INTRODUCTION

The packaged drinking water industry in India has seen tremendous growth in recent years, driven by rising health awareness and demand for safe drinking water. What was once a luxury has become a daily necessity, with the market expected to reach around ₹403 billion by 2026. This boom presents a lucrative opportunity for entrepreneurs, but entering this industry requires careful navigation of legal and regulatory requirements. From choosing the right business structure to obtaining a host of approvals and licenses, compliance is key to starting and running a successful bottled water venture. In this guide, we break down everything you need to start a packaged drinking water business in India – including business incorporation, necessary government approvals, required licenses and why each is important. We’ll also explain how a professional firm like Lawfinity can assist you and answer frequently asked questions to address common client concerns.

By the end, you will have a clear roadmap of the steps involved in launching your own packaged drinking water brand, with all the due diligence and legal compliance in place.

CHOOSING THE RIGHT BUSINESS STRUCTURE

Choosing the correct business structure is critical when starting a packaged drinking water business. Each structure offers different benefits depending on the scale of operation, capital investment, ownership and compliance requirements. Below are the most commonly used business structures in India for this industry:

• Sole Proprietorship: Ideal for individuals starting a small-scale bottled water venture with limited operations. It is easy to register and operate, but the owner is personally liable for all business debts and legal matters. It lacks scalability and has limited credibility when dealing with institutions or government bodies.
• Partnership Firm: Suitable when two or more people want to start a business together. It is governed by the Indian Partnership Act, 1932 and requires a simple partnership deed. Like proprietorship, it carries unlimited liability and disputes among partners may lead to operational issues. Better suited for small to medium local businesses.
• Limited Liability Partnership (LLP): Best for medium-sized businesses that need a flexible partnership structure with limited liability protection. LLPs are governed by the LLP Act, 2008 and offer credibility with moderate compliance. Profits are taxed in the hands of partners and it is preferred by professionals and family-run businesses.
• Private Limited Company: This is the most suitable structure for medium to large-scale packaged drinking water businesses. It offers limited liability, a separate legal identity, better funding options and scalability. Private limited companies are governed by the Companies Act, 2013 and are preferred by serious entrepreneurs and investors due to their formal structure and regulatory transparency.
• One Person Company (OPC): Ideal for solo entrepreneurs who want the benefits of a private limited company but without involving other shareholders. OPCs offer limited liability and legal identity but are restricted in terms of funding and expansion. Suitable only for small operations.

Which structure is the best? For long-term growth, legal safety and ease of obtaining licenses and funding, the Private Limited Company is the most recommended business structure for this industry. It provides the right balance of credibility, limited liability and investor friendliness—especially important in a health-sensitive sector like packaged drinking water.

NECESSARY APPROVALS AND CLEARANCES

Before you can begin production, several government approvals and clearances must be obtained. These ensure your plant is legally compliant, environmentally sound and safe for producing drinking water. Below is a breakdown of the key approvals required:

• Business Incorporation and Registration: Register your business formally. For a company or LLP, get incorporation from MCA with legal documents. Proprietorships/partnerships may register under state laws or MSME/Udyam. Registration is essential for obtaining licenses, contracts and opening bank accounts.
• Land and Building Approvals: Secure industrial-use land with proper ownership or lease documents. Obtain land-use conversion (if needed), building plan approval and local body NOC (like Gram Panchayat) to avoid zoning disputes and ensure structural compliance.
• Environmental Clearance and Pollution Control Board NOC: Get Pollution Control Board’s Consent to Establish and Consent to Operate. Submit plans for waste, noise, emissions and treatment. Approval ensures compliance and avoids penalties. Boiler/generator setups must also meet air pollution norms.
• Groundwater Extraction Permission (CGWA NOC): If using a borewell, obtain NOC from CGWA or state authority. Submit hydro-geological reports and install meters/recharge pits. Illegal groundwater use invites fines or shutdown. Check your location’s extraction eligibility early on.
• Quality and Hygiene Compliance Approvals: Because this business directly deals with drinking water, maintaining high quality and sanitation standards at your plant is paramount. Regulators will expect several measures and certifications on this front:
  • Water Testing: Obtain water test reports from NABL-accredited labs for both raw and treated water. These tests confirm potability and are often required for licenses like BIS or FSSAI. Regular testing ensures safety and compliance.
  • In-House Lab & Personnel: Maintain a basic in-house lab with a chemist and microbiologist for routine water testing. Even if BIS is not sought, quality control ensures safe water. Inspectors may verify staff qualifications and testing procedures.
  • Sanitation and Pest Control: Keep the plant hygienic with regular pest control and proper segregation of raw, processing and packaging areas. Pest control certification and treatment records help prevent contamination and ensure regulatory compliance.
  • Worker Health and Safety: Ensure all workers are medically fit with health certificates. Train staff in hygiene practices and provide safety gear like gloves and masks. Health records may be checked during inspections to prevent contamination risks.
• Electrical and Fire Safety Approvals: Obtain sanctioned electricity load and commercial connection for running plant machinery. Ensure wiring meets safety norms; backup generators may need pollution consent. Fire NOC may be required depending on plant size, involving fire safety systems and inspections. These are vital for Factory License and building safety compliance.
• Local Municipal Approvals: If located in urban areas, get a trade license from the municipal body. Some states require Shops & Establishments registration for the office. Additional health inspections may apply. Always verify with local authorities to avoid civic issues after setup, especially when selling in local markets.

Required Licenses and Registrations

To legally manufacture and sell packaged drinking water in India, obtaining certain licenses/registrations is mandatory. Below we discuss each required license in 3–4 sentences, including why it’s needed:

• FSSAI License (Food Safety License): Required for all food businesses, including bottled water. A Central FSSAI License is needed for large-scale or multi-state operations. It ensures compliance with hygiene and safety standards. Recent classification as “High Risk” means stricter inspections. Operating without it risks heavy penalties or closure. It’s essential and non-negotiable.
• BIS ISI Certification: Though optional since October 2024, BIS ISI certification (IS 14543/13428) signals quality. It involves rigorous plant audits and water testing. Trusted by consumers and institutional buyers, it offers a competitive edge. Misuse of the ISI mark is punishable. Highly recommended if targeting exports or brand credibility.
• Local Trade License: Issued by municipal authorities, this permits legal operation within city limits. It ensures compliance with local zoning, sanitation and safety norms. Required before starting operations and often linked to fire/environmental clearances. Usually renewable annually. Absence can lead to plant closure or municipal penalties. Apply once plant setup is complete.
• GST Registration: Mandatory once turnover exceeds ₹40 lakh. It allows you to collect GST and claim input tax credits. Required for invoicing, B2B sales and most supplier transactions. Registration provides a GSTIN and mandates regular tax filings. Early registration is smart to avoid delays in procurement and commercial operations.
• Factory License under the Factories Act: Required if you employ 10+ workers with power. Ensures compliance with worker safety, hygiene and welfare rules. Issued by the state labour department after inspection of layouts and machinery. Annual renewal required. Essential for legal factory operations and protecting your workforce. Scale-up plans should factor this in early.
• Employee Registrations (ESI/PF): ESI is mandatory for 10+ employees; PF for 20+. These provide health insurance and retirement benefits. Registration avoids legal penalties and supports workforce retention. Even with contract workers, you may cross thresholds. Monthly contributions and records are mandatory post-registration. Plan ahead if expecting workforce expansion.
• Trademark Registration: Not mandatory but strongly advised to protect your brand usage rights and enhances brand credibility. Crucial if scaling nationally. Lawfinity can assist. Avoid legal disputes and brand dilution by acting early on trademark protection. from copycats. Register your name and logo under the Trademarks Act. It secures exclusive
• MSME/Udyam Registration: Optional but beneficial. Grants access to loans, subsidies and priority in tenders. Applicable to units classified by investment and turnover. Registration is easy and online. Helps reduce operating costs and gain government support. Smart move for long-term financial planning and competitiveness, especially for small-to-medium bottled water businesses.
• Legal Metrology Registration and Labelling Compliance:Mandatory for all packaged goods. Labels must show volume, MRP, dates, contact, etc. Some states require registration as a packer. Inspections check label accuracy and volume compliance. Non-compliance leads to fines. Design labels carefully to meet both FSSAI and Metrology rules. Consult experts to ensure end-to-end compliance.

WHY THESE APPROVALS AND LICENSES ARE NEEDED

You might wonder, why go through all this hassle of obtaining multiple approvals and licenses? The simple answer is that these requirements exist to ensure your business operates safely, legally and sustainably, protecting not just you but also consumers and the public. Here are the key reasons why each category of approval/license is needed:

• Legal Compliance and Avoidance of Penalties: Running a packaged water business without licenses like FSSAI or BIS can result in raids, heavy fines or imprisonment. Compliance avoids legal risks and shutdowns, enabling smooth, worry-free operations. Investing in approvals now protects your business from future disruptions or prosecution.
• Public Health and Safety: Licenses like FSSAI and Pollution NOC ensure your water is safe for consumers and your operations don’t harm the environment or workers. Regular audits help maintain high standards. These approvals protect public health and reflect your commitment to safety and hygiene across operations.
• Quality Assurance and Brand Trust: Certifications like FSSAI and BIS build customer trust and act as proof of quality. Institutional buyers demand valid licenses before onboarding. Proper compliance distinguishes you from unreliable sellers and helps build a reputable, trustworthy brand in a competitive bottled water market.
• Smooth Operations and Growth: Licenses are essential for bank loans, vendor tie-ups, investor interest and uninterrupted operations. Missing approvals can halt production and hurt expansion plans. With proper compliance, you ensure continuity, adaptability to regulatory changes and a strong foundation for scaling and diversifying your business.
• Ethical and Social Responsibility: Compliance shows you respect the law, protect natural resources and care for worker welfare. It enhances your social image and consumer goodwill. Responsible operations backed by licenses can even be marketed, while non-compliance can destroy brand reputation overnight.

HOW LAWFINITY CAN HELP YOU ESTABLISH YOUR BUSINESS

Lawfinity simplifies the legal journey for new entrepreneurs by offering end-to-end support with registrations, approvals and licenses—making it your one-stop solution for launching a packaged drinking water business:

• Expert Consultation on Business Structure: Lawfinity helps you choose the right business structure—be it proprietorship, LLP or Private Limited—based on your goals. We handle end-to-end incorporation, including DSCs, DINs, MCA filings and drafting legal documents like MoA, AoA or partnership deeds to ensure a smooth and compliant setup.
• End-to-End Licensing Support: Lawfinity prides itself on providing end-to-end support for regulatory licensing. We will prepare and file the applications for all necessary licenses on your behalf, liaising with the various government departments so you don’t have to run from pillar to post. This includes:
  • FSSAI License Application: Lawfinity assists with filling the FSSAI application on FoSCoS, choosing between state or central license, preparing required documents and coordinating inspections. We handle all follow-ups to ensure timely license issuance.
  • BIS ISI Certification Process: We guide you through the 7-step BIS ISI certification process, help set up in-house labs, ensure documentation aligns with IS 14543 standards and coordinate audits—making certification smoother and quicker.
  • Environmental and Groundwater Clearances: Lawfinity helps secure Pollution Control Board and CGWA NOCs by preparing necessary reports, filing applications and meeting environmental conditions like rainwater harvesting or recycling systems for speedy and compliant approvals.
  • Trade License and Local Approvals: Our team manages trade license applications, shop registration and coordinates with municipal, police and fire departments for required NOCs—ensuring your plant complies with all local regulations.
  • GST and Tax Registrations: We handle GST registration, PAN/TAN applications and initial accounting setup for timely tax compliance. Our team ensures you're fully ready for tax filings from day one.
  • Labour Law Compliance: Lawfinity registers your entity for EPF, ESI and Factory License if required. We also help maintain labour law records like wage registers and muster rolls to ensure full legal compliance.
  • Trademark Registration: Our IP experts conduct a name/logo search and file your trademark application to protect your brand legally, allowing you to focus on growing your water business without risk of duplication.
• Documentation and Advisory: Lawfinity drafts contracts, vendor agreements and labelling content while maintaining all compliance records. We act as your legal counsel, advising on notices or audits and keeping you updated on legal changes like FSSAI guidelines—ensuring your paperwork stays accurate, timely and legally sound.
• Time and Hassle Savings: We handle all regulatory procedures, from form submissions to inspections, saving you time and reducing delays. Lawfinity frees you to focus on operations while we manage government follow-ups, avoiding costly errors and fast-tracking approvals through complete, error-free applications.
• Post-Incorporation Support: Lawfinity remains your compliance partner even after setup—renewing licenses, handling expansions or managing legal queries and audits. Whether it's yearly renewals or cross-state growth, we ensure your business stays compliant and legally protected at all stages.

Lawfinity simplifies the setup of your packaged water business—from incorporation to final licenses. With deep expertise in business law and F&B regulations, we ensure full legal compliance. Many brands have launched successfully with our help and we are ready to do the same for you—efficiently, legally and hassle-free.

This line graph showcases the revenue progression of India’s Packaged Drinking Water Industry over the past 10 years. In FY 2014–15, the industry recorded a revenue of approximately ₹0.58 lakh crore. Driven by rising health awareness, urban migration and an increase in disposable income, the sector witnessed consistent growth—reaching ₹0.93 lakh crore in FY 2019–20.

However, in FY 2020–21, there was a modest dip to ₹0.87 lakh crore due to the COVID-19 pandemic’s impact on travel, hospitality and on-the-go consumption. Post-pandemic, the sector bounced back swiftly. Revenues rose to ₹1.34 lakh crore in FY 2022–23 and further to an estimated ₹1.50 lakh crore in FY 2023–24, driven by packaged hygiene concerns, rural market penetration and institutional demand.

AUTHOR’S PERSPECTIVE: BOTTLED GROWTH — FROM URBAN LUXURY TO RURAL NECESSITY

The Past: From Metro Shelf to Everyday Sip (2014–2020)

Between FY 2014–15 and FY 2019–20, the Indian bottled water market transitioned from being a premium urban product to a mass-consumed daily necessity. Brands like Bisleri, Aquafina, Kinley and regional players expanded rapidly across cities, towns and highways.

This era saw:

• Rapid modern retail expansion (malls, airports, railway stations)
• An increase in events and travel consumption
• Initial growth in 20-liter bulk cans for homes and offices

The revenue climbed from ₹0.58 lakh crore to ₹0.93 lakh crore. However, unregulated and unbranded players also proliferated, especially in Tier 3–4 cities, creating concerns about safety and quality.

The Present: Pandemic Reset and Formalization (2020–2024)

FY 2020–21 marked a temporary contraction due to nationwide lockdowns. With hotels, offices and tourism paused, bottled water consumption declined slightly to ₹0.87 lakh crore. But this period also triggered a shift in consumer mindset — hygiene and water purity became paramount.

From FY 2021–22 onward, the industry saw a strong rebound:

• Work-from-home and e-commerce deliveries boosted home consumption
• Schools, colleges and institutions reopened, reviving bulk orders
• Smart vending machines, subscription-based refills and retail kiosk models expanded

By FY 2023–24, the market grew to ₹1.50 lakh crore, supported by digitized distribution, rural penetration and a renewed focus on regulated packaging standards.

The Future: Smart, Sustainable and Semi-Urban

Looking forward, the Indian packaged drinking water industry is expected to grow at a CAGR of 10–11%, potentially surpassing ₹2.5 lakh crore by FY 2028–29. Future growth will be powered by:

• Tier 2 and Tier 3 market expansion, where piped drinking water remains inconsistent
• Widespread adoption of bulk packaging (20L jars) and institutional supplies
• Sustainable packaging innovations like biodegradable bottles and reusable containers
• IoT-enabled dispensers, QR-code-based traceability and refill apps
• Health-focused fortified water (electrolyte, alkaline and mineral-enhanced variants)

The government’s Jal Jeevan Mission will reduce reliance on packaged water in rural households, but commercial demand will continue rising in hospitality, healthcare and FMCG sectors.

CONCLUSION: NOT JUST BOTTLED - INDIA’S PACKAGED WATER IS NOW PIVOTAL

From my perspective, bottled water in India has moved beyond convenience — it’s now a pillar of public health, lifestyle and safety. The growth from ₹0.58 lakh crore to ₹1.50 lakh crore reflects India’s changing hydration culture, heightened hygiene sensitivity and rising demand for safe alternatives to tap or tanker water.

While challenges like plastic waste and regulatory compliance remain, the sector’s shift toward sustainability, digital traceability and rural inclusionsignals a robust future.

This is no longer a side segment — it’s a core consumer category, essential for the health, travel and food ecosystems of modern India.