CDSCO Loan License Registration in India

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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  • Assistance with documentation, agreements, and regulatory filings
  • Guidance for drug and medical device manufacturing compliance
  • Coordination with State and Central Licensing Authorities
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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.

What Is a CDSCO Loan License?

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:

  • Rule 75A and Form 28 of the Drugs and Cosmetics Rules, 1945 for pharmaceutical drugs
  • Rules 21, 22, 23, 24, 25, and 29 of the Medical Devices Rules, 2017 for medical devices

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.

Who Needs a Loan License?

For Drug Manufacturing

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:

  • New pharmaceutical companies entering the market
  • Small businesses wanting to launch their own medicine brand
  • Entrepreneurs doing third-party or contract manufacturing
  • Companies that want to expand their product range without building a new plant
  • Research organizations wanting to commercialize a drug formula

For Medical Device Manufacturing

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:

  • Startups designing medical devices without a factory
  • Importers who want to shift to local manufacturing in India
  • Companies outsourcing full or partial production of devices
  • Research institutions commercializing new medical technologies

Which Sectors and Products Require a Loan License?

Pharmaceutical Drugs

Loan Licenses for drugs cover the following categories:

  • General drugs (non-biological): Tablets, capsules, syrups, ointments, injections, and other formulations that are not listed under Schedule C, C(1), or X of the Drugs and Cosmetics Rules
  • Biological drugs: Drugs containing biological products like serums, vaccines, vitamins, and adrenaline these fall under Schedule C of the Drugs and Cosmetics Rules
  • Schedule X drugs: These are narcotic and psychotropic substances and require separate, stricter permissions

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

Medical devices are divided into four classes based on risk:

  • Class A: Low risk devices bandages, thermometers, tongue depressors
  • Class B: Medium-low risk devices syringes, blood pressure monitors
  • Class C: Medium-high risk devices lung ventilators, bone fixation plates
  • Class D: Highest risk devices pacemakers, heart valves, HIV test kits

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.

Types of Loan Licenses and Applicable Forms

For Drugs (Under Drugs and Cosmetics Rules, 1945)

PurposeApplication FormLicense Form
Non-biological drugs (not in Schedule C, C1, X)Form 24AForm 25A
Biological drugs (Schedule C and C1, excluding Schedule X)Form 27AForm 28A

For Medical Devices (Under Medical Devices Rules, 2017)

Device ClassRisk LevelApplication FormLicense FormAuthority
Class A & BLow to MediumForm MD-4Form MD-6State Licensing Authority (SLA)
Class C & DHigh to HighestForm MD-8Form MD-10Central Licensing Authority (CLA) / CDSCO

Eligibility Criteria

For Drug Loan License

To be eligible for a drug manufacturing Loan License in India, the applicant must meet these conditions:

  • The applicant (Loanee firm) must be a legally registered business either a Private Limited Company, LLP, Partnership Firm, or Proprietorship
  • The applicant must not own a manufacturing unit but must have a valid agreement with a licensed Host manufacturer
  • The Host manufacturer must already hold a valid drug manufacturing license under Form 25 or Form 28
  • The Host facility must comply with Good Manufacturing Practices (GMP) as per Schedule M of the Drugs and Cosmetics Rules
  • The Host facility must have qualified technical staff such as a registered pharmacist or a person with a degree in pharmacy, science, or chemistry
  • The products applied for must not be restricted under Schedule C, C(1), or Schedule X through the regular Loan License route

For Medical Device Loan License

  • A legal contract must exist between the Loan License holder and the manufacturing facility
  • The Host manufacturing facility must hold a valid manufacturing license for the same device class
  • Qualified and competent technical staff must be available to supervise production and testing
  • A proper Quality Management System (QMS) must be in place at the facility ISO 13485 certification is strongly recommended and often required
  • All testing, calibration, sterilization, and safety procedures must comply with CDSCO and Medical Devices Rules, 2017 guidelines
  • The Loan License holder takes full legal responsibility for regulatory compliance and product approvals

Documents Required for Drug Loan License

Documents from the Loanee Firm

  • Aadhaar Card and PAN Card of all directors, partners, or proprietors
  • GST Registration Certificate
  • Signed Loan License Agreement with the Host manufacturer
  • Filled application form (Form 24A for non-biological drugs or Form 27A for biological drugs)
  • Cover letter addressed to the State Drug Licensing Authority explaining the intent and details of the application
  • Declaration of all proprietors, partners, or directors (Affidavit format)
  • Proof of residential address (Aadhaar, Ration Card, or Passport)
  • Declaration of technical personnel involved in production
  • Details of any previously issued Loan Licenses, if applicable
  • List of formulations applied for, along with packing details
  • Specimen labels of all products
  • Test methods for non-pharmacopeial products and ingredients

Documents from the Host Firm

  • Valid Manufacturing License (Form 25 or Form 28)
  • Technical staff qualification documents and appointment letters
  • Site Master File (SMF) detailed document covering the infrastructure, equipment, and layout of the facility
  • Stability study data for the products to be manufactured
  • Product approval copies
  • Consent letter from the Host manufacturer confirming permission to use their facility

For Medical Device Loan License

  • Filled application form (Form MD-4 for Class A & B or Form MD-8 for Class C & D)
  • Valid manufacturing license of the Host factory
  • Signed agreement between the Loan License holder and the manufacturing site
  • Site Master File or Plant Master File
  • Device Master File containing technical details, design specifications, and risk assessment report
  • Quality Management System certificates and Standard Operating Procedures (SOPs)
  • Sterilization validation report (if the device requires sterilization)
  • Essential Principles Checklist demonstrating safety and performance compliance
  • ISO 13485 certification of the manufacturing site
  • Company registration certificates, GST proof, and address proof
  • Performance evaluation report from a central medical device testing laboratory (for in vitro diagnostic devices only)

Step by Step Process to Obtain a Loan License

Step 1: Understand the Requirements

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.

Step 2: Sign the Loan License Agreement

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.

Step 3: Prepare All Documents

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.

Step 4: Submit the Application

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.

Step 5: Inspection by Drug Inspector

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.

Step 6: Address Any Queries

If the authority raises any queries or asks for additional documents or corrections, respond promptly and accurately.

Step 7: Approval and Issuance of License

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.

Step 8: Post-License Compliance

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.

Step by Step Process to Obtain a Medical Device Loan License (Class A & B)

Step 1: Online Registration

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.

Step 2: Submit Form MD-4

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.

Step 3: Document Examination and Site Verification

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.

Step 4: Grant of License in Form MD-6

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.

Step by Step Process to Obtain a Medical Device Loan License (Class C & D)

Step 1: Login and Application Filing

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.

Step 2: Submit Form MD-8

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.

Step 3: Audit and Inspection by CDSCO Officers

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.

Step 4: Grant of License in Form MD-10

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.

Benefits of a Loan License

Reduced Capital Investment

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.

Faster Market Entry

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.

Compliance and Quality Assurance

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.

Focus on Core Business

By outsourcing manufacturing, you can focus your energy and resources on what matters most product research, branding, marketing, distribution, and growing your customer base.

Flexibility and Scalability

You can increase or decrease production volumes based on market demand without worrying about managing or expanding factory infrastructure.

Support for the Make in India Initiative

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.

Market Expansion

Companies can enter new product categories or new geographic markets quickly and cost-effectively without making large investments in new facilities.

Drug Loan License Fees (As per Drugs and Cosmetics Rules, 1945 Section 75A)

For New License

  • License Fee: ₹6,000 for up to 10 items under Schedule M and Schedule M-III
  • Inspection Fee: ₹1,000
  • Additional items: ₹300 per item beyond 10

For Renewal

  • Renewal Fee: ₹6,000
  • Inspection Fee: ₹1,500
  • Late Fee: ₹1,000 per month for delayed renewal

Medical Device Loan License Fees (Under Medical Devices Rules, 2017)

For Class A & B Devices

Fees are set by the respective State Licensing Authority and vary by state.

For Class C & D Devices

  • License Fee: ₹50,000 for one manufacturing site
  • Per distinct medical device: ₹1,000 per device
  • Retention Fee (every 5 years): ₹50,000 for one site + ₹1,000 per distinct device
  • Late retention fee: 2% per month for up to 180 days after due date

Validity and Renewal

Drug Loan License

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.

Medical Device Loan License

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.

Post-Approval Requirements

Maintain Production Records

All batch records, quality control test results, and manufacturing logs must be properly documented and kept for inspection.

Label Products Correctly

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).

Comply with GMP or MDR Standards

The Host facility must continuously maintain GMP compliance for drugs or Quality Management System compliance for medical devices.

Submit Periodic Reports

Reports to the drug or device licensing authority must be submitted as required by law.

Inform About Changes

Any change in the Host manufacturing facility, product formulation, packaging, or technical staff must be reported to the licensing authority and approved before implementation.

Penalties for Non-Compliance

Suspension of License

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.

Cancellation of License

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.

Financial Penalties and Prosecution

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.

Product Recall

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.

Late Fees

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.

Summary

FeatureDrug Loan LicenseMedical Device Loan License
Governing LawDrugs and Cosmetics Act, 1940 & Rules, 1945Medical Devices Rules, 2017
Authority (Low Risk)State Drug AuthorityState Licensing Authority (SLA)
Authority (High Risk)State Drug AuthorityCDSCO (CLA)
Application FormForm 24A / Form 27AForm MD-4 / Form MD-8
License FormForm 25A / Form 28AForm MD-6 / Form MD-10
Validity5 YearsPermanent (retention fee every 5 years)
Base License Fee₹6,000₹50,000 (Class C & D)
Online PortalState FDA portalCDSCO SUGAM Portal
QMS RequirementGMP (Schedule M)ISO 13485 aligned QMS

Need Help with CDSCO Loan License?

Expert Assistance for Smooth Approval Process

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.

End-to-End Support for Your Business

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.

Contact Us for Consultation

📞 Call: 8796104190
📧 Email: support@psrcompliance.com

Written by

Raju Karn

Raju Karn

SEO Team Lead · PSR Compliance

5+ Years Experience

Raju Karn has 5+ years of experience writing compliance content covering CPCB, CDSCO, BIS, EPR, FSSAI, WPS, PESO and various small and large business registrations, licenses and certifications across India.

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Frequently Asked Questions

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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