India's Pharmaceutical Regulatory Landscape for Foreign Companies
India is the world's third-largest pharmaceutical market by volume and the largest supplier of generic medicines globally, producing over 60% of the world's vaccines and 20% of global generic drug exports. For foreign pharma companies, India offers both a massive domestic consumption market and a cost-effective manufacturing base — but accessing either requires navigating one of the most detailed drug licensing frameworks in the world.
The regulatory architecture involves two layers of authority. The Central Drugs Standard Control Organisation (CDSCO), headed by the Drugs Controller General of India (DCGI), handles approvals for new drugs, clinical trials, import registrations, and biologicals. State Drug Licensing Authorities (SDLAs) handle manufacturing licences, wholesale and retail licences, and routine inspections for drugs already approved by CDSCO.
Foreign companies must engage with both levels, and the process differs significantly depending on whether the company intends to manufacture in India, import finished products, or both. This guide covers every pathway with specific forms, fees, timelines, and practical guidance current as of March 2026.
FDI Policy for Pharmaceuticals
India's FDI policy for pharmaceuticals distinguishes between new and existing investments:
| Investment Type | FDI Cap | Route |
|---|---|---|
| Greenfield (new facilities) | 100% | Automatic |
| Brownfield (existing facilities) | 74% | Automatic up to 74%; Government approval beyond 74% up to 100% |
Greenfield investments — setting up new manufacturing plants, R&D centres, or pharmaceutical operations — enjoy full FDI freedom under the automatic route. No prior government approval is required, and the foreign company can own 100% of the Indian entity.
Brownfield investments — acquiring existing Indian pharmaceutical companies — are capped at 74% under the automatic route. Beyond 74%, government approval from the Department of Pharmaceuticals (DoP) is required, which typically takes 10-12 weeks. The DoP evaluates factors including the impact on domestic drug availability, employment implications, and technology transfer commitments.
All FDI must comply with FEMA regulations, including FC-GPR filing within 30 days of share allotment and annual FLA returns.
Drug Manufacturing License: The State-Level Process
To manufacture drugs in India, a foreign company must first establish an Indian entity — typically a private limited company or wholly-owned subsidiary — and then apply for a drug manufacturing licence from the State Drug Licensing Authority (SDLA) in the state where the manufacturing facility is located.
Form 25: Allopathic Drug Manufacturing License
Form 25 is the standard licence for manufacturing allopathic (modern medicine) drugs in India. The application is made to the State Licensing Authority and involves the following:
Documents Required
- Application in the prescribed state format with details of the manufacturing premises
- Plan and layout of the manufacturing premises showing equipment placement, material flow, and personnel flow
- List of equipment and machinery with calibration certificates
- Details of qualified technical staff — every manufacturing unit must have an approved pharmacist or qualified person in charge of manufacturing operations
- Good Manufacturing Practice (GMP) compliance documentation per Schedule M of the Drugs and Cosmetics Act, 1940
- Proof of premises ownership or lease agreement (minimum 3-year lease)
- Environmental clearance from the State Pollution Control Board
- Fire safety certificate from the local fire department
- Company incorporation certificate, PAN, and GST registration
Joint Inspection
Before a licence in Form 25 is granted, the licensing authority conducts a joint inspection of the manufacturing premises. This inspection is conducted jointly by Drug Inspectors appointed by the Central Government and the State Government. The inspectors evaluate:
- Compliance with Schedule M (GMP standards) covering building design, water systems, HVAC, cleanliness, and documentation practices
- Equipment qualification and validation status
- Standard Operating Procedures (SOPs) for manufacturing, quality control, and quality assurance
- Adequacy of quality control laboratory with required analytical instruments
- Storage conditions for raw materials, intermediates, and finished products
- Waste management and effluent treatment facilities
License Grant and Validity
Upon satisfactory inspection, the SDLA issues the drug manufacturing licence in Form 25. The licence is valid for five years from the date of issue and must be renewed before expiry. Late renewal applications attract penalties, and manufacturing without a valid licence is a criminal offence under the Drugs and Cosmetics Act.
Form 28: Biological and Specialised Manufacturing
Form 28 applies to manufacturing of biological products including vaccines, blood products, recombinant DNA products, and certain specialised categories. The process is similar to Form 25 but involves additional scrutiny from CDSCO's biological division and more stringent facility requirements including dedicated biological safety equipment, cold chain infrastructure, and batch release testing protocols.
Timeline and Costs
The drug manufacturing licence process typically takes 3-6 months from application to grant, depending on the state and the complexity of the product portfolio. Key cost components include:
| Item | Approximate Cost |
|---|---|
| Application fee (Form 25) | INR 1,500-6,000 per product (varies by state) |
| Schedule M compliance (facility fit-out) | INR 50 lakh-5 crore depending on scale |
| Quality control laboratory setup | INR 20-80 lakh |
| Qualified Person salary (annual) | INR 6-15 lakh |
| Environmental clearance | INR 1-5 lakh |
CDSCO Import Registration: Form 41 Under Rule 27A
Foreign pharma companies that wish to import finished drug formulations or bulk drugs into India without setting up local manufacturing must obtain a Registration Certificate in Form 41 from CDSCO under Rule 27A of the Drugs and Cosmetics Rules, 1945.
What Form 41 Covers
A Registration Certificate (Form 41) certifies that the overseas manufacturing premises and the specific drugs manufactured there are registered with CDSCO for import into India. It is a prerequisite for obtaining an import licence.
Application Process
- Appoint an authorised Indian agent: Foreign manufacturers cannot apply directly to CDSCO. An authorised Indian agent — a company or individual holding a valid wholesale drug licence (Form 20B/21B) in India — must be appointed to submit and manage the registration application on the SUGAM portal
- Submit application in Form 40: The Indian agent submits Form 40 on the SUGAM 2.0 portal with the following documents:
- Certificate of Pharmaceutical Product (CPP) or Free Sale Certificate from the country of origin, apostilled or authenticated by the Indian Embassy
- GMP certificate from the country's regulatory authority
- Product dossier including specifications, analytical methods, stability data, and packaging details
- Plant Master File (PMF) — notarised copy
- Form 9 (Undertaking by the manufacturer) — notarised and authenticated by the Indian Embassy of the country of origin
- Authorization letter from the manufacturer to the Indian agent
- WHO prequalification certificate (if available — expedites processing)
- CDSCO technical review: CDSCO's Import Division reviews the application for completeness and technical adequacy. Queries are communicated through the SUGAM portal
- Facility inspection (if required): CDSCO may conduct an inspection of the foreign manufacturing premises. This is mandatory for certain categories of drugs and discretionary for others. The inspection fee is USD 25,000 (or equivalent in INR), borne by the applicant
- Grant of Form 41: Upon satisfaction, CDSCO issues the Registration Certificate in Form 41, valid for three years from the date of issue
Fees
| Fee Type | Amount |
|---|---|
| Registration fee per drug | USD 10,000 (or INR equivalent) |
| Additional drug fee | INR 1,000 per additional drug |
| Inspection fee (if applicable) | USD 25,000 |
Timeline
The Form 41 registration process takes 3-9 months depending on the drug category, completeness of documentation, and whether a facility inspection is required. Biologicals and new drug categories typically take longer.
Import License: Form 8 and Form 10
Once the Registration Certificate (Form 41) is obtained, the Indian agent can apply for an Import Licence to actually bring the drugs into India.
Application Process
- Form 8 application: The Indian agent submits an application in Form 8 (for drugs not in Schedule X) or Form 8A (for Schedule X drugs — primarily narcotic and psychotropic substances) on the SUGAM portal
- Form 9 undertaking: A duly notarised undertaking in Form 9 signed by the authorised agent or manufacturer must accompany the application
- CDSCO review: The Import Division reviews the application against the Registration Certificate and verifies that all product specifications match
- Grant of Form 10/10A: CDSCO grants the Import Licence in Form 10 (standard drugs) or Form 10A (Schedule X drugs). The licence is valid for three years
Prerequisites
The Indian agent must hold a valid wholesale drug licence (Form 20B for drugs other than Schedule C/C1, or Form 21B for Schedule C/C1 drugs) issued by the State Licensing Authority. Without this prerequisite licence, the import licence application will be rejected.
New Drug Approval: When the Drug Is Not Already Marketed in India
If the foreign company's drug has not been previously approved or marketed in India, it requires New Drug Approval from CDSCO before import registration or manufacturing can proceed.
New Drug Application Process
- Pre-submission meeting: CDSCO encourages applicants to request a pre-submission meeting with the relevant subject expert committee to discuss data requirements
- Application submission: Submit the New Drug Application on SUGAM with the complete dossier in Common Technical Document (CTD) format, including quality data (Module 3), non-clinical study reports (Module 4), and clinical trial data (Module 5)
- Subject Expert Committee review: The application is reviewed by a Subject Expert Committee (SEC) comprising domain experts, clinicians, and pharmacologists
- Clinical trial requirement: For drugs not approved in their country of origin or with limited global approval history, CDSCO may require Phase III clinical trials in India. For drugs with extensive global data, a bridging study or waiver may be granted
- Marketing approval: Upon SEC recommendation, the DCGI grants marketing approval, after which the company can proceed with either manufacturing licence or import registration
Timeline
New drug approvals take 6-18 months depending on data requirements and whether local clinical trials are mandated. India has significantly reduced timelines since implementing the New Drugs and Clinical Trials Rules, 2019, which provide defined timelines for regulatory action at each stage.
The SUGAM 2.0 Portal: India's Digital Drug Regulatory Platform
Since 2025, CDSCO has mandated the use of the revamped SUGAM 2.0 portal for all regulatory submissions. Key features include:
- Online application submission for all licence types (manufacturing, import, clinical trials, new drugs)
- Real-time application tracking with status updates at each review stage
- Digital document management with secure upload and retrieval
- Automated query management with defined response timelines
- E-labeling compliance for certain product categories from Q3 2025 onwards
Foreign companies should note that the Indian agent manages the SUGAM portal profile and submissions — the foreign manufacturer does not have direct portal access. Choosing a competent and responsive Indian agent is therefore critical to the regulatory timeline.
State Drug Licensing Authority vs CDSCO: Jurisdictional Clarity
Understanding which authority handles which approval prevents costly delays:
| Approval Type | Authority | Key Form |
|---|---|---|
| Drug manufacturing licence (allopathic) | State Drug Licensing Authority | Form 25 |
| Drug manufacturing licence (biologicals) | CDSCO + State | Form 28 |
| New drug approval | CDSCO (DCGI) | New Drug Application |
| Clinical trial permission | CDSCO | CT-04 (on SUGAM) |
| Import registration certificate | CDSCO | Form 41 |
| Import licence | CDSCO | Form 10/10A |
| Wholesale drug licence | State Drug Licensing Authority | Form 20B/21B |
| Retail drug licence | State Drug Licensing Authority | Form 20/21 |
Entity Structure for Foreign Pharma Companies
The choice of entity structure depends on whether the company intends to manufacture locally, import products, or both:
Wholly-Owned Subsidiary (Greenfield Manufacturing)
A wholly-owned subsidiary incorporated as a private limited company is the most common structure for greenfield pharmaceutical manufacturing. This provides 100% ownership control under the automatic route, the ability to hold manufacturing licences directly, full operational control over quality systems, and eligibility for government incentives including the Production Linked Incentive (PLI) scheme for pharmaceuticals.
Joint Venture (Brownfield Acquisition Beyond 74%)
For acquisitions of existing Indian pharma companies where the foreign investor seeks more than 74% ownership, a joint venture with government approval is required. The Department of Pharmaceuticals evaluates the acquisition based on competition concerns, drug supply security, and employment impact.
Liaison Office (Market Evaluation)
A liaison office can be established for market research, technical support coordination, and relationship building before committing to manufacturing or import operations. Liaison offices cannot undertake commercial activity or earn revenue in India.
Transfer Pricing and Intercompany Transactions
Transfer pricing is a critical compliance area for foreign pharma companies with Indian operations. Common intercompany transactions that attract scrutiny include:
- Active Pharmaceutical Ingredient (API) purchases from the parent company — must be at arm's length with proper benchmarking
- Technology transfer fees and royalties for manufacturing know-how — typically 2-5% of net sales, subject to withholding tax and DTAA rates
- Clinical trial data sharing — valuation of proprietary clinical data transferred to the Indian entity
- Management service charges from the global headquarters — must demonstrate tangible benefit to the Indian entity
- Brand licensing fees — requires contemporaneous documentation and benefit analysis
The Indian transfer pricing regime requires comprehensive documentation maintained annually, with the Transfer Pricing Report (Form 3CEB) due by the tax return filing deadline. Failure to maintain documentation attracts penalties of 2% of the transaction value.
Practical Considerations for Foreign Pharma Companies
Choosing the Right State
Different Indian states offer varying incentives for pharmaceutical manufacturing. Gujarat, Himachal Pradesh, Andhra Pradesh, Telangana, and Sikkim are traditional pharma manufacturing hubs with established supply chains and skilled labour pools. Several states offer capital subsidies, tax holidays, and subsidised land in designated pharma parks.
Schedule M Compliance
India's GMP standards under Schedule M of the Drugs and Cosmetics Act have been progressively aligned with WHO GMP requirements. Foreign companies accustomed to US FDA cGMP or EU GMP standards will find Schedule M compliance straightforward, but must ensure specific Indian documentation requirements are met.
Pharmacovigilance Requirements
Foreign pharma companies must establish a pharmacovigilance system with a qualified person for pharmacovigilance (QPPV) based in India. Adverse event reporting to CDSCO is mandatory within defined timelines (serious events within 15 days, periodic safety reports annually).
For professional assistance with entity setup, FEMA compliance, and regulatory navigation, our team supports foreign pharma companies through every stage of the India entry process. See also our FDI advisory service for sector-specific structuring guidance.
Key Takeaways
- 100% FDI is permitted via automatic route for greenfield pharma manufacturing; brownfield acquisitions are capped at 74% automatic with government approval beyond
- Drug manufacturing licences (Form 25/28) are issued by State Drug Licensing Authorities after joint inspection — process takes 3-6 months
- Foreign manufacturers must appoint an authorised Indian agent to apply for CDSCO import registration (Form 41) and import licence (Form 10) — they cannot apply directly
- Registration Certificate (Form 41) costs USD 10,000 per drug with an additional USD 25,000 if facility inspection is required, and is valid for three years
- The SUGAM 2.0 portal is mandatory for all CDSCO submissions — choose a competent Indian agent as they control the portal access and submission quality
Frequently Asked Questions
Can a foreign pharma company directly apply for a drug import licence in India?
No. Foreign manufacturers must appoint an authorised Indian agent who holds a valid wholesale drug licence (Form 20B/21B) in India. The Indian agent submits all applications on the SUGAM portal, manages regulatory correspondence, and serves as the responsible party for regulatory compliance within India.
What is the difference between Form 41 and Form 10 in the CDSCO process?
Form 41 is the Registration Certificate that registers the foreign manufacturing premises and specific drugs with CDSCO — it is a prerequisite. Form 10 is the actual Import Licence that authorises the import of those registered drugs into India. You need Form 41 first, then apply for Form 10. Both are valid for three years.
What is the FDI limit for pharmaceutical manufacturing in India?
For greenfield projects (new manufacturing facilities), 100% FDI is permitted under the automatic route with no government approval needed. For brownfield projects (acquiring existing Indian pharma companies), FDI up to 74% is automatic, and beyond 74% requires government approval from the Department of Pharmaceuticals, which typically takes 10-12 weeks.
How much does CDSCO import registration cost for a foreign manufacturer?
The registration fee is USD 10,000 per drug (or INR equivalent), with INR 1,000 for each additional drug. If CDSCO requires a physical inspection of the foreign manufacturing premises, the inspection fee is an additional USD 25,000. These fees are borne entirely by the applicant.
How long does it take to get a drug manufacturing licence in India?
The drug manufacturing licence (Form 25) process typically takes 3-6 months from application to grant. This includes documentation review, joint inspection of manufacturing premises by central and state drug inspectors, resolution of any inspection findings, and final licence issuance. The timeline assumes the facility is already built and equipped.
Does a foreign pharma company need clinical trials in India for an already-approved drug?
Not necessarily. Under the New Drugs and Clinical Trials Rules, 2019, drugs with extensive global approval and safety data may be granted a clinical trial waiver or require only a bridging study. However, drugs with limited global approval history or those in novel therapeutic categories may require Phase III clinical trials in India before marketing approval is granted.
What is Schedule M and why does it matter for foreign manufacturers?
Schedule M of the Drugs and Cosmetics Act prescribes India's Good Manufacturing Practice (GMP) standards for pharmaceutical manufacturing. Compliance with Schedule M is mandatory for obtaining a drug manufacturing licence. The standards have been progressively aligned with WHO GMP requirements, and foreign companies accustomed to US FDA cGMP or EU GMP will find them broadly consistent, though India-specific documentation requirements must be met.