What Licenses are Needed for Starting a Cosmetic Business in India?

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What Licenses are Needed for Starting a Cosmetic Business in India?

The art of wearing makeup was invented by the ancient Egyptians approximately 12,000 years ago. They had the opinion that make up was next to godliness and that it appealed to the Gods. Both men and women of all social classes would wear make up. For past few centuries, wearing make up was viewed as a feminine thing so many men refrained from doing it, but in 21st century, many men wear just as much make up as the women. Make up brands have been profiting more than ever in this era. In 2024, wearing makeup has become an expression of individuality and confidence. The revenue in the Cosmetics market in India is estimated to reach US$6.45bn this year. This market segment is expected to witness an annual growth rate of 2.86% (CAGR 2024-2028). Therefore, starting a cosmetic business in India can turn out really well.

In order to start cosmetic business, it is necessary to fulfill all the legal requirements. A

manufacturer or importer must comply with the legal requirements to start a cosmetic business. It is mandatory for cosmetic manufacturers and importers to obtain a cosmetic manufacturing license and importing license for cosmetic business. The cosmetic registration is regulated by the The Drugs and Cosmetics Act, 1940 (‘Act’) and the Drugs and Cosmetic Rules, 1945 (‘Rules’).

Definition of Cosmetics

According to the Drugs and Cosmetics Act, 1940 (‘Act’), cosmetics are articles which are meant to be used on human skin. Section 3 (aaa) of this Act defines cosmetics as an article which is applied, poured, rubbed, sprayed, sprinkled or introduced to a person so as to promote attractiveness, beautify, cleanse or alter their appearance. Additionally, the Act also includes any article meant for use as a component of cosmetic.

Licenses Required

Manufacturing of cosmetics is regulated by the state licensing authorities appointed by the respective state governments. These authorities are also the licensing authorities for manufacturing license for cosmetics. For the import of cosmetics, the central licensing authority is appointed by the Central Government. The Central Licensing Authority is known as Central Drugs Standard Control Organization (CDSCO) of the Government of India and it is responsible for issuing the importing license. Drugs Controller General of India (DCGI) is the head of department of CDSCO.

Manufacturing license

For an individual or an entity that wants to manufacture cosmetics, it is mandatory to obtain the manufacturing license.

• Manufacturing License to manufacture cosmetics for sale or for distribution: A manufacturer can obtain a manufacturing license to manufacture cosmetics for sale or for distribution (Form 32) by applying Form 31 (application for grant of license to manufacture cosmetics for sale or distribution) with the licensing authority appointed by the state government. To obtain a license to manufacture up to 10 items of each category of cosmetics listed in Schedule MII of the Rules, the manufacturer is required to submit an application. A licensing cost of Rs. 2,500 and an inspection charge of Rs. 1,000 for each inspection must be submitted along with the application. 

• Loan License for manufacturing cosmetics for sale or distribution: A manufacturer can seek for issuance of loan license for manufacturing cosmetics for sale or distribution (Form 32-A) by applying Form 31-A, which is the application for grant of loan license to manufacture cosmetics for sale or distribution, with the licensing authority appointed by the state government. A manufacturer may apply for a loan license to produce up to 10 items of each category of cosmetics listed in Schedule MII of the Rules for sale. Along with the application, a licensing cost of Rs. 2,500 and an inspection charge of Rs. 1,000 for each inspection must be submitted.

• Approval License for carrying out tests on cosmetics and raw materials:

In order to conduct tests on cosmetics and the raw materials used in their production on behalf of licensees for manufacturing for the sale of cosmetics, a manufacturer must seek for an approval license by applying Form 37. The manufacturer must submit Form 36 to the state licensing authority (application for grant of approval for conducting out tests on cosmetics used in the manufacture on behalf of licensees for manufacture for sale of cosmetics). For cosmetic testing, the application must be submitted with a 1,500 rupee inspection charge. The validity of this license is for five years from the date of issuance.

The documents required to apply for a manufacturing license are mentioned below:

• Form of declaration
• Bio-data form
• Key and site plan’s blueprint 
• Manufacturing premises’ ownership proof
• Proof of registration or incorporation of the entity 
• Certified copy of registration certificate of Pharmacy Council of India, experience certificate of the registered pharmacist or competent person and their qualification certificates
• Affidavit regarding a registered pharmacist or competent person regarding full time working with the firm duly attested by a Notary public
• Appointment letter of the registered pharmacist or competent person in charge
• Downloaded PDF of the filled application form (Form 31, 31-A or 36)
• Affidavit regarding non-conviction of partners, proprietor or directors under the Act

Importing license

It is mandatory to apply for the cosmetic importing license for individuals or entities that do not want to manufacture the cosmetic but want to import and resale cosmetic products in India. To obtain importing license, it is necessary to apply Form 42, which is an application for the issue of importing license which enables individuals and entities import of cosmetics for the purpose to selling. The application is sent to the central licensing authority for the issuance of importing license. The approval for importing cosmetics into India from other countries is issued in Form 43. The application should be submitted along with a fee of USD 250. The validity of the importing license for cosmetic products is 3 years from the date of issue. 

The following people are eligible for obtaining the license or certificate for import of cosmetic products:

• Manufacturer whose office is registered in India
• Manufacturer’s Authorized agent
• Subsidiary of the Manufacturer
• Any other importer

The documents required to apply for importing license are the following:

• Importer’s covering letter
• Original copy of Power of Attorney which shows the importer and manufacturer’s connection
• No Objection Certificate from the Pollution Control Board
• Laboratory Equipment list
• Premises’ Layout Plan
• Free Sale certificate / Manufacturing license / Marketing authorization letter
• In case of rented premises, rental agreement to be included
• List of machines installed for manufacturing (if any)
• Copy of the product’s label
• Downloaded PDF filled form 42 
• Schedule D III signed by the manufacturer or authorized agent
• Product specification and testing protocols

Guidelines for Cosmetic Products:

The following are the guidelines on registration of import of cosmetics products published by Central Drugs Standard Control Organisation (CDSCO) under the Ministry of Health and Family Welfare:

• Guidelines regarding Brand – A “Brand” for the purpose of the Drugs & Cosmetics Rules, 1945 will mean each category of cosmetic products as mentioned in Column 3 of the list of categories in the Lists of Cosmetic Products table.
• Guidelines regarding Fee Payment – Each application form must be submitted along with a fee of USD 250 or its equivalent Indian rupees for each Brand for each category of cosmetics which are mentioned in table’s Column 3.
• Guidelines regarding an existing valid Registration Certificate – If the applicant wants to include any further brand or product of an already registered category that is mentioned in Column 3 of the table for the same manufacturer, they have to submit a separate application. This does not require submitting any additional fee. In such cases, additional product permission will be given to the already approved category in a given Registration Certificate.
• Guidelines regarding the Power of Attorney – The authorization by a manufacturer to his authorized agent in India has to be documented by a Power of Attorney. The document should mention the list of the names of all cosmetic products along with their trade names, brand as per the table’s Column 2. It should also clearly highlight all the variants, for instance, color, shades, pack sizes, etc. Additionally, the name of the cosmetics should be like the ones that are mentioned in Form 42.

List of Cosmetic Products

Source: Ministry of Health & Family Welfare

Conclusion

The revenue in the Cosmetics market in India is estimated to reach US$6.45bn this year. This market segment is projected to experience an annual growth rate of 2.86% (CAGR 2024-2028). Therefore, starting a cosmetic business in India can turn out really well. If you’re interested in CDSCO registration and want to obtain cosmetic licenses: Manufacturing License and/or Importing License, connect with Registrationwala now!

Frequently Asked Questions (FAQs)

Q1. What is the definition of Cosmetics according to the Drugs and Cosmetics Act, 1940?

A. According to the Drugs and Cosmetics Act, 1940 (‘Act’), cosmetics are articles which are meant to be used on human skin. Section 3 (aaa) of this Act defines cosmetics as an article which is applied, poured, rubbed, sprayed, sprinkled or introduced to a person so as to promote attractiveness, beautify, cleanse or alter their appearance. Additionally, the Act includes an article meant for use as a component of cosmetics.

Q2. Which licenses are required for cosmetic business?

A. It is mandatory for the cosmetic manufacturers or cosmetic importers to obtain a cosmetic license and manufacturing license before they initiate the cosmetic business. 

Q3. How long is the Manufacturing License valid?

A. Manufacturing License is valid for 5 years.

Q4. How long is the Importing License valid?

A. This License is valid up to 3 years from the date.

Q5. What is CDSCO?

A. The Central Drugs Standard Control Organisation is India's national regulatory body for cosmetics, pharmaceuticals and medical devices.

Q6. Who is the Drug Controller General of India?

A. Since 1st February 2023, Dr. Rajeev Singh Raghuvanshi works as the Drug Controller General of India under CSDCO.

Q7. Where is the Head Office of CDSCO?

A. Its head office is located at FDA Bhawan, Kotla Marg, ITO, Mandi House, New Delhi - 110002.

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