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Updated On :
July 15, 2023

How to start a Paper Bag Making Business in India?

July 15, 2023

A concern towards nature gave birth to the idea of making paper bags. Almost every business is resorting to the usage of paper bags for carrying their products. The plausible reason behind this could be the realization of disadvantages associated with plastic bags.

The demand for plastic bags is continuously increasing. Also, the government has developed a soft corner for eco-friendly products.

Paper Bags

The paper bag-making business offers ample opportunities. Do not hesitate to step into this business. All you need to care about is the quality of the paper bags. The quality of the paper bag should be fine. If you are triggered with the idea of starting a paper bag business, then read the article to learn about How to start a Paper Bag Making Business and investment, license, marketing, and other aspects of the paper bag business.

Scope of Paper Bag Business

Since the government has banned the use of thin plastic bags, businesses have made paper bags as an alternative. From food outlets to medical stores, everyone has started using paper bags for selling their products.

It is safer to enter this industry as the business came into existence only a few years ago. And it can survive for a longer time. The most important matter of concern is the quality standard and hygiene while manufacturing paper bags. Because paper bags are used for packing food items.

The paper bag business is not free from risks. You have to be a little more cautious while manufacturing paper bags. As the usage of a toxic substance can land you in tough situations. Make sure you are constantly checking the quality of the products used for making paper bags.

The business opportunities in the paper bag business are available in abundance. Either you can invest in a single industry or deal with multiple industries. Here is the list of industries you can invest in-

  • Food Industry- You can produce paper bags and sell them to the companies dealing in food products. You can consider contacting food franchises, local outlets, ice cream franchises, grocery stores to sell paper bags. 
  • Medical use- You can contact pharmacy franchise, local medical stores, chemist shops to sell your paper bags. They also use paper bags to pack their products. You can fetch heavy orders from the medical industry.
  • Shopping bags- Do not forget to consider contacting local garment stores. You can also deal with big brands. Usually, brands use paper bags to sell their products. This is a great source of earning revenue. 
  • Jewelry Shops- Go to jewelry shops. Jewelry shops are using paper bags to sell their products. You can contact franchise as well as local jewelry shops in your area. 
  • Packing of semi-finished goods- Nowadays, businesses are using paper covers to pack their semi-finished goods as well. 
  • General-purpose- Paper bags are also used for domestic purposes. With the improvement in lifestyle, people are resorting to eco-friendly things. And using paper bags is one of them. People have started using paper bags for shopping. So, you can target the domestic audience to sell paper bags.

How can I start a paper bag business?

Go through this stepwise guide to find the answer to the current most wanted question of yours-

  • Research- Before you start a paper bag business, make sure your research is mind-blowing. Good research can help you in building a strong business plan. It acquaints you with the status of the market, competitors. 

  • Business plan- A business plan is more important than it seems to be. A business plan must be developed for a paper bag business. A business plan is required for every business. It is the blueprint of a business’s plan, strategies, actions everything. A good plan can help you in pitching the investors.

  • Investment- The next step is to procure finance. You cannot proceed without investment for sure. You have to look for the best source to fund your business. If you want to obtain a loan from a bank, then apply as soon as possible. Start procuring finance right after making the business plan. 

  • Choose the location- Now that you have arranged finances for the business, the next step is to choose the suitable location for your business. Find the industrial area for your paper bag business. Starting a paper bag business in the middle of the market is not a sensible decision.

    It can also reduce the cost of production as the rent is relatively cheaper in such areas. Also, you can manage to get the labor and electricity at lower prices in these areas. While choosing the location for your paper bag business, assess the transport facility. Transportation is one of the most important factors in deciding the location of your paper bag business.

  • Apply for license- After choosing the location, the next step is to obtain all the necessary licenses and registrations. Before starting the business, make sure you comply with all the legal formalities. The licenses that would be required to run a paper bag business include a trade license, BIS certificate, and GST registration.

  • Buy machinery and equipment- After obtaining the required license and registrations, your business comes into existence. Now start procuring capital assets. By capital assets we mean, the required machinery to run a paper bag business. The different types of machines that are required include printing machines, pressing machines, punching machines, bag cutting machines, etc. Get your machinery from a reliable dealer.

  • Raw material- Paper bags cannot be manufactured without the raw material. Now start procuring the raw material required to start a paper bag business. The basic raw material that would be required includes, paper rolls, paper sheets, strings, gums, etc. Before purchasing the raw material, check the quality of raw materials.

  • Get a logo (optional)- You can get a logo designed for promoting your business. But if you deal with other businesses, that choose to get their logos printed on paper bags, then you don’t spend time on designing the logo. You can consider doing it for your website, for brand recognition.

  • Promote your business- Do I need to say this? Probably no. We all are well-aware of the miracles, marketing can do. Good marketing can help you in increasing sales and generating revenue.

    Choose both digital as well as traditional marketing strategies to promote your paper bag business. Kickstart your business- Start contacting wholesalers, franchises, and local stores to sell your bags. Start finding customers online. This is how you can flourish your business.

Now go through the small process to produce paper bags. This could help you in understanding the functioning of the paper bag business before entering into it.

Process of making paper bags

Let’s talk about the small process of making paper bags-

Step 1 – Cutting

The first step is to cut the paper sheets according to the size of the paper bag. This can be done using a paper bag machine.

Step 2- Pressing

The next step is to press the side of the paper. After that stick it with the help of gum. This is to be done using a pressing machine.

Step 3- Printing

Now print the design or the information that is required to be printed on the paper bag. This can be done using a printing machine.

Step 4- Punching

The next step is to create holes in the paper bags. It can be done using a punching machine. 

Step 5- Handle attach

A paper bag can be carried using the strings. So, the strings can be attached to the bag using the relevant machine. 

Step 6- Packaging

After manufacturing the paper bag, pack them in cartons.

While making paper bags, make sure you are checking with the quality standards. It should not contain toxic substances as this could lead the company to a pool of evitable repercussions.

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Investment required to start a paper bag business

No business can run without finance. The matter of primary concern is how much money is required to start a paper bag business. Here is good news for the budding entrepreneur that a paper bag business does not ask for heavy investments.

At the initial level, you can begin at a small scale with a small investment. Like other businesses, the extent to which you want to start a business depends on the factors like budget, skills, management capacity, land, labor.

If you can manage to pitch a big amount, you can start to a bigger extent. Make sure your business plan is extraordinary. Neither start with a small amount, nor with a big amount without research. Research thoroughly. 

An estimated amount of INR 10 lakhs would be required to start a paper bag business. A fully automatic paper-making machine costs around 5-8 lakhs. Don’t worry! You can begin with semi-automatic and hire manpower that can do the remaining work. A semi-automatic machine costs you around INR 3 lakhs. Apart from machinery, you would also have to invest in other areas.

Make a draft on a sheet. Consider the resources you already have and the ones you have to acquire. This can cut your cost and aid you in spending the money in the right area. Choose your location, suppliers, and even target market cautiously. These factors are going to affect your investment. 

The type of cost you are going to incur when you will start a paper bag business-

  • Cost of machinery
  • Rent (if any)
  • Raw material
  • Manpower
  • Stationery
  • Electricity
  • Water
  • Marketing

The draft is ready. You estimated the resources you have and the resources you need to procure. You can obtain finance for your paper bag business from the following sources-

  • You can apply for bank loans. 
  • If you want to start at a bigger level, you can obtain finances from crowdfunding as well.
  • Another option is investors. Make an out-of-the-box business plan and start pitching investors.
  • You can start a partnership firm to obtain the finances. 

You can use any of the above-mentioned ways to obtain funds. If you have different plans, don’t wait to execute. 

Raw Material Required to start a paper bag business

Can you make any product without raw material? Definitely, not. The need for raw material varies based on the type of business. You are required to allocate the raw material for every business from different sources. One of the most important things while gathering raw material that should be kept in mind is the maintenance of inventory of raw materials. 

Inventory management is an important part of every business. The lack of availability of raw materials on time could lead to loss of company by stopping the work. 

The raw material required to run a paper bag business includes-

  • Paper Sheets
  • Eyelets
  • Laces and tags
  • Polyester Stereo
  • Paper rolls
  • Printing chemicals, ink, etc.

These items complete the list of raw materials required to run a paper bag business. Make sure you are not overstocking, as this could lead to an increase in the costs. 

Machinery and Equipment

You procured the raw material but you cannot produce paper bags without the machinery. Make sure you procure the machinery from the most reliable source.

While purchasing the machinery, various factors like durability, functions, guarantee, warranty, productivity everything should be considered.

The type of machinery you are purchasing is going to affect other factors like manpower. Try to choose the best out of the rest.

paper bag making machine

Undeniably, you can gather a lot of information about machinery on the internet. But the best thing is to get the knowledge from a manufacturing firm. It is advisable to visit a paper bag manufacturing firm to learn about the different aspects of machinery.

The cost of machinery starts from INR 3lakhs. Some of the important equipment and machinery that should be purchased for a paper bag business includes-

  • Bag cutter
  • ing machine
  • Punching machines
  • Printing machines
  • Testing scale machine
  • Eyelet fitting machine
  • Lace fitting machine
  • Roll slitter motorized machines
  • Stereo press and stereo grinder

The prices of machines vary depending on the type of business. An automatic paper bag-making machine costs INR 5-10 Lakhs. While semi-automated machinery costs you around INR 3 lakhs. You can choose the machinery by considering different factors like requirements, budget, productivity, manpower. 

You can use a separate printing machine or the machine that has a printing function associated with it. Also, use a preventive maintenance strategy to maintain the condition of your machines. Preventive strategy means the machine should be regularly serviced. It should be checked before it stops working or shuts down.

Prevention is better than cure. It is better to spend on prevention strategies rather than spending on repairs to the machinery. This could also affect the productivity of the company.

You can also get machinery on lease. Either you can purchase or get it on a lease that depends on your capacity.


The requirement of labor depends on the size of your business. If you are beginning on a small scale, you would not require much labor. The maximum number of laborers you can need a small business is 10. But if you are beginning at a bigger level, you would require more laborers in the production unit. 

The number of laborers has no concern with the training requirements. Even if you begin with one laborer, you have to train him. And if you want to maintain the standards of your bags, you should train them to manufacture the paper bags.

You can hire an unskilled labor force for this work. Other unskilled staff includes watchmen, cleaning staff, etc.   

Talking about skilled labor, one graphic designer can handle the designing work. The design of the logo of your business can also be designed with the help of a graphic designer.

An accountant is required to handle cash matters or if you want you can handle this department yourself. With the expansion of the business, the requirement for manpower will also increase. 

License required for a paper bag business

Like every other business, a paper bag business also requires a license and registration. You need to comply with legal formalities before starting a paper bag business. The first license you would require is a trade license.

The trade license can be obtained from the nearest municipal authority. After that get your UDYOG AADHAR registration completed. It is necessary for small-scale industries. If you are running at a bigger level, you don’t have to register. Instead of grinding on roads, you can obtain this registration online through a website (udyogaadhar.gov.in).

Like other businesses, paper bag business also requires a GST number. After getting Udyog Aadhar registration completed, apply for a GST number to the relevant authorities.

Another certification you would require for paper bag making business is- BIS (Bureau of Indian Standards) certification. After obtaining these registrations, licenses, and certificates, you can start a paper bag business in India.

Bureau of indian standards

Here is good news for you, if you are planning to start a paper bag business. If you cannot afford to start a paper bag manufacturing firm, you can even start a paper bag business from home as well.

How to start a paper bag business from home?

The global pandemic didn’t allow us to move out of the four walls. And people are looking for more and more methods of earning from home. You can start a paper bag business from home as well. Check out this section to learn more about it.

  1. Define your goals- Before starting a paper bag business from home, define your goals and expectations. Write your short-term and long-term goals on a piece of paper. 

  2. Find an answer to why this business- Before starting any business, you are confronted with a question why shall I go for this business. There could be many answers like you always wanted to start a business, you are looking for extra income method. Other possible reasons could be-
  • Paper bags are fashionable and look elegant to carry.
  • It is an eco-friendly business.
  • Paper bags are recyclable and reusable.
  • Can be used for gifting purposes.
  • It can be produced from waste papers as well.
  • Facilitate B2B dealings.

    3. Investments-For handmade paper bags, you may not require machinery, but you have to invest in raw material. It is not possible to run a business without raw materials. The raw material you would require includes-
  • Paper sheets
  • Gums
  • Scissors
  • Laces, threads
  • Eyelets
  • Paper rolls
  • Decorative accessories (if required)

    4. Learn to make paper bags– It is great if you can make paper bags. But if you cannot make paper bags, you can either learn from YouTube or a professional trainer. It is advisable to learn from the professional trainer as they can provide you can directly clear your doubts with them.

    But if you trust your potential, then you can go for YouTube as well. You can learn different designs and styles to produce a paper bag. Keep your knowledge updated and do not hesitate in producing new designs. People love change (positive).

    5. Decide Your type-You can make different types of bags for different businesses. Now it’s up to you, whether you want to deal with one industry or multiple industries. You can also sell bags for domestic purposes.

    You can make party bags, shopping bags, etc. I would strongly recommend dealing with multiple industries. As this would increase your reputation. Try to offer unique and attractive handbags to your customers. This could help you in developing a fondness for your business among the customers.  

    6. Inventory Management– Whether you run a business from home or office, you need to manage your inventory. Just imagine running a business with a poor inventory management system. It could lead to stoppage of work or reduces the speed.

    If you are not planning the inventory of your raw material, you are ought to suffer the loss. Avoid overstocking, as this could compel you to bear heavy losses. At the initial level, do not pile up your room with paper bags.

    Produce a limited number of handbags, understand the taste of your customers and then go for massive production. This is the best strategy to manage the inventory of a paper bag business (from home). And by inventory management, I mean the inventory of both raw material and finished products. 

    7. Start Selling– Kickstart your business now! Several options through which you can sell. It is advisable to choose your medium beforehand. This is how you can sell your handmade paper bags-
  • At home
  • Through What’s app or other social media platforms
  • Through a website
  • Local stores
  • On art fairs and craft shows
  • Exhibitions

This is how you can start a handmade paper bag business from home as well. This is a great source of secondary income. And if it yielded desirable results, you can expand and work full-time.

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Marketing Strategies

A strong marketing strategy can do wonders. Marketing allows you to present your message to your customers in the most promising way. Gone are the days, when traditional marketing was enough to advertise your business.

Digitalization has entered all the spheres of life. Then why marketing would remain spared. It has become an inseparable part of marketing. Almost every business has resorted to using digital marketing strategies for advertising. We will be talking about the traditional and digital strategies of marketing your paper business.

Traditional marketing strategies-

  • Talk about the material– Right from the beginning of the article, the stress has been laid on the quality of paper bags. The fine quality is the most appealing feature of a paper bag. You must have considered this aspect during production. Then, why are you hesitating to flaunt? You should convince the customers by stressing the advantages of using good quality bags.

  • Talk about eco-friendly nature– How can you forget talking about the most desirable advantage of a paper bag? Paper bag is a recyclable and reusable product. It is eco-friendly. And that’s why after the banning of thin plastic bags, the demand for paper bags has substantially risen.

  • Make it look attractive– It is a human tendency to get attracted to beautiful things. Use decorative material to embellish your paper bag. Use frills and thrill your customer. Use colorful paper for making gift bags.

    For example, ribbons can be used in place of strings. This is how you can use innovative methods to promote your paper bag business in India. Spare some time and design your bags properly. Spending time on designing bags could be one of the best decisions for your business.

  • Start spreading messages– This is a great technique of marketing. You can add some positive messages for your purchasers to the bag. You can also add quotes or something to advertise your business. You can outshine your competitors by using such marketing strategies. 

  • Build connections– The first thing you need to do is build a network. Start looking for wholesalers or collaborations with brands. If a domestic audience is your target, reach them out through a wholesaler chain but if you want to deal with businesses, you have to approach them.

Apart from using these traditional marketing strategies, you can also promote your business digitally. Use different digital marketing techniques to promote your paper bag business.

Digital Marketing Techniques

We are apprised of the divine powers of digitalization. The whole world has shifted on the internet. And you want to sell your bags to the world, then you should also go on the internet. Go through these digital marketing strategies and choose the suitable strategy.

  • Develop a website– First of all, go to a team of professionals and develop a responsive and promising website for your business. It is up to you whether you want to start an e-commerce website or a business website.

    The difference between an e-commerce website and a business website is that you can sell your products through the e-commerce website. But the business website does not provide you with this facility. 

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Your website should contain the relevant details associated with your business. You can use different methods of digital marketing to promote your business. Also, release at least 3 blogs in a week to keep your customers engaged. Develop chatbots to answer the queries of your customers. This is how you can promote your paper bag business using a website

You don’t have to worry about developing a website. Because Traffic Tail is here! Traffic tail provides the best website designing services at affordable prices

  • Social Media– People are operating their businesses through social media. Social media is a great source of connecting to your customers. You can have two-way communication. Social media marketing is not as easy as it appears.

    You need to develop strategies to promote your business on social media. In beginning, it might not be possible for you to develop effective strategies to promote your bags. But the least you can do is click eye-catching photographs of your paper bags and post them. Add catchy and convincing captions along with the product. 

  • Online contests– Your website and social media account should not be boring. Keep organizing online contests for your customers. It could be a quiz, survey, or any other game. Lure them by offering gifts on completion of the survey, or to the winners of the quiz. These gifts should be goodies. Goodies mean your paper bags. 

Pro tip-Cater for your customers effectively and politely. One customer can build a chain of customers through recommendations. A satisfied customer can do a lot more than some of the marketing strategies. 

Marketing always has room for innovation. You can introduce unique and innovative strategies to promote your bags. You can use your ideas for both digital and traditional marketing. The main purpose is to make people aware of your business. 

Important Tips

  • Before starting a paper bag business, define your goals clearly.
  • Make a draft that explains the financial status of the business. It should answer the questions like, how much money is required. How much money do you have? How can you obtain it?
  • It is advisable to start a paper bag business on a small scale.
  • Make deals with wholesalers for the raw material.
  • Choose the industrial area for setting your manufacturing unit.
  • Purchase your machinery from a reliable source. 
  • Choose a combination of digital as well as traditional strategies of marketing. 
  • You can flaunt eco-friendly nature while promoting the paper bag business.
  • Consider all the relevant factors while purchasing the machinery.

Starting a paper bag business is not that difficult. All you need to do is develop a strong plan and invest wisely. Make sure you have obtained all the required licenses, registrations, and certificates. A paper bag business runs on quality.

Keep checking the quality of your paper bag. The Paper bag business is an eco-friendly one. So, don’t forget to flaunt this quality while advertising your business. 

You can start this business from home as well. All you have to do is learn to make paper bags and run your business. You don’t require heavy equipment to run a paper bag business from home.

Talking about marketing, you can use both digital and traditional marketing strategies to promote your business. It would be advisable to use the combination of digital and traditional marketing strategies.

The paper bag business has ample opportunities. The demand for paper bags is rising, so you can enter the market without any fear. But make sure, that you research a lot before starting the business. You should do a SWOT analysis, competitor analysis, market research before entering the market. 

Frequently Asked Questions

1. How can I start a paper bag-making business?

Ans. Research the market and develop a hard-hitting business plan. Execute the plan properly. Maintain the quality of the paper bags and use the right strategy to promote your paper bag business. If done properly, this is one of the most profitable businesses in India. As the product has come into existence, only a few years ago.

2. How much amount is required to start a paper bag-making business?

Ans. Like other businesses, the investment depends on the level with which you want to begin. If you want to start a paper bag-making business on the small scale, then you can start with less than INR 10 lakhs. But if you are aiming to start at a bigger level, then you would require more money.

3. What are the business opportunities available in paper bag making?

Ans. Business opportunities include the following-

  • Making paper bags for medical use
  • General-purpose
  • Making paper bags for food items
  • Making paper bags for semi-finished goods

4. List the licenses required to start a paper bag business in India.

Ans. Licenses required to run a paper bag business in India-

  • Trade License
  • Registration for Udyog Aadhar
  • GST Number
  • BIS certificate

5. What are the raw materials required for the business?

Ans. The raw material required includes-

  • Paper Sheets
  • Paper roll colored and white
  • Printing chemicals, ink, etc.
  • Laces and tags
  • Polyester Stereo

6. Why the demand for paper bags is increasing?

Ans. The demand for paper bags is continuously rising because it is an eco-friendly product. Since the government has banned the use of thin plastic bags, people are shifting to paper bags. Almost every business, uses paper bags for selling their products.

7. Is it profitable to start a paper bag business?

Ans. Yes, it is profitable to start a paper bag business as it has come into existence only a few years ago. All you need to do is provide supreme quality bags and you can generate good revenue. Several opportunities are available in the industry. You can expand and produce other related products like paper plates, bowls, etc. Keep an eye on the quality of your products and choose effective strategies.

8. List the types of machines required for a paper bag-making business.

Ans. The machinery required for a paper bag making business include-

  • Testing scale machine
  • Printing machine
  • Lace fitting machine
  • Roll slitter motorized machines
  • Punching machines
  • Bag cutting machine
  • Stereo press and stereo grinder
  • Eyelet fitt
  • ing machine

9. What is the process of manufacturing paper bags?

Ans. Manufacturing paper bags is not difficult. The process is-

  • Cut the paper rolls according to the size of the bag.
  • Press the side of the paper and then paste it with the help of gum.
  • Now print the required content.
  • Punch the bags.
  • Attach strings to your paper bags.
  • After that pack the manufactured bags in the carton.

10. Do I need to hire labor for my business?

Ans. The requirement of labour depends on the size of your business. If you are starting at a bigger level, you would require labour to produce the paper bags.

11. Can I start a paper bag-making business from home?

Ans. Yes, you can start a paper bag making business from home as well. Learn everything about manufacturing from home and then invest wisely. And if it helps you in extracting measurable revenue, then go for expansion. Your profits can fund your expansion.

12. Is it necessary to get a logo designed for your business?

Ans. No, it is not necessary to get a logo. Because most of the businesses choose to get their brand names printed on the carry bags. So, there is no need of having a logo. But you can consider having a logo for the website. It will help in increasing the reputation of your brand.

13. Can I use digital marketing techniques to promote the paper bag business?

Ans. Yes, you can use digital marketing strategies to promote your paper bag business. It is advisable to invest in digital marketing after 2-3 months of starting your business.

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