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Get expert assistance for obtaining a CDSCO Loan License for drugs and medical devices in India. We manage documentation, coordination with authorities, and compliance to help you start manufacturing legally and efficiently.
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Many businesses and entrepreneurs in India want to manufacture drugs or medical devices but do not own a factory or production unit. Setting up a manufacturing plant costs crores of rupees, takes years to build, and requires passing strict government inspections before a single product can be made. This is a huge barrier, especially for startups, small companies, and new entrepreneurs who have great product ideas but limited money and space.
The good news is that the Indian government has a legal solution called a Loan License. Under this system, a company that does not own a manufacturing facility can legally produce drugs and medical devices by borrowing the approved facility of another licensed manufacturer. The Central Drugs Standard Control Organisation (CDSCO) and State Drug Licensing Authorities oversee this entire process. With a Loan License, you can enter the pharmaceutical or medical device market faster, at lower cost, and with full legal compliance without owning a single machine or factory floor.
A Loan License is a legal permission granted by the drug regulatory authority that allows a person or company (called the Loanee) to manufacture drugs or medical devices at the facility of another licensed manufacturer (called the Host or Loanor). The Loanee does not own the factory. Instead, they use the Host's building, machines, and trained staff to produce their products under their own brand name.
This concept is established under:
The Loan License holder is fully responsible for the quality, safety, and effectiveness of the products manufactured, even though they do not own the factory.
Any individual or company that wants to manufacture pharmaceutical drugs for sale or distribution in India but does not own a manufacturing unit needs a Loan License. This includes:
Any business that wants to manufacture medical devices but lacks its own certified production unit needs a CDSCO Loan License for Medical Devices. This includes:
Loan Licenses for drugs cover the following categories:
Note: Loan Licenses are generally not issued for drugs listed under Schedules C, C(1), and X through the standard process. Separate application forms exist for these categories.
Medical devices are divided into four classes based on risk:
All four classes can be covered under a Loan License, but the authority that grants the license and the forms used are different for each class.
To be eligible for a drug manufacturing Loan License in India, the applicant must meet these conditions:
First, identify whether you need a Loan License for non-biological drugs (Form 24A) or biological drugs (Form 27A). Identify a suitable Host manufacturer who already holds a valid manufacturing license and is willing to give you permission to use their facility.
Prepare and sign a formal Loan License Agreement with the Host manufacturer. This agreement defines the terms of use of the facility, responsibilities of both parties, quality control arrangements, and financial terms.
Gather all the documents listed above both from your own firm and from the Host manufacturer. Ensure the Site Master File, technical staff documents, and product list are complete and accurate.
Submit your filled application form along with all supporting documents to the State Drug Control Authority (State FDA) of the state where the Host manufacturing facility is located. Pay the prescribed government fee at the time of submission.
After submission, a Drug Inspector will visit the Host manufacturing facility. The inspection checks for compliance with GMP standards, hygiene, equipment condition, quality control systems, and the qualifications of technical staff.
If the authority raises any queries or asks for additional documents or corrections, respond promptly and accurately.
Once the authority is satisfied with all documents and the inspection report, they will issue the Loan License Form 25A for non-biological drugs or Form 28A for biological drugs.
After receiving the license, maintain production records, submit periodic reports to the drug authority, follow proper labeling norms, and comply with all GMP standards throughout the life of the license.
Register your business on the CDSCO SUGAM online portal. Upload all company details, team information, and required documents. The portal will issue login credentials for tracking the application.
Fill and submit Form MD-4 with complete technical details of the medical device, the signed agreement with the Host manufacturing site, QMS documents, device design details, and risk analysis reports.
The State Licensing Authority (SLA) reviews all uploaded documents. Officials may visit the manufacturing facility to check hygiene, calibration records, testing labs, storage systems, and equipment maintenance.
Once the SLA is satisfied with compliance, the Loan License is granted in Form MD-6, allowing manufacture, sale, and supply of Class A or B medical devices from the approved Host facility.
Log into the CDSCO SUGAM portal. Submit the legal contract confirming the manufacturing arrangement. Enter full details of product testing, performance studies, and risk classification.
Upload Form MD-8 along with the complete Device Master File, sterilization validation data, biological safety reports, national and international compliance certificates, and QMS documentation aligned with ISO 13485 and Medical Devices Rules, 2017.
CDSCO officers conduct a full site inspection within 60 days of application. This covers cleanroom design, sterilization systems, material traceability, packaging integrity, electronic records, and overall manufacturing quality. High-risk devices require a very thorough check.
After all safety checks are cleared, CDSCO grants the Loan License in Form MD-10, legally permitting the manufacture, distribution, and sale of Class C and D medical devices in India.
You do not need to spend crores of rupees to build and equip a manufacturing plant. Using a licensed Host facility saves massive upfront costs and makes pharmaceutical entrepreneurship accessible to smaller players.
Since the Host facility is already approved and operational, you can start producing and selling your products much faster compared to setting up your own unit from scratch.
Products are manufactured in a facility that already complies with GMP (for drugs) or ISO 13485 and CDSCO standards (for medical devices), ensuring high product quality and reducing the risk of regulatory rejection.
By outsourcing manufacturing, you can focus your energy and resources on what matters most product research, branding, marketing, distribution, and growing your customer base.
You can increase or decrease production volumes based on market demand without worrying about managing or expanding factory infrastructure.
Loan Licenses encourage domestic manufacturing, reduce dependence on imports, and help grow India's pharmaceutical and medical device sector by enabling more companies to participate in production.
Companies can enter new product categories or new geographic markets quickly and cost-effectively without making large investments in new facilities.
Fees are set by the respective State Licensing Authority and vary by state.
A drug Loan License is valid for 5 years from the date of issue. Renewal must be applied for before the expiry date. The renewal process involves submitting a renewal application with updated documents, paying renewal fees, and undergoing a fresh inspection if required.
A medical device Loan License issued under Form MD-6 or Form MD-10 remains valid permanently it does not expire automatically. However, the license holder must pay a retention fee every 5 years to keep the license active. If the retention fee is not paid within 180 days after the due date, the license is automatically cancelled. Any change in the manufacturing facility, ownership, or equipment setup must be reported to CDSCO and approved before the change is implemented.
All batch records, quality control test results, and manufacturing logs must be properly documented and kept for inspection.
Every product label must clearly mention the name and address of the Loan License holder as well as the name and address of the manufacturing site (Host facility).
The Host facility must continuously maintain GMP compliance for drugs or Quality Management System compliance for medical devices.
Reports to the drug or device licensing authority must be submitted as required by law.
Any change in the Host manufacturing facility, product formulation, packaging, or technical staff must be reported to the licensing authority and approved before implementation.
The licensing authority can suspend your Loan License if it finds that your products do not meet quality or safety standards, or if the Host facility fails an inspection.
Your license can be permanently cancelled if you repeatedly violate GMP or MDR norms, if you fail to pay renewal or retention fees within the permitted grace period, or if you make unauthorized changes to the manufacturing site or product without informing the authority.
Manufacturing or selling drugs without a valid license, or manufacturing adulterated or misbranded drugs, is a criminal offence under the Drugs and Cosmetics Act. Penalties include fines and imprisonment of up to 10 years depending on the nature and severity of the offence.
If a product is found to be substandard, adulterated, or dangerous, the authority can order an immediate recall of all batches from the market, causing significant financial and reputational damage.
For medical device licenses, failing to pay the retention fee on time attracts a late fee of 2% per month for up to 180 days. After 180 days, the license is automatically cancelled.
Get professional guidance for obtaining a CDSCO Loan License for drugs and medical devices in India. Our compliance experts assist you throughout the entire process—from selecting the correct forms and preparing documentation to coordinating with the Host manufacturer and ensuring successful approval from CDSCO or State Licensing Authorities.
We help you reduce delays, minimize rejection risks, and ensure full compliance with Drugs and Cosmetics Rules, 1945 and Medical Devices Rules, 2017 so you can focus on launching and scaling your product in the market.
📞 Call: 8796104190📧 Email: support@psrcompliance.com
A regular manufacturing license is issued to a company that owns its own factory. A Loan License is issued to a company that uses another licensed manufacturer's factory. Both allow legal production and sale of drugs or devices, but the Loan License involves a formal borrowing arrangement with a Host manufacturer.
For drugs and Class A & B medical devices, the State Drug Licensing Authority (State FDA) of the state where the Host facility is located grants the license. For Class C & D medical devices, CDSCO (the Central Licensing Authority) grants the license.
Yes. A Loan License can cover multiple drug formulations or medical device models, but each product or device must be specifically listed in the license. Additional products can be added later by applying for an endorsement.
No. A Loan License is valid for the state in which the Host manufacturing facility is located. If you want to manufacture in facilities across multiple states, you need separate licenses from each state's drug authority.
Yes, a startup can apply. There is no requirement for prior manufacturing experience for the Loanee firm. However, the Host facility must have fully qualified technical staff overseeing production.
The Host manufacturer provides the facility, equipment, and qualified technical staff for production. They must maintain GMP compliance at all times. However, the Loan License holder bears ultimate responsibility for the quality and safety of the products.
Yes. The trademark and product specifications belong to the Loan License holder (Loanee). The Host manufacturer produces the product according to the Loanee's formulation and specifications.
If the Host manufacturer's license is cancelled or suspended, the Loan License holder cannot continue production at that facility. They must either find a new licensed Host facility and apply for an amended license or stop production until the issue is resolved.
For drug Loan Licenses, the typical timeline is approximately one month if all documents are correct and the inspection is cleared without issues. For medical device Loan Licenses, Class C & D approvals may take longer, typically a few months due to stricter inspection requirements including CDSCO's 60-day inspection window.
ISO 13485 is strongly recommended and effectively required by CDSCO for medical device manufacturing under the Loan License system. The Host manufacturing site must follow a Quality Management System that meets the standards outlined in the Fifth Schedule of the Medical Devices Rules, 2017, which is aligned with ISO 13485.
CDSCO SUGAM (sugamapp.cdscoonline.gov.in) is the official online portal of CDSCO where all applications for medical device licenses, including Loan Licenses, are submitted. Applicants must register on this portal, upload their documents, pay fees, and track their application status online.
No. Drugs listed under Schedule X (narcotic and psychotropic substances) require special permissions and are not covered under the standard Loan License process described under Rule 75A. Separate, stricter procedures apply.
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