Starting a Small Business in Bihar: Registrations, Professional Tax, the Mukhyamantri Udyami Yojana and Opportunities

Bihar has a large and growing small business sector, with about 43 lakh enterprises, and ranks fourth in India for small trade businesses. Its famous products include Mithila makhana, Shahi litchi from Muzaffarpur, Bhagalpur silk and Madhubani paintings, all with GI tags, while Patna, Gaya and other cities offer growing markets for trade and services.

This guide brings together what’s specific to Bihar: what government data shows about small businesses in the state, the registrations and state rules you’ll deal with, the support available, and notes on its main cities. For the national rules that apply everywhere, follow the links to our detailed guides.

Key points

• Bihar had about 43.2 lakh small unincorporated businesses in 2023-24, ranking fourth in trade and sixth in services in India.
• Establishments register under the Bihar Shops and Establishments Act, 1953.
• Bihar levies professional tax.
• The Mukhyamantri Udyami Yojana supports new enterprises with part grant and part interest-free loan for eligible categories; check current terms.
• GI-tagged products such as makhana, litchi, Bhagalpur silk and Madhubani art offer strong branding opportunities.

Small businesses in Bihar: the numbers

MoSPI’s Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24 counted about 43.2 lakh small unincorporated non-farm establishments in Bihar, in manufacturing, trade and other services.

Compared with India as a whole, in manufacturing, the average business added ₹1,29,390 of value a year, about 31% below the all-India average of ₹1,88,790; in trade, the average business added ₹1,68,215 of value a year, about 39% below the all-India average of ₹2,73,779; in services, the average business added ₹1,82,108 of value a year, about 31% below the all-India average of ₹2,62,239. Value added is what a business earns from sales minus the cost of materials, stock and other inputs, before wages and the owner’s pay.

Bihar’s average values added and wages are below the national average, reflecting many very small enterprises. But costs are low, demand is growing quickly, and the state’s famous products have national and international markets that small businesses can tap through branding and online sales.

Urban or rural?

Location within Bihar makes a big difference. Average value added per business by area: manufacturing, ₹2,11,875 urban against ₹1,16,120 rural (1.8 times); trade, ₹2,51,816 urban against ₹1,40,968 rural (1.8 times); services, ₹2,48,437 urban against ₹1,65,800 rural (1.5 times). The urban advantage is widest in manufacturing. Rural businesses usually have lower rent and wage costs, and less competition, so a rural or small-town business can still be very profitable; but if your plan depends on high-spending customers, the larger towns and cities of Bihar are where most of that spending is.

Registrations and state rules

Udyam registration is free and national, and is the gateway to MSME schemes, priority lending and protection against late payments. See our Udyam guide.

GST: Bihar follows the standard thresholds: ₹40 lakh for businesses supplying only goods, and ₹20 lakh for services or mixed supplies. See GST registration for small businesses.

Shops and establishments: Shops and establishments register under the Bihar Shops and Establishments Act, 1953, through the state labour department’s online services. See shop and establishment registration and trade licences.

Trade licence: Municipal corporations issue trade licences, including Patna, Gaya, Bhagalpur, Muzaffarpur, Darbhanga and Purnia, with municipal councils elsewhere.

Professional tax: Bihar levies professional tax on salaried employees, businesses and professionals. Employers register to deduct and pay it. Check current slabs.

Food businesses need FSSAI registration or a licence, applied for nationally on FoSCoS, with the state food safety department handling inspections and state licences. See our FSSAI guide.

Employing people: the four labour codes in force since 21 November 2025 apply nationally, with Bihar’s own rules on details such as working hours, holidays and minimum wages. See employment contracts and HR basics.

Hiring in Bihar

ASUSE 2023-24 found that small businesses in Bihar paid hired workers, on average, the following each year, including employer contributions: manufacturing, ₹1,15,233 (close to the all-India average of ₹1,25,345); trade, ₹94,217 (about 24% below the all-India average of ₹1,24,250); services, ₹99,665 (about 27% below the all-India average of ₹1,37,098). These averages help you budget, but you must pay at least the minimum wage Bihar has notified for each category of worker, which the state revises periodically, and follow PF and ESI rules once they apply. Advanton’s hiring cost calculator shows the full cost of a hire, and our guide to hiring your first employee explains PF, ESI and the labour codes.

Local tips

• Chhath Puja is Bihar’s biggest festival, with huge demand for fruit, puja items, clothing and travel home from other states.
• Makhana and litchi have strong national demand; quality packaging and branding add value.
• Bodh Gaya draws international visitors, especially in the winter season.
• Many workers from Bihar live in other states, creating demand for travel, remittance and courier services around festivals.
• Hindi, Maithili, Bhojpuri and Magahi are widely spoken; local-language marketing connects with customers.
• Flood seasons can disrupt north Bihar; plan stock and insurance.

Support for small businesses in Bihar

• Bihar Single Window Clearance System: online approvals and services for businesses.
• Mukhyamantri Udyami Yojana: supports new enterprises for eligible categories, such as SC and ST, extremely backward classes, women and youth, with financial assistance that has combined a grant and an interest-free loan, plus training; check current eligibility and terms.
• Bihar Startup Policy: support for startups through incubation and funding programmes.
• District Industries Centres help with registrations, PMEGP and state schemes.
• JEEViKA: Bihar’s rural livelihoods programme supports self-help groups and women’s enterprises.

Late payments: Bihar has a Micro and Small Enterprises Facilitation Council, which hears cases filed by registered micro and small enterprises through the MSME Samadhaan portal. See getting paid on time.

Loans: national schemes such as Mudra, PMEGP and CGTMSE are available through banks across Bihar; see business loans and government schemes.

Spotlight: GI products: makhana, litchi, silk and Madhubani

Bihar has several GI-tagged products with national and international demand. Mithila makhana (fox nut) is a healthy snack whose popularity has grown fast; Shahi litchi from Muzaffarpur is prized for its flavour; Bhagalpur silk (tussar) is a traditional weave; and Madhubani paintings are one of India’s best-known folk arts.

Small businesses can add value through processing, roasting and flavouring makhana; packing and branding for retail and online sale; cold chain for litchi; and design, finishing and marketing for silk and art. Selling online and through ONDC, with good packaging and honest storytelling, lets Bihar’s products reach customers across India and abroad. Food products need FSSAI licensing, and exports need an IEC.

The main cities

• Patna: the state capital, with trade, education, healthcare and services.
• Gaya and Bodh Gaya: pilgrimage and international Buddhist tourism.
• Bhagalpur: silk weaving and trade.
• Muzaffarpur: litchi, trade and agro-processing.
• Darbhanga, Madhubani and Purnia: makhana, Madhubani art and regional trade.

Opportunities in Bihar

• GI products and food processing: makhana, litchi and other products; see spices and food processing and selling online.
• Handloom and art: Bhagalpur silk and Madhubani painting; see selling handicrafts and handloom.
• Trade: kirana stores, hardware and mobile repair.
• Pilgrimage tourism: homestays and travel agencies.
• Mobility and services: e-rickshaws and coaching.

Common mistakes in Bihar

• Missing the Mukhyamantri Udyami Yojana when eligible.
• Ignoring flood risks in north Bihar.
• Selling GI products without proper sourcing and quality control.
• Forgetting professional tax as an employer.

A checklist for starting in Bihar

1. Register on Udyam.
2. Register under the Bihar Shops and Establishments Act.
3. Get your municipal trade licence.
4. Register for GST when required.
5. Register for professional tax as an employer.
6. Get FSSAI registration for food businesses.
7. Check the Mukhyamantri Udyami Yojana and other support with your DIC.

Using Advanton’s free tools

Test your idea against ASUSE figures for Bihar with Advanton’s business idea reality check: choose your activity, select Bihar as your state, and compare your sales, costs and break-even with the state’s averages. Make GST-compliant invoices with the invoice generator, work out the real cost of hiring with the hiring cost calculator, and when you’re ready for customers, list your business free in the India Business Directory under Bihar.

Frequently asked questions

What is the Mukhyamantri Udyami Yojana?
A Bihar scheme supporting new enterprises in eligible categories with financial assistance and training; check current eligibility and terms.

Which Shops Act applies in Bihar?
The Bihar Shops and Establishments Act, 1953.

Does Bihar levy professional tax?
Yes, on salaried employees, businesses and professionals.

Which Bihar products have GI tags?
Mithila makhana, Shahi litchi, Bhagalpur silk and Madhubani paintings, among others.

Is Bihar a good place to start a business?
Costs are low and demand is growing, with strong opportunities in food processing, trade and GI products.

Can I sell makhana online?
Yes, with FSSAI registration, good packaging and labels. Mithila makhana’s GI tag helps with branding.

Is Patna a good place for coaching businesses?
Yes. Patna has strong demand for coaching and education services, though competition is high.

What is JEEViKA?
Bihar’s rural livelihoods programme, which supports women’s self-help groups and their enterprises.

Is Bodh Gaya busy all year?
Visitors come year-round, with peak international arrivals in winter.

Can I export makhana?
Yes, with an IEC, FSSAI compliance and importers’ rules.

Is Gaya good for trade?
Yes, for regional trade.

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Sources

1. MoSPI, Annual Survey of Unincorporated Sector Enterprises 2023-24, full report
2. Ministry of MSME, Udyam Registration portal
3. GST portal (Goods and Services Tax Network)
4. FSSAI, Food Safety Compliance System (FoSCoS)
5. Ministry of Labour and Employment
6. MSME Samadhaan (delayed payment portal)

Last reviewed November 6, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.