Starting a 20-Litre Water Can Business: BIS and FSSAI Licences, Investment and Per-Can Profit Worked Out
Every street in Tamil Nadu has a water can on someone's doorstep, and around 1,500 licensed units across the state fill them. It looks like a simple business: purify water, fill cans, deliver. In practice it is a regulated food-manufacturing unit with a laboratory, where profit depends on how many cans you sell each day and how many come back.
- 400 cans a day₹8,000
- 500 cans a day₹50,000
- 600 cans a day₹92,000
- 800 cans a day₹1,76,000
In this guide
Quick answer
- BIS first, then FSSAI: packaged drinking water can be sold only under the BIS mark (IS 14543); no FSSAI manufacturing licence without it.
- A real lab is required: in-house testing of every batch with qualified staff.
- Investment: our 2,000 L/hour example is about ₹35 lakh, excluding land and building purchase.
- Per-can math: about ₹25 earned, ₹11 spent, leaving about ₹14 a can.
- Break-even: about 380 cans a day; at 600 cans about ₹92,000 a month before tax.
- GST is 5% on 20-litre cans since September 2025.
- Key risks: price-cutting by unlicensed units, can losses, groundwater permission and input cost spikes.
Packaged drinking water in 20-litre cans has become essential in Tamil Nadu: an estimated 15 lakh consumers depend on them and roughly 1,500 units make them. The demand is real and daily. But the business sits under food-safety law, with a laboratory, inspections and strict labelling, and many small units have shut because the numbers did not add up. Here is what it takes and where the money comes from.
How a water can unit earns
The product is cheap, so the business is about volume and repeat delivery:
- Sales channels: shops and distributors buy cans at a low factory price; homes, offices and hostels pay more for doorstep delivery.
- Returnable cans: each can makes many trips. Cans that are lost, damaged or kept by customers are a direct cost.
- Route density: delivering many cans in one area costs far less per can than scattered deliveries.
In March 2026, can prices in many places in Tamil Nadu rose from about ₹20 to ₹25 after the price of plastic raw material, cans and caps jumped. Input costs can move quickly, and passing them on is hard in a competitive local market.
Licences and approvals
- BIS certification (IS 14543): the starting point. FSSAI regulations prohibit the sale of packaged drinking water except under the BIS certification mark, and FSSAI has stated that no licence can be obtained without the BIS certificate.
- FSSAI licence for manufacturing, after BIS.
- Groundwater permission if you draw from a borewell. In Tamil Nadu the Water Resources Department issues extraction NOCs and said in 2026 it would move the process online. Over-exploited areas are restricted.
- Pollution control consent from the Tamil Nadu Pollution Control Board, which also covers RO reject water disposal.
- Local body trade licence, factory and labour registrations as applicable.
- GST registration once turnover crosses the threshold.
- Legal Metrology packaged commodity registration for labelling and net quantity.
Confirm the current list and fees with a consultant who has handled BIS cases, because BIS inspects the factory before granting a licence.
What BIS requires inside the factory
The BIS product manual for IS 14543 (revised July 2025) sets out what an approved unit must have:
- In-house laboratory with calibrated equipment and testing staff who are graduates in chemistry, microbiology, biotechnology or food technology.
- Tests on every batch: E. coli, coliforms and other microbes, plus colour, odour, taste, turbidity, TDS, chloride, sulphate, alkalinity and residual chlorine.
- pH every four hours, more chemical tests weekly and monthly, heavy metals and others every six months, pesticides yearly. Some can be sent to outside labs.
- Containers: plastic jars must meet IS 15410. Soiled, deformed or damaged returnable jars must not be reused.
- Labelling: the BIS mark (at least 15 mm high on reusable jars), brand, batch number, manufacturing and expiry dates, treatment used, net quantity and "keep away from direct sunlight".
A worked example: one plant, one month
Our own illustrative assumptions for a unit in a Tamil Nadu town making only 20-litre cans:
| Investment item | ₹ lakh |
|---|---|
| RO, UV/ozone, washing and filling machinery (2,000 L/hour) | 12.0 |
| In-house laboratory | 3.0 |
| Shed civil works and food-grade flooring (rented building) | 4.0 |
| Borewell, raw and treated water storage | 2.0 |
| 2,500 cans at about ₹220 each | 5.5 |
| Used delivery vehicle | 4.5 |
| BIS, FSSAI and other licences, consultancy | 2.0 |
| Working capital | 2.0 |
| Total | 35.0 |
Sales: 600 cans a day; 60% to shops at ₹18 and 40% delivered to homes and offices at ₹35, so about ₹25 a can on average (excluding GST).
Variable cost per can (about ₹11): power ₹1.50; cap, seal and label ₹2.50; washing ₹0.50; can wear and loss ₹4.40 (a ₹220 can lasting about 50 trips); delivery fuel ₹2.
| Line | Per month (₹) |
|---|---|
| Sales (600 × ₹25 × 30) | 4,50,000 |
| Variable costs (600 × ₹11 × 30) | −1,98,000 |
| Rent | −25,000 |
| Staff: chemist, four plant workers, two delivery staff | −98,000 |
| Membranes, filters, maintenance | −10,000 |
| BIS fees, outside lab tests, renewals | −10,000 |
| Vehicle upkeep | −8,000 |
| Sundries | −9,000 |
| Profit before tax | 92,000 |
That recovers ₹35 lakh in a little over 3 years if sales hold. The chart above shows how sensitive it is: at 400 cans a day the unit only just covers costs; at 800 cans profit nearly doubles. With about ₹14 left per can and ₹1.6 lakh of fixed costs, the break-even is about 380 cans a day.
Can losses are the silent profit-killer. If cans last 25 trips instead of 50, the can cost per trip doubles to ₹8.80 and monthly profit drops by about ₹79,000. Take a refundable deposit on every can you place with a household or office, and count cans every week.
Plus points
- Daily, recession-proof demand, especially in towns with hard or unsafe tap water.
- Repeat customers: a household that likes your service orders every few days.
- Simple product with a mature, well-documented process.
- GST is only 5% on 20-litre cans since September 2025, and input tax credit is available on supplies.
- Room to add 1-litre bottles, office dispensers and event supply once the base is steady.
Minus points
- Heavy compliance: BIS, FSSAI, an in-house lab and regular inspections; a failed test can stop production.
- Price competition from unlicensed units that skip testing and undercut licensed ones.
- Can losses and returns that are hard to control.
- Groundwater risk: permission can be restricted, and the state has sealed hundreds of units for illegal extraction.
- RO reject water: RO systems discard a significant share of the input water, which must be handled responsibly.
- Input cost shocks: plastic, can and cap prices rose sharply in 2026.
- Delivery is labour-intensive, and late deliveries lose customers quickly.
Five checks before you invest
- Test your borewell water and confirm the groundwater status of your block before choosing a site.
- Count the licensed units within 10 km and what they charge shops and homes.
- Line up at least 200 cans a day of committed buyers (offices, hostels, shops) before you buy machinery.
- Budget for a qualified chemist from day one; BIS will check.
- Plan delivery routes so most cans go to a few dense areas.
Final word
A water can unit is a dependable business for someone who treats it as food manufacturing, not as a side activity: licensed, tested every batch, with tight control over cans and delivery routes. The profit is in volume, so secure your first few hundred cans a day of demand before you invest, and stay fully compliant; that is the one advantage unlicensed competitors cannot copy.
This guide is general information, not legal, tax or investment advice. Licence requirements, BIS fees, GST rates, groundwater rules and input prices change, and the worked example uses our own assumptions. Confirm the current requirements with BIS, FSSAI, the Water Resources Department and a chartered accountant before investing.
References
- BIS: Product manual for packaged drinking water, IS 14543 (July 2025 revision)
- Food Safety Helpline: FSSAI on BIS certification for packaged drinking water
- TaxGarden: GST for packaged drinking water plant owners, AY 2026-27
- IBTimes: Packaged water prices climb in Tamil Nadu, March 2026
- Outlook: TN Water Resources Department to move groundwater NOC process online
- DT Next: Madras High Court on illegal packaged water units
How we made this guide
- Facts checked against 6 sources, listed at the end of the guide.
- Worked examples and calculations are our own, with the assumptions stated in the guide.
- Last updated November 3, 2026. We revise guides when rules and prices change.
Frequently asked questions
Is a BIS licence mandatory for a water can business?
Yes. Packaged drinking water can be made and sold only under the BIS certification mark to IS 14543, and FSSAI has stated that a manufacturing licence cannot be obtained without the BIS certificate. So BIS certification comes first, then the FSSAI licence.
How much investment is needed to start a water can plant?
It depends on capacity and how much you own. Our example of a 2,000 litres-per-hour unit for 20-litre cans comes to about ₹35 lakh: purification and filling machinery, an in-house laboratory, the shed, borewell and storage, an initial stock of cans, a delivery vehicle, licences and working capital. Land or building purchase would be extra.
What is the profit per 20-litre water can?
In our example, a can earns ₹25 on average and costs about ₹11 in power, caps, seals, labels, washing, can wear and delivery fuel, leaving about ₹14. Fixed costs of ₹1.6 lakh a month must be covered first, so the unit breaks even at about 380 cans a day and makes about ₹92,000 a month at 600 cans.
What GST applies to 20-litre water cans?
Since 22 September 2025, packaged drinking water in 20-litre jars is taxed at 5% GST, down from 12%. Smaller bottles also moved to 5%. Registration is required once turnover crosses ₹40 lakh for goods in Tamil Nadu, or ₹20 lakh if you also earn service income such as dispenser rentals.
Do water can units need groundwater permission in Tamil Nadu?
Units drawing groundwater need permission from the state, and Tamil Nadu has sealed hundreds of units for illegal extraction in the past. The Water Resources Department handles groundwater extraction NOCs and announced in 2026 that it is moving the process online. Check the status of your area's groundwater block before choosing a site.
What tests must a packaged drinking water unit do?
The BIS product manual requires an in-house laboratory with qualified staff. Microbiological and basic chemical tests are done on every control unit (batch), pH every four hours, and further chemical tests weekly, monthly, six-monthly and yearly, some of which may be sent to outside labs.