The global demand for cashew nuts is rising every year, making it one of the most profitable agro-processing businesses today. If you are planning to enter this industry, understanding the Steps to start Cashew Nut Business can help you set up a successful and scalable unit. From licensing to selecting machinery, every stage plays a crucial role in shaping your profitability. This guide covers all essential steps—simplified for new entrepreneurs.
Steps to Start Cashew Nut Business
- Research and Market Analysis
Before investing, conduct proper market research. Study:
- Local and international cashew demand
- Popular cashew grades (W240, W320, LWP, DW, etc.)
- Competition in your region
- Wholesale and retail pricing trends
- Customer segments: exporters, wholesalers, retailers, supermarkets
A clear understanding of demand and pricing helps you decide your production capacity.
Cashew Processing Business Registration & License
Every cashew business in India requires proper registration and licensing, including:
- MSME/Udyam Registration
- FSSAI License
- Trade License from Local Authority
- GST Registration
- Pollution Control Certificate
- Factory License (for medium/large units)
- BIS Certification (optional but adds credibility)
These approvals ensure legal compliance and smooth business operations.
Cost of Starting a Cashew Nut Processing Business
Your investment depends on whether you plan a small, semi-automatic, or fully automatic unit.
Typical cost components include:
- Factory setup
- Machinery purchase
- Boiler and steam generator
- Labour cost
- Electricity and water
- Raw cashew nuts (RCN)
- Packaging materials
On average:
- Small-scale unit: ₹15–35 lakhs
- Medium-scale: ₹40–80 lakhs
- Automatic line: ₹1–3 crore
Arrange Funds
You can finance your cashew business through:
- Bank loans
- Mudra loans
- MSME schemes
- Government subsidies for agro-processing
- Private investors or self-funding
Present a detailed project report (DPR) to increase loan approval chances.
Location Selection
Choose a location that offers:
- Easy access to raw cashew nuts
- Affordable labour
- Good road connectivity
- Adequate water and power supply
- Safe and hygienic environment
Industrial zones are ideal due to infrastructure and government support.
Procuring Raw Cashew Nuts
The quality of raw cashew nuts directly impacts your processing output. You can source RCN from:
- India (Odisha, Kerala, Maharashtra, Karnataka)
- African countries (Nigeria, Ivory Coast, Benin, Ghana)
Ensure proper moisture levels and shell quality before purchase.
Cashew Processing Unit Setup
Set up separate sections for:
- Raw material storage
- Steaming and drying
- Shelling
- Peeling and grading
- Packaging and finished goods storage
A well-organized layout improves productivity and reduces processing time.
Invest in Equipment
Investing in high-quality machinery ensures efficiency, better kernel recovery, and long-term reliability.
Muskaan Group provides advanced machines including:
- Raw Cashew Calibrator Grader – for accurate grading
- Autoclave Steaming Machine – for uniform steaming
- Auto Shelling Machine – for 95–96% perfect kernels
- Peeling Machine – for gentle peeling with minimal breakage
- Oven Dryer / Borma Hot Chamber – for moisture reduction
- Boiler Steam Generator – for steam supply
- Complete Turnkey Cashew Processing Solutions
Using high-performance machines reduces labour cost and boosts output.
Hiring and Training
Cashew processing requires skilled labour, especially in peeling, grading, and quality control.
Train your team on:
- Operating machines
- Safety procedures
- Quality standards
- Packaging guidelines
- Hygiene practices
A trained workforce ensures consistent and high-quality production.
Cashew Nut Processing Steps
- a) Cleaning and Grading
Remove dust, stones, and impurities. Then grade the raw nuts by size using a Calibrator Grader for uniform processing.
b) Steaming
Use an Autoclave Cooker to steam cashews. This softens the shell and reduces breakage during shelling.
c) Shelling
Automatic shelling machines crack the shells efficiently and improve whole kernel recovery.
Muskaan’s Auto Shelling Machine delivers up to 95–96% perfect kernels.
d) Drying
Dry the kernels in an Oven Dryer/Borma to reduce moisture levels and enhance shelf life.
e) Peeling and Grading
Use a Cashew Peeling Machine to remove the inner skin.
Sort kernels based on size, colour, and quality into grades like W180, W240, W320, LWP, SPLIT, etc.
f) Roasting
Optional step based on your business model. Roasted kernels attract higher market value.
g) Packaging
Use food-grade, airtight packaging to protect flavour and increase shelf life. Export units often use nitrogen-flushed packs.
Profit Margin
Cashew processing is one of the most profitable agro-based businesses.
Profit margins depend on:
- Kernel recovery rate
- Raw cashew cost
- Grade mix (W240 and W320 yield higher profits)
- Machinery efficiency
- Market demand
Average profit margin ranges between 15% to 35%, and even higher for premium grades.
Have a Marketing Plan
To grow your business, implement strong marketing strategies:
- Create a business website
- Promote through social media
- Supply to wholesalers and supermarkets
- Explore export opportunities
- Highlight your premium grades and hygienic processing
- Attend trade fairs and B2B exhibitions
A long-term marketing plan boosts brand visibility and customer trust.
Frequently Asked Questions
- Is the Cashew Processing Business Profitable?
Yes, it is highly profitable due to high demand and attractive margins, especially when using efficient machines that reduce breakage.
- What licenses are required to start a cashew nut processing business in India?
You need MSME registration, FSSAI license, GST registration, factory license, and pollution control approval.
- Where can I source high-quality raw cashew nuts in India?
Major cashew-growing states include Odisha, Kerala, Goa, Maharashtra, Karnataka, and Tamil Nadu.
- How can I ensure long shelf life of processed cashew nuts?
Maintain proper moisture levels, follow hygienic processing, and use airtight packaging (preferably nitrogen-flushed).
- Can I start a cashew nut processing business on a small scale?
Yes, small units require low investment and can later be upgraded to automatic processing lines.
- How do I handle cashew nut waste and by-products?
Cashew shells can be used to produce CNSL oil, a valuable industrial product. Husk and skin can be used as fuel or in compost.
Discover More from Muskaan Group
Contact Muskaan Group for advanced cashew processing machines and complete turnkey solutions designed to maximize productivity and profit.
