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Top 8 Best Small Business Ideas for Rural & Village Areas in India

Published on Mar 25, 2022Updated on Oct 20, 2023

Top 8 Best Small Business Ideas for Rural & Village Areas in India

India as a country has progressed significantly over the years ever since attaining Independence. It is rightfully made a place in the top countries with excellence in various industries and domains. Many industries have grown and developed which has drastically impacted India’s GDP that plays a vital role in driving the economy. Adding to that, nearly 65.07% of India falls under the rural area and still contributes to the GDP by running small businesses across industries. 

The government of India is acknowledging and uplifting the entrepreneurial spirit that boosts technical as well as financial independence in rural regions. Atma Nirbhar Bharat is backed by the government which increases self-sufficiency and allows people in villages to boost their skills and encourages them to become self-driven entrepreneurs. There are several rural business ideas that can be considered to increase job creation. This article discusses the top 8 business ideas for small businesses in rural areas mentioned below: 

8 Small Business Ideas for Rural & Village Areas:

1. Retail Business 

With rural areas having a large sum of population, the demand for essential goods is always high. This demand can be met by sourcing goods from cities or factories in tier-two cities and making it available in villages. The demand is high, and supply is relatively low. Hence, having retail outlets in these areas can be a good, small investment, potential business idea. This can be as simple as opening a kirana shop. 

2. Manufacturing Unit

There are many monetary benefits to setting up a manufacturing unit in villages. This idea can be initiated with low investment in rural areas rather than in tier-two cities. One can set up a small manufacturing unit in the rural areas to manufacture goods like incense sticks (agarbatti), candles, cotton buds, matchboxes, packaging products, disposable cups and plates, pickles, and jute bags. Villages are an ideal location to set up manufacturing units as goods can be supplied to nearby towns or cities at a higher price to incur more profits. In manufacturing, the opportunity is countless as one can manufacture many products from the same sourced raw material—for example, cotton balls and cotton pads.

3. Auto-Repair Business

Automobiles are not just constrained to cities but are largely a part of daily commutes in rural villages. However, people in rural areas still have to go to nearby cities for servicing and repair of their vehicles. This creates a big business idea in rural villages. This business idea can be considered successful as the competition is nearly zero. This will not only bring customers from the village but also nearby villages. 

4. Selling Farmers Yields in Cities 

There are many farmers in villages who sell their products to distributors on a large scale. These distributors purchase the products from the farmers and pay them the lowest negligible amount of money and further resell the same produce at high prices in nearby cities/towns. Therefore, the farmers often make very little money. But if you (entrepreneur) sell their yield, then the farmers get a reasonable market price for all their yield, and they do not have to take out loans in order to sustain themselves or their work. Since the product will be directly sourced from farms, you will get your hands on high-quality products that can be sold at higher rates in cities and can incur profit.

5. Flour Mill

Setting up flour mills in rural areas is a good idea, as the demand will always be rising, especially with most Indians being round-the-year consumers.  It is a good best small business idea for villages and you can also supply the end-product to neighboring villages to make more profits.

6. Threshing Machine 

It is profitable to buy a tractor that comes with drilling and threshing equipment. As not all farmers have threshing machines of their own, they rent the equipment and you can be the person giving them on rent. This equipment is useful in every harvest season and hence, can be a profitable small-scale business in villages. 

7. Medical Store

People in rural areas go to cities to source medicines that are not very common. It is good to start a medical shop offering all the possible medicines. You will need to tie up with a supplier in the city to get a regular supply. Besides, you can place orders on just in time basis with your supplier for medicines that you don’t stock due to low demand. This can be a lucrative small business idea.

8. Tutoring Service 

Every student doesn’t go to the city for exams preparations. There is a significant number who stay back and prepare by themselves. This is where you can come in as there are many qualified and skilled teachers in villages, and you can start a coaching institute and hire more teachers generating employment opportunities.


Thus, there are a large number of options available for those interested in starting a small business in our country. If you have an existing business and need funding to expand, or working capital, you can apply for a business loan with SMFG India Credit. SMFG India Credit provides eligible borrowers with unsecured business loans upto INR 75 Lakhs* at attractive interest rates. Apply now to know more!

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