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How to Start an Oil Mill Business in India – Startup Business Ideas


The oil mill business in India is thriving due to the increased demand for culinary oils, making it a beneficial investment for firms. With a variety of oil commodities like mustard, soybean, and more grown in India, beginning an oil mill firm gives a rich possibility. Entrepreneurs might choose to develop small, medium, or large-scale firms depending on their resources and production potential. Understanding the oil extraction process, selecting proper gear, and acquiring the relevant permissions are essential aspects of creating an oil mill firm. By evaluating the industry, generating a detailed business project report, organising funds, finding a strategic site, and setting up the oil production process, entrepreneurs may build a solid basis for a successful oil mill company in India.

Steps to Start an Oil Mill Business in India

1. Market Analysis

In India, the edible oil market is strong, with a volume of 24.7 million tons in 2023, projected to reach 27.9 million tons by 2032, showing a CAGR of 1.35%. Entrepreneurs should perform market studies to understand demand across different areas and customer interests for oils like sunflower, peanut, mustard, palm, and safflower. Understanding competition and market trends is important for strategic placing in the business. The oil mill business offers a profitable chance due to the rising demand for veggie oils in India, making it an attractive investment for eager businesspeople.

2. Business Planning

Business planning is important for the success of an oil mill business in India. Crafting a detailed business project report helps describe the routine, financial, and strategic parts of the business. Financial planning and spending are crucial to determining initial funding needs, ongoing costs, and income forecasts. Setting realistic goals and targets provides a plan for progress and growth, leading businesses towards measurable success. By carefully planning every part of the oil mill business, from production methods to marketing strategies, owners can reduce risks, optimize resources, and increase the chance of long-term success in the tough Indian market.

3. Location and Setup

When setting up an oil mill business in India, several important factors need consideration. Firstly, picking a suitable site near raw materials and with good transportation access is important for working efficiency. Understanding legal requirements, such as getting necessary licenses and following the laws, is important for a smooth setup process. Additionally, building and setup factors, including access to power and water, play a major role in the running costs of the oil mill business. Entrepreneurs should carefully consider these factors to ensure a good and lasting oil mill company in India.

4. Oil Production Process

The oil extraction method includes grinding seeds to separate oil, which is then packed for sale. Mechanical pressing can remove about 85% of the oil from high-oil content seeds, with chemical extraction used for the leftover oil. The method must match with business needs and product quality requirements.

Selection of Oil Seeds and Quality Control: Choosing the right oil seeds, like mustard, soybean, and more, is important for oil output. Quality control methods ensure the end product meets market standards. Understanding the oil level of seeds and having quality checks throughout the production process is important for uniform quality.

Machinery and Technology Required for Oil Production: Oil mill businesses require gear like expellers, filter presses, heaters, steam kettles, and other equipment for efficient oil extraction. Researching reputable providers is vital to ensure the quality and efficiency of the tools. Proper installation and setting of the tools are key steps in building an effective oil production plant.

Oil extraction involves several steps, and a machine can separate oil from nuts.

  • Seed choosing

The seed must be perfect for removing the oil. If they are your own grown seeds, then look at them before putting them into a machine so that they are not broken.

If you are buying seeds from a store or farmer, make sure that seeds are not broken, or dry, and pick only those seeds which are of good quality.

  • Pre-cleaning and Decortications

Whenever you gather seeds from plants, many types of small rocks, dirt, dust and other small things are also found in the seeds. It is important to do pre-cleaning because the dirt and small rocks will be crushed with seeds, which will weaken the quality of the oil. Therefore, before removing oil from seeds, you’ve to remove these types of items.

After removing stones and dirt, you must also take the straw in the seeds.

You may get these grains cleaned by hand, or you can clean them with the help of a machine.

  • Conditioning of the seeds

This step is important because preparing the seeds takes more oil, and in this process, seeds are put inside the rollers. The seed cells receive the oil by going through the rollers, and micro oil drops are joined in them, due to which the oil can be removed from the seeds easily and fast.

  • Heating

To remove the various bugs, you have to heat the seed. Keep in mind that each seed needs different wet conditions and temperatures.

  • Oil extraction

You have now put seeds into the machine, and the machine grinds them. The oil that comes out of it during grinding is stored in a holding tank.

  • Filtration

Some leftovers are still in the extracted oil. So, after the oil is taken, it is sieved so that it can be fully cleaned. Even after the oil has been cleaned, it still contains various chemical substances, which are removed through a chemical process.

5. Registration and Legalities

To start an edible oil business in India, several crucial steps must be taken to ensure legal compliance and respect for food safety standards. The process includes registering the company unit with the proper government based on its structure, getting important licenses and permits, and ensuring compliance with food safety laws.

Business Registration Process in India:

Obtaining Necessary Licenses and Permits:

  • Acquire FSSAI Basic Registration for turnovers below a set amount and FSSAI State License for bigger turnovers.
  • Obtain BIS Certification to ensure product quality and safety.
  • Secure other permits like Trade Licenses, Fire License, Import-Export License, and NOCs from the Pollution Control Board.

Compliance with Food Safety and Standards:

  • Adhere to FSSAI rules to ensure food safety and quality.
  • Maintain cleanliness standards, use uniform raw materials, and follow set laws.
  • Conduct monthly checks and quality control methods to meet high food safety standards.

6. Operations Management

In the world of oil mill activities, effective management is key to success. Hiring and teaching workers proficient in oil mill technology is important for smooth operations. Providing thorough training ensures that staff are well-equipped to handle tools and stick to safety measures. Establishing an organised day-to-day operating routine is crucial for productivity, covering jobs like seed processing, oil extraction, refining, and packing. Quality assurance measures, including frequent checks and obedience to industry standards like FSSAI laws, are essential to maintain product quality and customer happiness throughout the production process.

7. Marketing and Sales

Developing a thorough marketing strategy for an oil mill business includes key aspects such as making a strategic plan to increase sales and gain a competitive edge. This includes knowing the target market, presenting the company effectively, and utilizing various marketing methods. Branding and product placement play a vital role in distinguishing the business from competitors and building a strong market presence. Implementing digital marketing strategies like SEO, PPC, email marketing, and standard advertising can improve brand exposure and connect with potential buyers effectively. Moreover, utilizing trade shows, displays, and digital marketing can further expand the reach and effect of the marketing efforts.

8. Financial Management

Effective financial management is essential for the financial success of an oil mill business. Managing cash flow and costs effectively ensures the longevity of activities and growth. Implementing suitable price tactics based on market trends and production costs is essential for success. Maintaining correct financial records and dealing with tax laws are vital for openness and legal compliance. By focusing on good financial practices, such as monitoring cash flow, setting reasonable rates, and assuring cautious record-keeping, oil mill businesses may achieve financial stability and long-term success in the industry.


In conclusion, starting an oil mill business in India presents a rich chance for entrepreneurs. Key points covered include market research, business planning, operations management, and marketing tactics important for success. Aspiring businesses are urged to leverage the growing demand for food oils and adopt sound strategies to beat challenges. The future of oil mill companies in India looks bright with the right method and commitment.

Sachin Jaiswal

Sachin Jaiswal B.A.(Hons)! Sachin Jaiswal has been writing material on his own for more than five years. He got his B.A.(Hons) in English from the well-known University of Delhi. His success in this job is due to the fact that he loves writing and making material that is interesting. He has worked with a lot of different clients in many different fields, always giving them high-quality content that their target audience will enjoy. Through his education and work experience, he is able to produce high-quality content that meets his clients' needs.