Mushroom Farming in India – Profit Calculation, Project Cost, Market Analysis, and Business Plan

mushroom farming business in India

Are you an aspiring entrepreneur seeking an innovative business idea? Look no further than mushroom farming! With its increasing demand, low investment costs, and high-profit potential, mushroom farming has emerged as a lucrative venture in India. This article serves as your go-to guide on how to start a successful mushroom-farming business in the Indian market. Let’s explore the fascinating world of mushrooms and uncover the secrets to turning it into a profitable endeavour.

Understanding the Indian Mushroom Market:

India, with its diverse climate and agricultural potential, provides a fertile ground for mushroom cultivation. As the second-largest producer of mushrooms globally, the country offers immense opportunities for entrepreneurs. The mushroom market in India is booming, especially in urban areas, where health-conscious individuals seek fresh and organic produce. This rapidly growing market promises substantial profits for those venturing into the mushroom farming business.

Getting Started: The Basics of Mushroom Farming

Choosing the Right Mushroom Variety:

Before embarking on your mushroom farming journey, it’s essential to select the right mushroom variety. In India, the most popular and commercially viable mushroom variety is the button mushroom (Agaricus bisporus). Its versatility, robust demand, and ease of cultivation make it an ideal choice for beginners.

Two most popular mushrooms types in India
left: White button mushroom, Right: White oyster mushroom

Understanding the Cultivation Process:

Mushroom farming requires a controlled environment with proper temperature, humidity, and ventilation. You can opt for either traditional farming methods or advanced techniques such as the use of grow bags or tunnels. Conduct thorough research and consider attending workshops or seeking guidance from experienced mushroom farmers to learn the best practices.

Cost Analysis and Financial Planning:

To make informed business decisions, it is crucial to estimate the project cost and expected returns. While the initial investment varies based on scale and infrastructure, mushroom farming is relatively cost-effective. A small-scale mushroom farm at home can be established with minimal investment. On average, the project cost ranges from a minimum of INR 1,50,000 to 5,00,000, including the expenses for raw materials, infrastructure setup, and spawn procurement.

Mushroom Farming rack

Profitability and Revenue Generation:

The profitability of mushroom farming in India depends on various factors, such as market demand, production volume, and cost management. On average, a well-managed mushroom farm can yield profits ranging from INR 40,000 to 80,000 per acre per crop cycle. However, it is essential to note that profitability may vary based on the quality of produce, marketing strategies, and market fluctuations.

Formulating a Business Plan:

To ensure the success of your mushroom farming business, it is imperative to develop a robust business plan. Consider the following elements while formulating your plan:

Market Research and Analysis:

Identify your target audience, analyze market trends, and understand the competition. Explore local marketplaces, restaurants, hotels, and organic stores to establish potential partnerships and distribution channels.

Marketing and Sales Strategy:

Craft a comprehensive marketing and sales strategy to promote your mushroom produce. Leverage digital platforms, create an online presence, and collaborate with local food influencers. Educate consumers about the health benefits and culinary uses of mushrooms to stimulate demand.

Operational and Financial Management:

Define your operational processes, including sourcing of raw materials, cultivation techniques, and quality control measures. Implement efficient inventory management and cost optimization strategies to maximize profitability.

Government Schemes and Subsidies for Mushroom Farming in India

National Bank for Agriculture and Rural Development (NABARD):

NABARD provides credit facilities and loans to farmers for mushroom farming. The loan amount and interest rates may vary depending on the project’s scale and the borrower’s eligibility.

National Horticulture Mission (NHM):

The financial assistance provided under NHM for mushroom farming can vary, but it typically ranges from 40% to 60% of the total project cost.

Rashtriya Krishi Vikas Yojana (RKVY):

The subsidy or financial assistance available under RKVY for mushroom cultivation can vary based on the project cost and location. Generally, subsidies of up to 50% of the total project cost may be provided.

National Agriculture Development Scheme (NADS):

NADS offers subsidies for various inputs required in mushroom farming, such as mushroom spawn, compost, and organic inputs. The subsidy rates can range from 25% to 50% of the cost of the inputs.

National Small Industries Corporation (NSIC) Scheme:

The NSIC scheme primarily focuses on providing technical support and training rather than direct financial assistance. The exact figures for this scheme may vary.

It’s important to note that these figures are indicative and subject to change. The specific subsidy amount or figures for each scheme can be obtained by contacting the relevant government departments, agricultural extension offices, or financial institutions offering these schemes.


Starting a mushroom farming business in India presents a promising opportunity for aspiring entrepreneurs. With a growing market, low investment costs, and attractive profit margins, this venture has the potential to yield significant returns. By adhering to proper cultivation techniques, conducting thorough market research, and formulating a comprehensive business plan, you can embark on a successful journey in the mushroom farming industry. Remember, dedication, perseverance


How much profit can one expect in mushroom farming in India?

Profitability in mushroom farming can vary depending on factors such as market demand, production volume, and cost management. On average, a well-managed mushroom farm can yield profits ranging from INR 40,000 to 80,000 per acre per crop cycle.

Can mushroom farming be done at home?

Yes, mushroom farming can be done at home with minimal infrastructure and investment. It is an excellent option for individuals looking to start a small-scale business from the comfort of their homes.

What is the estimated project cost for mushroom farming?

The project cost for mushroom farming in India varies based on the scale and infrastructure. On average, the initial investment ranges from INR 50,000 to 2,00,000, which includes expenses for raw materials, infrastructure setup, and spawn procurement.

Which is the biggest mushroom market in India?

The biggest mushroom market in India is primarily concentrated in urban areas, especially in metropolitan cities. These areas have a high demand for fresh and organic produce, making them ideal for mushroom farmers to target.

What is the profit per acre in mushroom farming in India?

The profit per acre in mushroom farming in India can range from INR 40,000 to 80,000 per crop cycle, depending on various factors such as quality of produce, marketing strategies, and market fluctuations.