packaging products, pickles and more. Disposable products like paper plates, paper bags, paper cups, etc., are also in high demand.

Such production units require low investment as you can start one in spaces like a shed or a small plot of land. Apart from the raw materials, you will need equipment, a power supply, a water connection, and skilled personnel to start the manufacturing process. You can use a business loan to easily finance your initial expenses and get your venture off the ground. 

Manufacturing business ideas for rural areas, like producing agarbattis, disposable bags and the like, have a huge market in urban areas. At the same time, sourcing raw materials is cheaper and more accessible in rural areas. This allows for a higher profit margin, making manufacturing business ideas for rural areas on top of this list.

Medical store

Rural areas lack sufficient medical infrastructure. Most people must travel to urban areas to seek medical help. And since medical stores are dependent on hospitals, there is a dearth of them in rural areas. Opening a medical store in a rural area is a great business idea for reasons such as lack of competition and high demand. 

All you need to do is find a supplier and place periodic orders with them to source your products. Opening a medical store in a rural area is a highly lucrative business idea. 

Grocery store

Despite nearly 70% of the Indian population residing in rural areas, there aren’t enough well-planned retail outlets. Therefore, a grocery or Kirana store can bring in good profits for you.

After getting a license for your shop, all you need to do is lock a location, set up your store, pay rent and utility bills, and regularly fill the inventory. Gradually, as your shop grows, you can hire more employees to help you sell to a larger customer base.

Agricultural products and equipment

Selling farming products and equipment is one of the smartest small business ideas in villages. This is because a majority of rural households rely on agriculture for earning their livelihood. You can start selling pesticides, fertilisers, seeds storage, bactericides, animal feeds, insecticides etc.

Remember, it is necessary to get a license before selling these products. Similarly, offering farming equipment like ploughs, spreaders, heavy machinery, seeders, etc., can also prove highly lucrative.

Electronics store

Owning electronics like mobile phones is not limited to urban areas. Movies and entertainment are a big part of our culture in India, and irrespective of the place, it is always sought out. And so, opening a store where you can offer affordable but durable electronics is a great business idea for the rural market.

Further, mobile phones allow us to stay connected with our loved ones over large distances. In rural areas, it is very common for family members to move to big cities in search of better pay. And the only way to stay in touch is through cell phones. 

By opening an electronic’s store in a rural area, you would be providing highly desired products and accessing a big, hungry market. 

Flour mill

Rural areas have an abundance of raw materials for a flour mill. You can set up a mill near farms with easier access to fresh grains, including wheat, oats, corn, sorghum, barley, grams, etc.

A flour mill business will require funds for land purchase, renting or buying a building, securing machinery, and licensing and registration charges. You will also need working capital to finance the staffing, raw materials, rent, utility bills, marketing, transportation, distribution, and additional administration costs.

With business finance, you can easily tend to these expenses and cultivate a steady cash flow. Nowadays, you can check the business loan eligibility of your preferred lender online before approaching them.

In conclusion

According to the World Bank, as of 2021, 64.61% of India’s population lives in rural areas. That’s a substantial market for all these business ideas. From manufacturing business ideas for rural areas to opening grocery stores and flour mills, your business can become highly profitable in no time. 

If you are excited about a business idea but lack the capital required, turn to Tata Capital! We offer multi-purpose collateral-free business financing.

Get business loan interest rates starting at just 19% and amounts as high as Rs. 75 lakhs. We promise quick processing, minimal documentation, and structured EMI plans. What’s more, you can secure a flexible tenure of up to 36 months.

Visit our website and kickstart your business by applying today!

Leave a Reply

Your email address will not be published. Required fields are marked *