Indoor Mushroom Farming in India: Varieties, Benefits & Why It's Catching On

Mushrooms – they’re not just a delicious topping for your pizza anymore.

In recent years, mushroom farming has quietly become one of the most profitable small-scale farming ventures in India. And thanks to indoor cultivation techniques, you don’t need acres of land or a fancy setup to get started. All you need is a little space, the right conditions, and a growing curiosity.

Whether you’re someone exploring alternative income streams or just interested in urban farming, indoor mushroom farming could be your next big move.

In this blog, let’s explore how indoor mushroom farming works, the different varieties you can grow in India, and the wide range of benefits it brings.

What Is Indoor Mushroom Farming?

Indoor mushroom farming is exactly what it sounds like: cultivating mushrooms in a controlled, enclosed environment rather than in open fields.

Unlike traditional crops, mushrooms don’t need sunlight. They thrive in darkness, with just the right levels of humidity, temperature, and ventilation.

The setup can be as simple as a room fitted with racks and humidity control—or as advanced as a fully automated grow chamber. Farmers use bags filled with organic waste (like straw, sawdust, or cotton hulls) as the growing medium, and once inoculated with mushroom spawn, the bags are kept in clean, dark rooms until the fungi start to sprout.

Because of its flexibility, this model is catching on in urban and rural areas alike, offering consistent yields with minimal land use and water consumption.

Also Read: Meet This Assistant Professor Who Became Mushroom Lady Of Haryana, Now Clocks Rs 9 Lakhs in Monthly Revenue From Mushroom Farming

Why Are Indian Farmers Shifting Indoors?

Traditionally, Indian agriculture has leaned on water-heavy, weather-dependent crops like rice, wheat, and sugarcane. But with erratic monsoons, shrinking landholdings, and increasing climate stress, many farmers are seeking alternatives that promise better returns with lower risk.

That’s where indoor mushroom farming comes in.

For one, it’s climate-resilient. You’re not at the mercy of heat waves or cold snaps. Indoors, you set the rules. Additionally, compared to greenhouse cultivation or dairy ventures, the initial investment is relatively lower, making it a more accessible option for many aspiring agripreneurs.

It also offers a shorter cultivation cycle. Oyster mushrooms, for example, can be harvested in just 20–25 days, allowing for multiple crop cycles a year. Button mushrooms take about 60–70 days, still quicker than most staple crops.

The final and perhaps most compelling reason is market demand. Urban India’s appetite for mushrooms has grown significantly.

Once considered an exotic ingredient, mushrooms are now everyday grocery staples. Their health benefits, vegetarian protein content, and culinary versatility have made them incredibly popular with conscious consumers.

Types of Mushrooms Grown in India

India’s indoor mushroom scene is largely dominated by a few easy-to-grow, high-demand varieties:

1. Button Mushroom 

This is the most commonly consumed mushroom in India. It’s white, round, and often used in pizzas, curries, and salads. It requires a cooler climate but can be grown year-round in temperature-controlled indoor setups.

2. Oyster Mushroom 

Fan-shaped with a mild flavour, oyster mushrooms are beginner-friendly and grow very quickly. They do well in moderate temperatures and are suitable for most Indian regions.

3. Milky Mushroom

Native to India and well-suited for hot, humid climates. It has a dense texture and strong shelf life and is widely grown in South India.

4. Shiitake

A premium variety with medicinal properties, shiitake mushrooms are grown mostly for urban markets and exports. They require more precision in growth conditions but fetch a higher price.

Each type has its own growing requirements and market value, and many growers experiment with multiple varieties to diversify income.

Also Read: Hyderabad engineer quit his well-paying job to start taking corporate employees for workshops into the jungles; clocked Rs 2.5 Cr in revenue

Benefits of Indoor Mushroom Farming

It’s not just a passing trend or some quirky new idea.

Mushroom cultivation offers a rare blend of low investment, high returns, and sustainable farming – something that’s become increasingly attractive in today’s unpredictable agricultural landscape.

For smallholder farmers, it’s a way to supplement their income without needing more land or resources. For youth and first-time entrepreneurs, it presents an exciting low-barrier entry into agribusiness, especially in cities where farming space is limited but demand for fresh, organic produce is booming.

What makes it so appealing across such a wide spectrum of people?

The advantages are hard to ignore, and the returns, both financial and ecological, speak for themselves.

1. Low Space Requirements – You don’t need acres of land. Mushrooms grow vertically, in racks or shelves, making them ideal for city dwellers or small landholders.

2. Short Growing Cycles – With fast-growing varieties, farmers can harvest multiple times a year, translating to more frequent income.

3. Minimal Water Usage – Compared to crops like rice or sugarcane, mushrooms need very little water, mostly for maintaining humidity.

4. High Market Demand – Urban customers are looking for healthier, plant-based foods, and mushrooms fit the bill perfectly. They’re rich in vitamin D, protein, fibre, and antioxidants.

5. Waste to Wealth – Mushrooms grow on agricultural waste like straw, sawdust, or cotton waste. After harvesting, the leftover substrate can be turned into compost or animal feed – nothing goes to waste.

Also Read: MBA Grad From Delhi Grows Button Mushrooms In Three Rooms; Clocks Rs 60 Lakh Revenue Annually

Support from Government & Agricultural Institutions

The Indian government is actively promoting mushroom farming as part of its agri-innovation and rural development missions.

Organisations like NABARD, Krishi Vigyan Kendras (KVKs), and state horticulture departments offer a range of support, including technical training, low-interest loans, and subsidies for setting up mushroom farms. In some cases, farmers can avail up to 50% subsidy (up to ₹10 lakhs) for infrastructure development, spawn production units, and cold storage facilities.

To qualify for these subsidies, a minimum farm space of 2,100 sq. ft. is typically required. This ensures that the setup is viable for commercial-scale operations.

The National Horticulture Board (NHB) and the Ministry of Agriculture are also backing mushroom farming through workshops, exposure visits, and ongoing research into new varieties and export potential.

This kind of institutional support not only reduces the financial burden but also empowers first-time farmers with the knowledge and resources needed to succeed.

Also Read: Fed Up With Foreign MNCs Exploiting Indian Fish Farmers, Mumbai Man Builds A Startup To Help Make Aquaculture More Profitable 

Mushrooms as a Modern Super Crop

In a world where agricultural land is shrinking, water is becoming scarce, and food insecurity is a growing concern, mushrooms offer a brilliant alternative.

They’re quick to grow, require minimal resources, and offer high nutritional value. Whether you’re a rural farmer trying to diversify your income or an urban entrepreneur chasing a health-conscious audience, mushrooms present a low-risk, high-reward opportunity.

And more than anything, they represent a new way of thinking of farming smarter, not harder.

India’s mushroom moment is here. And it’s just getting started.