Onion Dehydration Business: Cost, Subsidy & Risks (2026)
The basic Onion Dehydration Unit (500 kg onion/day) costs ₹30 lakh. A plant to make onion flakes and powder. 35% subsidy, max ₹10 lakh (PMFME) — up to ₹10 lakh supp
The basic Onion Dehydration Unit (500 kg onion/day) costs ₹30 lakh. A plant to make onion flakes and powder. 35% subsidy, max ₹10 lakh (PMFME) — up to ₹10 lakh support; your share is about ₹3 lakh. At the report's prices this unit is still in loss in year 3 — don't start without changes.
01Where will the money come from?
Total cost ₹30 lakh
From your pocket only ₹3 lakh — the subsidy is credited to your loan account.
What does the money go into?
- Building/civil₹2 lakh
- Machinery₹20 lakh
- Other/remaining cost₹8 lakh
02Income or loss?
Profit depends on these 3 things
- Raw material/input prices in your district
- At what price and to whom you will sell
- How many days a year and at what capacity the unit runs
035 steps to start
- Get trainedLearn the work, find buyers
- Prepare the siteShed/room, power, water
- Get a DPR madeProject report as the bank needs it
- Apply for loan + subsidy35% subsidy, max ₹10 lakh (PMFME)
- Produce and sellAfter fixing numbers with your prices
04Who is it right for?
053 mistakes that cause losses
06Machines and items you need
The basic onion dehydration unit needs these items. Total cost is ₹30 lakh — building/civil ₹2 lakh, machinery ₹20 lakh and working capital ₹0 thousand.
| Item | What it is for |
|---|---|
| Onion peeling and washing machine | Removes skin and soil |
| Slicer | Even 3–5 mm slices |
| Dryer (tray or belt) | Dries to 5–6% moisture — the costliest machine |
| Pulveriser and sieve | Powder and grades (flakes/kibbled) |
| Packing machine | Moisture-proof packs |
| Weighing scale and moisture meter | Quality checks |
| Shed / building | Clean, dry, pest-free space |
Before the DPR, take fresh quotations from 2–3 suppliers — the bank asks for them.
07How the work is done — from start to sale
- Raw material: High-solids (TSS) white onion works best — buy cheap in season.
- Peel and wash: Remove skin, roots and soil.
- Slice: 3–5 mm slices.
- Dry: In the dryer to 5–6% moisture.
- Grade: Separate flakes, kibbled, granules and powder.
- Pack: In moisture-proof packs straight away.
- Sell: Send samples to companies and exporters to get orders.
08Monthly view (year 3)
Yearly figures divided by 12, so you can see what comes in and goes out each month.
| Item | Per month |
|---|---|
| SalesMonthly average | ₹3.6 lakh |
| Total costRaw material, labour, power, interest and depreciation | ₹5.5 lakh |
| Net profitSales − total cost | Loss ₹2 lakh |
| Loan instalment (EMI)₹17 lakh loan, 11% interest, 6 years (after 1-year moratorium) | ₹32,358 |
09What if things change? (year-3 profit)
| Situation | Yearly profit |
|---|---|
| As estimated | Loss ₹23.6 lakh |
| Selling price 10% lower | Loss ₹27.9 lakh |
| Selling price 20% lower | Loss ₹32.2 lakh |
| Selling price 10% higher | Loss ₹19.3 lakh |
| Costs 10% higher | Loss ₹30.3 lakh |
Costs are kept the same when price changes. The biggest risk is the selling price — fix buyers and prices first.
10Where to sell?
- Spice companies — Powder and granules.
- Noodle, soup and ready-to-eat makers — Flakes and kibbled.
- Hotels and catering — The same onion all year.
- Exporters — The biggest market — quality certificates needed.
- Online / retail packs — Your own brand in small packs.
11Frequently asked questions
Why does this model show a loss?
At the government report's prices, onion and drying costs are higher than the selling price. You need cheap season onions and a confirmed buyer.
What government support is there for the Onion Dehydration Unit?
35% of eligible cost (machinery, technical civil work), max ₹10 lakh; linked to a bank loan, not on working capital.
Should I start this unit?
The numbers show a loss. Go ahead only if you have cheap raw material, a fixed buyer or your own brand.
Is onion dehydration profitable?
Our numbers show the basic unit at a loss (year 3: Loss ₹23.6 lakh). Profit depends on cheap raw material, good recovery and confirmed buyers — check prices first, then take a loan.
What about a small solar dryer unit?
A small solar dryer starts at low cost, but it has no government DPR — its numbers are estimates only. We can work out both options for your budget.
Where can I get an onion dehydration project report PDF?
See the bank-ready DPR: Onion dehydration project report (DPR) →
Cost, machines, licences, subsidy and bank-loan steps — in one PDF, on WhatsApp.
This pack has: Onion Dehydration · Fried Onion & Paste · Warehouse (Godown)
After payment, the PDF comes to the same WhatsApp number.
Onion Dehydration Unit — Want to start?
Tell us your district and budget — an expert will suggest the next step for free.
Chat on WhatsApp+91 85305 77758Full details →Learn first: ₹99 masterclass · Instagram · Facebook · YouTube
Last checked: 01-10-2026. Figures are based on government model reports and are indicative; get fresh quotes and local prices before the DPR. The bank decides the loan/subsidy — we help you prepare. Depends on the scheme continuing.
Utkrishi Team
Utkrishi – एग्री बिज़नेस, DPR, सब्सिडी और बैंक लोन में मदद। WhatsApp +91 90961 12806 · कॉल +91 85305 77758