Hydroponic Farming: Understanding Setup Costs, Investment, and Profit Margins


Before starting a hydroponic farming business, it’s crucial to understand the costs involved in setting up the system, the investment required, and the potential profit margins. While the promises of high profits in hydroponic farming can be enticing, a comprehensive understanding of the initial setup, ongoing costs, and expected returns is essential for a successful venture.

Importance of Planning

Before diving into hydroponic farming, having a detailed plan is essential. This plan should encompass all aspects of the business, including training, setup costs, investment requirements, and profit projections. The following information outlines the costs associated with setting up a hydroponic farm and the potential profit margins.

Cost of Setting up Hydroponic Farming in India

Hydroponic farming, a form of urban agriculture, allows for vertical farming without soil. This method utilizes a nutrient-rich water solution to grow plants, making it possible to farm in small spaces.

Setting up a hydroponic farming system involves several components similar to precision farming systems. Below are the requirements and startup costs for a hydroponic farm covering an area of 5000 square feet:

One-Time Setup Cost of Hydroponic Farming

  • Polyhouse shelter: Rs 6,00,000
  • NFT System Setup:
    • Pipes (4 inches): Rs 7,00,000
    • Pipes (2 inches): Rs 12,000
    • Pipe connectors: Rs 1,20,000
    • Stand platform (holds 32 pipes each): Rs 1,00,000 (40 stands)
  • Water Storage and Pumping:
    • 20,000-liter tank: Rs 55,000
    • 1,000-liter plastic tanks: Rs 15,000 (2 tanks)
    • 5,000-liter plastic tank: Rs 22,000
    • Water pump (1 HP): Rs 30,000 (4 pumps)
    • Water pump (0.5 HP): Rs 10,000 (2 pumps)
  • Other Equipment:
    • Net cups: Rs 1,00,000
    • Water cooler: Rs 60,000
    • RO system: Rs 50,000
    • pH meter: Rs 1,200
    • TDS meter: Rs 2,000
  • Labor cost: Rs 10,000

The total one-time setup cost for hydroponic farming ranges between Rs 18,87,200 and Rs 20,00,000.

Cost of Hydroponic Farming per Cycle

A hydroponic farming system typically operates on a monthly cycle. The monthly costs involved are:

  • Electricity: Rs 15,000
  • Seeds: Rs 20,000
  • Fertilizer: Rs 20,000
  • Labor: Rs 10,000
  • Maintenance: Rs 5,000
  • Packing and transportation: Rs 10,000

The total cost per cycle is Rs 80,000.

Profit in Hydroponic Farming

For a single crop cycle, such as lettuce grown on a 5000-square-foot area, the results are as follows:

  • Total production: 3200 kg
  • Waste: 1000 kg
  • Net yield: 2200 kg
  • Market value: Rs 350/kg
  • Total yield value: Rs 7,70,000

Calculating Profit Margin

  • Profit margin = Total earnings – Per cycle investment
  • Profit margin = Rs 7,70,000 – Rs 80,000 = Rs 6,90,000 per cycle

Investment and Profit per Square Foot

For a 5000-square-foot area:

  • Total initial investment: Rs 20,00,000
  • One-time investment per square foot: Rs 400
  • Per cycle investment per square foot: Rs 16
  • Total profit for 5000 square feet: Rs 6,90,000
  • Profit margin per square foot: Rs 138 per cycle


Hydroponic farming presents a lucrative opportunity, but it requires careful planning and investment. Understanding the setup costs, ongoing investments, and potential profits is critical for success. With the right approach, hydroponic farming can yield significant returns, contributing to sustainable and profitable agricultural practices.

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