Under the flagship programs of Make in India and Self-Reliant India (Aatm Nirbhar Bharat), India aims to extend its footprint in the global supply chain and become a hub for manufacturing activities. To further incentivize indigenous manufacturing, India is offering a host of policy impetus, discounts, subsidies, skill enhancement programs, and much more.
Out of the various categories, Pharma manufacturing is a sunrise segment, that has the potential to grow vigorously in foreseeable future. India already has a large pharma market sized at USD 46.8 billion in FY 21. Out of this, domestic retail is valued at USD 22.4 billion, while the remaining comprises export activities. The country is a leading player in the global generics market and is aggressively venturing into other categories such as API, biosimilars, diagnostic devices, biotechnology, etc.
To further support domestic manufacturing, India has also announced a lucrative PLI scheme of over USD 2 billion for the pharma sector, which will be distributed over 8 years (FY 21 to FY 29.). Research suggests that the PLI scheme will result in an incremental export of USD 29 billion.
The inherent potential in pharma manufacturing makes India a fertile ground for new manufacturers and entrepreneurs. Already there are around ~ 3000 manufacturers in India and the volume is expected to grow manifold.
To learn more about India’s growing pharma and healthcare sector, one can read couple of our earlier analyses
Meanwhile, it is also important for businesses and individuals, who are contemplating starting a pharma manufacturing unit to have complete knowledge of the process to start a pharma manufacturing company in India.
In this post, we will discuss in detail the various facets of starting a pharma manufacturing company in India. While the post will give stepwise guidance on starting a pharma manufacturing in India
Firstly, businesses should conduct a preliminary market study to learn more about the sector. They should have a strong understanding of the sector and gauge its performance in recent years. Comprehensively carrying out the market research will guide them move in the right direction for starting the business.
Preliminary Market Study
Initial Step of Setting up a Pharma Manufacturing Plant
Businesses need to identify a distinct name for the manufacturing company that should be attractive and relevant.
After deciding on a name, individuals need to select the type of manufacturing company they want to open. Types of pharma manufacturing companies include Branded Pharma Manufacturing, Generic Pharma Manufacturing, Pharma Export Company, Derma Medicines & Products Manufacturing Company, Hospital Supply Manufacturing Company, etc.
Once the category of production is identified, businesses should search, assess, and choose a prominent space for production. The manufacturing premise should not just have sufficient space for the production process but also raw material storage section, quality control section, storage areas for finished goods, etc. Likewise, they should also have space for office and other administrative work along with storage capacity for rejected chemicals and drugs.
Manufacturing Plant Registration Process
After deciding on the type and nature of a pharma manufacturing company individuals need to start with the legal procedure. Companies need to get registered with the companies registrar under the Companies Act, 1956, or Companies Act, 2013.
We are not going to discuss much on general company registration in India. We have already written a few posts on the topic and one can read them to know a bit more about them.
Micro, Small, and Medium Enterprises or MSME registration is optional for factories and manufacturing companies. The MSME certificate provides several benefits as they will easily get loans under priority sector lending and they will also pay less interest on loans, and will also get benefits of exemption under tax laws, and much more. Small, Medium, or Micro entities get environmental clearances and they benefit by registering for MSME certificates. This certificate can either be provisional or permanent. However, individuals starting the pharmaceutical industry are advised to apply for the provisional certificate, especially if they are opening a new manufacturing unit or factory. Under the MSME Act the manufacturing enterprise status are as follow:
Approval of the Manufacturing Layout
Individuals looking to set up a pharma manufacturing factory in India need to abide by a set of terms, rules, and regulations. This has been mandated to ensure safe, quality, and pure formulations of drugs, and the requirements may vary from state to state. To obtain a manufacturing license individuals need to fulfill the following steps:
Licensing of Pharma Manufacturing Plant
Pharma manufacturing plant needs to obtain Drug and Cosmetic manufacturing license that is provided by the Foods and Drugs Administration. The license should be approved by the Central Licensing Approving Authority i.e. Drug Controller General of India. Individuals seeking licenses need to make necessary payments through a bank challan.
Assets required for starting pharma manufacturing company
Vital Documents Lists
How India Watch can help?
The India watch is an India-based research and consulting house, which helps indigenous and international business to set-up, grow, and evolve in the Indian market. Alongside host of other sectors, we work with pharma and healthcare companies and offer them custom research and consulting solutions. Our services include,