INTRODUCTION

If you are reading this, you are serious about producing medications in India, even if you don't yet have a fully functional manufacturing facility. Maybe you are looking for ways to launch your pharmaceutical product with the least amount of money and operational hassle. The drug manufacturing loan licence is a clever and economical way to use another company's manufacturing facility under your own brand.

Understanding how to easily obtain such a licence with the guidance of Lawfinity is pertinent given the changing regulations, such as the recent push to streamline licensing and reduce paperwork. In this guide, you will get to know about all the queries that you are facing before starting a business as a drug manufacturing in India.

WHAT IS A LOAN LICENSE?

A loan license is an official authorization granted by the Central Drugs Standard Control Organization (CDSCO). It enables the manufacturing business or individual to produce goods. It frequently involves pharmaceutical drugs and the use of another company's manufacturing facilities.

The business that secures the top license ensures that the production process satisfies all legal standards. However, the ownership of the drugs or products usually stay with the company that holds the original license or formula.

WHO REQUIRE A LOAN LICENSE?

A loan license is required when you don't possess your own manufacturing unit but want your drug formulations to be produced elsewhere. It is a quite beneficial approach for start-ups and companies looking to minimized the investment capital in setting up their manufacturing, it is very advantageous strategy. The loan license allows them to take advantage of the infrastructure, expertise and regulatory compliance, enable them to enter the market faster and more cost-effectively.

BENEFITS OF OBTAINING A LOAN LICENSE FOR DRUG MANUFACTURING

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We must comprehend the benefits of having this before obtaining the loan licence for drug manufacturing we have to understand the advantage of having this it beneficial and avoids many unwanted issues for the manufacturing.

Capital efficiency if the company uses the existing facility under the loan licence then it helps to avoid capital investments. It will reduce the cost and make the arrangement more affordable in comparison to having own manufacturing plant. It will lower the cost and make the arrangement more affordable.
Simple market access: It helps the companies to expedite their bringing products to the market by leveraging manufacturing capabilities, enabling quicker production and distribution.
Legal compliance: By utilizing an existing facility that complies with the Drugs and Cosmetics Act, it guarantees adherence to quality standards. This lowers the possibility of regulatory obstacles as well.
Flexibility and Expandability: It provide freedom to test the new product lines without incurring significant costs. The freedom to scale production volumes in response to market demand without long-term infrastructure commitments.

WHO ISSUES SUCH LICENCE/CERTIFICATE?

Various regulatory authorities oversee the issuance:

State Drug Licensing Authority (State FDA/Controller)—handles most local and loan license matters.
Central Drugs Standard Control Organisation (CDSCO), via zonal/sub‑zonal offices and under the DCGI—handles national-level or specialized categories.

Depending on the drug category and geographic scope, you'd apply either at the state level or through CDSCO channels.

ELIGIBILITY AND DOCUMENTS REQUIRED

Eligibility basics:

The applicant must be a registered business (e.g., LLP, Pvt Ltd, etc.).
Indian entity/individuals only.
Compliance track record—depending on interpretation—like net‑worth/capital criteria. (However, note that some consultancies may overstate this or conflate licensing with financial lending requirements).
Core documents (for both loanee and host manufacturing firm).

Loanee (the business seeking to get the license):

Application form (Form 24A or 27A depending on drug category).
Cover letter and fee challan.
Loan License Agreement between parties.
Aadhar/PAN of directors, GST certificate.

Host (Licensed manufacturing unit):

Their own valid manufacturing license (Form 25, 28, etc).
Technical staff credentials, site master file, stability data, approval documents.

Other supporting documents:

Site layout / master plan / blueprint.
Infrastructure maps, quality control lab information, organizational chart, SOPs.
Proof of possession (ownership/lease deeds).
Affidavit of non‑conviction; board resolution if company.
Environmental/Fire NOCs (state-specific).

STEP‑BY‑STEP SUCH LICENCE/CERTIFICATE PROCESS

Choose drug type & choose facility: Identify your product category (allopathic, biological) and a compliant manufacturing unit that agrees to host you.
Prepare documents: Gather everything—forms, blueprints, affidavits, agreements, staff credentials, site master file.
Submit application: File with State Drug Authority using Form 24A (non-schedule C etc.) or Form 27A (Schedule C/C1).
Payment of fees: Approx ₹6,000 for up to 10 items + ₹1,000 inspection fee; ₹300 per extra item; renewal / late fees apply too.
Inspection: Drug inspector visits premises, reviews facility, credentials, agreements, records.
Grant of license: If compliant, authority issues loan license (Form 25A or 28A), along with license number.
Compliance post-license: Maintain batch records, testing logs, relabel if needed, track renewal timeline (1–5 years validity).

APPLY FOR LOAN LICENSE IN PHARMA MANUFACTURING BUSINESS

The simple procedures for applying for an Indian lending license are described here:

Step 1: Understand the prerequisites for loan licensing

To the best of our knowledge, a company seeking to manufacture pharmaceuticals at a facility licensed by another company is granted a loan license. The first step in outsourcing manufacturing is deciding who will do it for you.

Step 2: Prepare the required documentation

Form 27 for biological drugs and Form 24 for non-bio drugs are among the necessary documents that need to be prepared later. Include all of the previously mentioned supporting documentation as well, or consult experts in the field.

Step 3: Send in the application

The State Drug Control Authority, where the manufacturing facility is situated, receives the loan license application. Additionally, pay the required fee in accordance with Schedule M of the Drugs and Cosmetics Rules and the drug category.

Step 4: Authorities' Inspection

The facility will be inspected by the drug inspector to make sure that the infrastructure, equipment, and GMP standards are being followed. They also make sure that all other requirements, including those related to personnel, hygiene, and quality control, are fulfilled during the inspection.

Step 5 – Obtain Consent to Operate

The manufacturer must provide the written consent to the applicant, agreeing to the use of their premises.

Step 6 – Approval and Issuance of License

Once all the conditions are satisfied Drug Licensing Authority (DLA) grants the loan license. The license number is issued as per the under Form 25-A (non-biological drugs) or Form 28-A (biological drugs).

Step 7 – Post-License Compliance

In post license compliance, you have to maintain the production records and submit periodic reports to the authorities. Comply with product labelling and other regulatory standards.

PENALTY FOR OPERATING WITHOUT SUCH LICENCE/CERTIFICATE

Operating without a license? Risky and unlawful.

It’s a punishable offense under the Drugs & Cosmetics Act.
Consequences include seizure of products, business shutdown, hefty fines, even criminal prosecution.
Beyond legal heat, your company’s reputation can take a massive hit among regulators and consumers.

HOW LAWFINITY SIMPLIFIES SUCH LICENCE/CERTIFICATE PROCEDURE?

Here’s where Lawfinity’s human‑touch and legal-tech expertise shine—how we make the drug manufacturing loan license journey smoother:

End-to-End Documentation Handling: From form selection (24A/27A) to preparing affidavits, agreements, board resolutions, layouts—our team ensures nothing is missing or misaligned.
Regulatory Insight: We know which state authority or CDSCO zone is appropriate for your case, helping reduce procedural confusion and delays.
Inspection Readiness: We conduct pre-inspection audits—identifying gaps, rectifying SOPs, streamlining QC systems—so you sail through the official inspection.
Fee Optimization & Filing: Keeping up with exact fee structure (including extra item costs and renewal timelines), we ensure timely, accurate payments and filings.
Post‑Licence Support: Managing renewals, maintaining compliance logs, and upping your procedural bookkeeping so you stay audit‑ready always.
Human‑touch service: We keep the tone warm, answer your late-evening queries, and help you feel less lost in paperwork.

Think of us as your compliance co-pilot—reducing stress, cutting back-and-forth, and helping you focus on growth, not red tape.

MUSINGS FROM THE AUTHOR’S INK

Law and regulation can feel like a maze at times, particularly for those starting out in the pharmaceutical industry. There are stringent regulations and subtleties everywhere. However, this loan license for medicine production is really a clever lifeline for quick-thinking businesspeople, fresh companies, and innovators who lack manufacturing funding. The secret is to avoid becoming overwhelmed with paperwork. Maintain organization, show respect for the process, and collaborate with consultant like Lawfinity, who view you as an interested participant rather than a nameless form filler in the process. The truth is that every stamp and signature conceal a product that has the potential to change someone's life. Therefore, handle it with care, compassion, and curiosity because proper compliance not only earns you a license but also fosters trust.