Buses are the most dominant form of public transportation in India. They connect even remote villages to metropolises.
With rapidly developing road infrastructure, India has enormous potential for the bus transportation business. While state-run buses form the system’s backbone, there’s also good demand for private buses.
If you’re interested in starting a bus business, this article provides the essential information you need to know before launching one.
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Difference between Intra-city and Inter-city Bus services
The bus transportation system can be divided into intra-city and inter-city bus services. It would help if you decided which service has demand in your region.
Intra-city (within city limits)
Intra-city buses travel shorter routes within city limits, making frequent stops and carrying many passengers. They run throughout the day according to strict schedules.
These buses are typically smaller but have high passenger capacity. They serve daily commuters and students primarily.
Local authorities manage permit requirements for specific routes. The market is competitive, with public and private operators vying for ridership. Initial investment costs are lower due to the smaller size of the vehicles.
Inter-city Bus (between cities)
Inter-city buses cover longer distances with fewer stops, resulting in longer journey times. They are larger and often equipped with amenities like reclining seats and entertainment systems.
Booking systems are advanced, offering online and offline options and sometimes flexible pricing. Business travellers, tourists, and families are the primary users of inter-city services.
Permits for crossing state borders are required and regulated by both state and national authorities. Competition is lower compared to intra-city services, and initial investment costs are higher due to the requirement for larger buses.
Purchasing a Bus
Choosing the right bus type is crucial in the bus transport business. Before selecting a bus, you need to consider whether you are operating within the city or between towns or rural areas.
Also, decide on the required amenities and ensure they come under your budget. Make sure there are enough service centres for the brand of bus you are planning to purchase.
In general, the price range for various types of buses is as follows:
Mini-buses
Start from ₹8 lakhs for a basic model like the Tata Magic Express used for shuttle services.
Standard buses
Cost around ₹20-30 lakhs for popular models like Tata Starbus City or Ashok Leyland LP 410.
Intercity coaches
Range from ₹35-55 lakhs for basic models to over ₹1 crore for luxury coaches.
Electric buses
Are more expensive, with options like the Tata Starbus EV 4 starting from ₹2.3 crore.
Different brands and models within the same category will have varying prices based on features and specifications.
Used buses can be significantly cheaper, sometimes even half the price of new ones, but require careful inspection and may incur maintenance costs.
What are the top Bus brands in India?
Tata Motors, Ashok Leyland, Mahindra & Mahindra, Bharath Benz, Eicher Motors, Volvo Buses, and Force Motors are some of India’s top Bus manufacturing brands.
What are the widely used bus models in India?
Tata Starbus, Ashok Leyland JanBus, Eicher Pro 1200 City, and Volvo 9600 are some of India’s widely used bus models.
Investment Required for Bus Transportation Business
To start a bus transportation business in India, you may require an investment ranging from ₹ 10 lakhs to ₹ two crores. The investment amount depends on the type and size of the bus and the amenities you need.
The breakdown of the investment amount is as follows:
- Purchasing the bus
- Licenses and permits: This includes route permits, state permits, vehicle registration, and driver’s licenses.
- Insurance: For bus, passengers, and staff
- Business registration: Sole proprietorship/LLP/Pvt. Limited
- Spare parts and tools Or amenities depending on your service type
- Basic supplies: Such as uniforms, first-aid kits, fire extinguishers, and ticketing equipment
- Marketing and promotion: Intercity bus services require marketing and promotions
The Operational Costs
The operational costs include Fuel Charges, Driver and employee salary, Vehicle maintenance and repair expenses, Tyre replacement, Toll charges, Insurance renewals, other permit renewals, Bus cleaning and Washing charges, and Regulatory Compliance (inspections, emissions tests, safety protocols, etc).
Revenue Streams in Bus Business
The bus transportation business in India generates revenue through various channels,
- Regular Fares or Ticketing ( is the primary source).
- Some buses carry parcels alongside passengers
- Offering discounted passes for frequent travellers can attract loyal customers
- Leasing exterior and interior space on buses for advertisements
- Renting out buses for private events
Challenges in the bus transportation business
The Indian bus business is very competitive. Standing out from the crowd and competing with big names can be tricky.
Additionally, the rise in popularity of growing popularity of cars, scooters, and ride-sharing apps adds to the competition.
On top of that, keeping the business profitable is an uphill battle. Fuel costs, repairs, insurance, and salaries keep rising.
Safety is also a significant concern. Bus companies must invest in training, technology, and better infrastructure, from accidents to passenger security, to keep everyone safe.
Starting a bus transportation business in India comes with its fair share of challenges, so careful planning and consideration can pave the way for success.