A Guide to Start a Bus Transportation Business in India

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 huge potential for the bus transportation business. While state-run buses form the backbone of the system, there’s also good demand for private buses.

If you’re interested in starting a bus business, this article provides some important information you need to know before launching one.

Difference between Intra-city and Inter-city Bus services:

The bus transportation system can be divided into intra-city and inter-city bus services. You need to decide 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.

Permit requirements for specific routes are managed by local authorities. The market is competitive, with both 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 main 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 type of bus is very crucial in the bus transport business. Before choosing a bus you need to consider factors like whether are you operating within the city or between towns or rural areas.

Also, decide on the amenities you require and it should 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.

Investment Required for Bus Transportation Business

To start a bus transportation business in India, you may require an investment ranging from ₹10 lakhs to ₹2 crores. The investment amount depends on the type and size of the bus and the amenities you require.

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

Also Read: Truck Business in India | Complete Details

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 major concern. From accidents to passenger security, bus companies need to invest in training, technology, and better infrastructure to keep everyone safe.

While starting a bus transportation business in India comes with its fair share of challenges, careful planning and consideration can pave the way for success.