Licenses Required Opening a Drugstore in India

Narendra Kumar

25 Oct, 2022

A drugstore or a pharmacy is a shop that sells medicines and drugs as per doctor prescriptions, over-the-counter, cosmetics, toiletries and other such products. To run the pharmacy, it is mandatory to have an experienced pharmacist on board.

If you are qualified with a requisite diploma/masters in pharmacy and have relevant experience of working as a druggist or pharmacist and you are contemplating starting your own work, then opening a drugstore is the right thing to do. Or as an entrepreneur you wish to diversify and start a drugstore then it is just the right business to invest into.

Medicines will always be required by human beings as long as civilization exists. That is the reason why there is a surge of hospitals, medical professionals, and pharmacists all around. One important factor to keep in mind while starting one’s own pharmacy is the location of the store and the kind of investment that one is ready to do. One can partner with a hospital and start a hospital pharmacy; have a stand-alone or chain pharmacy or a drugstore at a housing society, commercial complex, etc.

What are the Pharma Industry Forecasts in India?

It has been forecasted that by 2020 India will be amongst the top 6 nations of the world in terms of demand for pharmaceutical devices, medicines, and drugs. With growing medical insurance and enhanced medical facilities in the country, not to forget the growing population of the country, the prediction is bound to realize.

The Indian pharmaceutical industry’s growth rate in the last financial year was recorded at 5.5%.   By 2020, the industry is expected to be worth USD 55 billion as against USD 27.57 billion in 2016. The CAGR of the industry is believed to touch 15.92% by 2020.

As is evident, the industry is expected to double up in the next two years; this is one investment that is worth a try.

What are the Mandatory Licenses Required for Starting a Drugstore?

1. At the onset, register your drugstore as a Sole proprietorship firm, a Partnership firm, a One Person Company, a Limited Liability Partnership or a Private Limited Company.
2. For Limited Liability Partnership or a Private Limited Company registration, an appropriate name is to be reserved with the Ministry of Corporate Affairs. The application for the Certificate of Incorporation from the Registrar of Companies is to be submitted.
3. Apply online for registration under the Goods and Services Tax. The Identification Number is a unique 15-digit number and remains valid throughout the life cycle of the business.
4. Apply for Trade License. This is a permission by the licensing department of the local authorities to the business entity to carry on the trade or business at its place of location. It is a method of regulating business in a particular area by the State/Local
5. Registering with the Chief Inspector for a Shop and Establishment Act License as per the Shop and Establishment Act, 1948. The application needs to have details like the employer’s name, name, and address of the unit, category of the establishments, number of employees, etc. The registration certificate once received must be displayed notably in the shop. This license needs to be renewed on a regular basis.
6. One of the most important licenses that need to be procured on a mandatory basis to start a drugstore is the Retail Drug License (RDL) issued by the State Drugs Control Organization. The main criteria for obtaining this license are:-
   1. The chemist shop needs to be a minimum of 10 square meter and above.
   2. The medicines need to be stored under proper refrigerated temperatures with suitable air-conditioning in the premises.
   3. The person heading the operations of the shop needs to be a qualified registered pharmacist with adequate experience. As long as the shop is open, the qualified person needs to be around for supervision.

The mandatory documents that need to be submitted while applying for the license under the Drugs and Cosmetics Act, 1940 are:-

• Key plan of the premises
• Site plan for the premises
• Ownership proof or Rent/Lease Agreement with a NOC from the owner.
• MOA/AOA/Partnership Deep/Incorporation Certificate
• An affidavit of non-conviction of the owners/partners
• Affidavit of the registered pharmacist along with appointment letter of the person and his resume.