How to Open a Pharma Company in India: A Step-by-Step Guide for Registration and Licensing

The Indian pharmaceutical industry offers exceptional opportunities for entrepreneurs who wish to build manufacturing, distribution, marketing, or retail pharmacy businesses. However, due to its direct implication on public health, entering into the pharmaceutical business requires a clear understanding of licences, qualifications, documentation, and corporate compliance.

Most pharma companies start off by first setting up a registered entity, as this not only grants legal identity and credibility but also serves as the foundation for obtaining drug licences. Generally, many founders choose to Register a Private Limited Company when entering the pharmaceutical sector, as it provides limited liability and a structured framework, often preferred under regulatory considerations.

The following guide explains how to open a pharma company in India with clarity and structure, so that the decisions one makes can be well-informed. This ranges from choosing the right business model down to understanding the required drug licenses to confidently compiling your pharma company registration.

1. Understanding the Pharmaceutical Business in India

The initial thing when learning how to start a pharma company in India is to identify which part of the pharmaceutical supply chain you wish to operate in. Each business model has certain regulatory requirements and different cost implications.

Manufacturing Pharmaceuticals

Medicines, tablets, capsules, injections, or other formulations are manufactured by a manufacturing company either under its brand or on a contractual basis. In this model, the highest investment is required, as one has to set up a compliant facility with approved equipment, qualified personnel, and quality control systems. Besides that, regular inspections take place, and the facility has to adhere to strict compliance regarding Good Manufacturing Practices.

Pharma Marketing or PCD Franchise

A marketing company is not engaged in the manufacturing of drugs. On the other hand, it purchases the finished product from licensed manufacturers and sells under its brand. This is one of the most accessible models for new entrepreneurs because it avoids manufacturing compliance yet still allows you to build a brand.

Wholesale and Distribution

A wholesaler buys drugs in bulk and in turn sells them to pharmacies, hospitals, and other medical facilities. This model involves taking a wholesale drug licence and facilities to store drugs appropriately, maintaining temperature conditions for sensitive products.

Retail pharmacy or medical store

A retail pharmacy is meant to sell medicines directly to consumers. It needs a retail drug license and has to employ a registered pharmacist on duty.

The choice of business model is important, as this defines the type of drug license you require, the level of investment, and the qualifications required within your team.

2. Legal Registration of Your Pharma Company

After finalising your business model, the next step is to register your business entity.  Pharma company registration begins with choosing the appropriate legal structure, and our guide on how to select the right business structure for a new business will help you understand the factors that influence this decision in detail.

Common business structures

• Private Limited Company
• Limited Liability Partnership
• One Person Company
• Partnership Firm
• Proprietorship

Amongst these, many founders prefer the incorporation of a Private Limited Company since it has limited liability, enjoys better regulatory credibility, and is more robust as a corporate structure for long-term growth. Explore the advantages of a Private Limited Company to see why this structure is preferred by most first-time entrepreneurs.

Incorporation process

Company registration in India is completed through the SPICe+ form available on the MCA portal. The application combines

• Name reservation
• Incorporation
• PAN
• TAN
• Optional GST registration

Check out our comprehensive resource on how to register a company in India for a step-by-step overview of the incorporation journey.

Once your company is registered and you get the Certificate of Incorporation, you can begin setting up your licence applications with the Drug Control authorities.

3. Licences Required to Open a Pharma Company in India

Simply registering a company does not allow you to start trading or manufacturing pharmaceutical products. Since medicines directly impact public health, the sector is governed by the Drugs and Cosmetics Act, 1940 and related rules. Every business model requires specific licences before operations begin. Check out our guide on the types of business licences and permits in India to understand how different regulatory approvals apply across industries.

Manufacturing licence

• Required for producing medicines and formulations.
• Your facility must comply with GMP standards, have qualified technical staff, a quality control laboratory and an approved layout.
• Manufacturing licences are usually issued by the State Drug Control Department for most products and by CDSCO for specific categories such as biologics, vaccines or new drugs.

Wholesale drug licence (Form 20B and 21B)

• Required for distribution, stockist and wholesale businesses.
• Premises must meet storage and hygiene standards and have space for refrigeration if products require cold storage.

Retail drug licence (Form 20 and 21)

• Required for pharmacies and medical stores.
• Must employ a registered pharmacist who supervises retail sales.

Loan licence

• Allows you to manufacture products using another licensed manufacturer’s facility.
• This is a common option for small brands that want to scale without investing in a manufacturing plant.

Import and export licences

• Required if your business intends to import finished drugs or raw materials or export products.

Understanding your business model helps you determine which licence combination applies to you. Getting this step right speeds up the approval process and reduces compliance errors.

4. Qualifications Needed to Start a Pharma Company

One of the most frequently asked questions by new founders is which degree is required to open a pharmaceutical company in India. The answer depends on your role within the business.

Business owner

No specific degree is required to own a pharma company. You can be the director or proprietor without a pharmacy or medical background.

Technical or competent person

While the owner does not require a pharmacy degree, the law mandates that certain licences must be supervised by a qualified individual.

• Manufacturing licence requires technically competent staff with pharmacy, chemistry or related qualifications.
• Wholesale licence typically requires a competent person with a pharmacy degree or relevant experience as allowed under state rules.
• A retail licence requires a registered pharmacist who shall be physically present during business hours. What this means is that you can own the business, but appoint proper qualified people depending on the license that you will be applying for in order to ensure compliance and smooth approval.

In short, you can own the business without any pharmaceutical qualification, but you must appoint appropriately qualified individuals based on the licence you intend to obtain.

Manufacturing activities require technically trained staff, wholesale operations require a competent person as defined under state drug rules, and retail pharmacies must employ a registered pharmacist. This distinction exists because each licence category carries different regulatory responsibilities and oversight requirements.

5. Documents Required for Pharma Company Registration

The documents vary by state and licence type, but the following list includes the most commonly required items.

Company documents

• Certificate of Incorporation
• Memorandum and Articles of Association or LLP Agreement
• PAN and Aadhaar of directors or partners

Premises documents

• Rent agreement or ownership proof
• Latest utility bill
• Premises layout and site plan
• Photographs of the premises

Personnel documents

• Appointment letter of the competent person or pharmacist
• Qualification certificates and registration proof
• Experience certificates if required

Additional documents

• GST registration certificate
• Storage details including temperature control systems
• Proof of trademark if launching own brand

Providing complete documentation helps avoid delays during inspection and approval. For more clarity on the incorporation-related paperwork, check out our detailed article on documents required for Private Limited Company registration in India

6. Minimum Investment to Start a Pharma Company in India

The investment required to start a pharma company in India varies significantly depending on the business model, scale and regulatory requirements. Estimates from industry sources indicate a wide range, with distribution-focused models requiring lower funds and manufacturing requiring substantially higher investment.

Pharma Marketing/PCD Company

A Pharma Marketing Company or PCD franchise model usually has the lowest startup investmentamong pharma business types.
Industry guides suggest that a marketing or PCD pharma franchise can be started with an investment that includes licences, initial stock and promotional costs typically around ₹2 lakh to ₹5 lakh.
Smaller estimates even indicate that effective participation in this segment can start close to ₹1 lakh to ₹3 lakh depending on inventory levels and marketing budgets. This model is often chosen by new entrepreneurs because it avoids the high cost and regulatory complexity of manufacturing while still allowing you to build a branded business.

Wholesale/Distribution Business

Starting a wholesale distribution business generally requires more capital than a marketing company because you must stock a broader range of inventory and manage warehousing and logistics.
 Investment components typically include stock procurement, storage setup, basic fixtures and licensing costs. Industry estimates for small distribution setups range from around ₹2 lakh to ₹5 lakh for basic stock and infrastructure, which may increase further based on inventory value and storage requirements.

The wholesale model is frequently seen as a bridge between small marketing ventures and larger manufacturing businesses.

Retail Pharmacy or Medical Store

Opening a retail pharmacy store involves investment in shop premises, inventory, licensing and compliance costs. Reports vary, with typical expectations for a standalone retail pharmacy investment generally starting from around ₹10 lakh to ₹20 lakh depending on location, rent and product inventory. Indian business guides also suggest that medical store setups often require careful capital planning because upfront costs vary with scale and product range.

Small-Scale Manufacturing Unit

The reason pharmaceutical manufacturing is the most capital-intensive business model is because of high costs due to equipment, factory setup, quality control labs, qualified staff, regulatory compliance, and GMP requirements. Sources say that even basic small-scale manufacturing setups may need investment starting from several lakhs to multiple crores, depending on facility size, product type, and machinery involved. Actual costs in starting a manufacturing business vary greatly, and industry practitioners in the field often indicate that substantial capital is required in infrastructure and ongoing compliance.

7. Step-by-Step Process to Open a Pharma Company in India

This step-wise structure helps founders navigate the entire pharma company registration process clearly.

Step 1: Choose your business model

Decide whether you want to manufacture, distribute, market or retail pharmaceutical products. Your licence path depends entirely on this step.

Step 2: Register your company

Incorporate a Private Limited Company or LLP using SPICe+. Obtain PAN, TAN and GST registration if applicable.

Step 3: Identify and prepare your premises

Premises must meet minimum area, ventilation, cleanliness and storage requirements. Manufacturing units must align with GMP guidelines.

Step 4: Appoint qualified personnel

Hire a pharmacist or technically qualified person as required by the licence specification. Their documents must be submitted with the application.

Step 5: Prepare documents

Compile company documents, identity proofs, premises layout, qualification certificates, storage details and photographs.

Step 6: Apply for drug licences

Submit your application to the State Drug Control Department or CDSCO depending on the category. Provide fees and supporting documents.

Step 7: Inspection by authorities

Officials inspect the premises to verify space, hygiene, storage, equipment and staff qualifications.

Step 8: Receive licence approval and start operations

Once approved, you may begin manufacturing, distributing or selling medicines as per the scope of your licence.

This structured process ensures you meet legal requirements before entering the market.

8. Estimated Timeline for Starting a Pharma Company

Timelines vary by licence type and state but you can expect the following:

• Company registration: around 10 to 15 working days
• Wholesale or retail drug licence: typically 4 to 8 weeks
• Manufacturing licence: several weeks to months due to more detailed inspections

Planning ahead helps founders manage operational and financial timelines effectively.

9. Common Mistakes to Avoid When Starting a Pharma Company

New entrepreneurs often face delays due to avoidable errors. Being aware of these issues helps you stay compliant from the beginning.

• Selecting the wrong licence type or submitting an incomplete application
• Hiring a pharmacist or competent person only during application rather than permanently
• Choosing premises that do not meet minimum area or storage norms
• Underestimating recurring compliance such as renewals and record keeping
• Not securing trademark protection for your pharmaceutical brand
• Ignoring cold storage requirements for temperature-sensitive products

Avoiding these mistakes protects your business from compliance risks.

Conclusion

Opening a pharma company in India is a highly promising opportunity if one is well prepared. Once you understand your business model, register your company, appoint qualified personnel, and secure the appropriate drug licences, the process becomes more predictable and doable. The pharmaceutical sector rewards founders who are diligent about compliance, documentation, and operational discipline.

Many entrepreneurs prefer Private Limited Company Registration Online at the initial stage because this structure supports compliance, offers credibility during licence applications and provides a strong framework for long-term growth in the pharmaceutical sector.

Whether it is a low-investment marketing model or a long-term manufacturing presence, clarity on licenses and regulatory expectations is, therefore, vital to create a sustainable business in the country. On the right foundation, your pharmaceutical venture will scale responsibly to meet the growing demand for quality healthcare products in India.

How LegalWiz Can Help

Launching a business in a regulated industry requires proper guidance and accurate documentation. LegalWiz assists entrepreneurs through the entire process of pharma company registration by offering end-to-end support that includes

• Choosing the right business structure as per your model
• Registering your company through a streamlined, online process
• Preparing the documents required for drug licence applications
• Ensuring compliance with state-level Drug Control Department requirements
• Helping you stay aligned with ongoing statutory and regulatory obligations

LegalWiz simplifies the legal journey so that you can focus on building your pharmaceutical brand without administrative hurdles. If you want, we can also assist with trademark registration for your pharma brand name, GST registration and drafting of commercial agreements needed for distribution or marketing operations.