How to Register an AYUSH Manufacturing Unit in India: A Step-by-Step Guide for 2023 | TaxRobo

The Indian wellness market is experiencing a massive surge, with the AYUSH sector leading the charge. Valued at over $23 billion, this industry represents a significant opportunity for entrepreneurs looking to tap into the growing consumer demand for traditional and natural healthcare products. For many aspiring business owners, understanding the regulatory landscape is the first major hurdle. This comprehensive blog post serves as a definitive guide, simplifying the entire AYUSH manufacturing unit registration process, from initial planning to final licensing, ensuring you can embark on your business journey with clarity and confidence.

Understanding the AYUSH Landscape in India

What is AYUSH?

AYUSH is an acronym that stands for Ayurveda, Yoga & Natropathy, Unani, Siddha, and Homoeopathy. These are traditional and alternative medicine systems that have been practiced in India for centuries. The Government of India, through the Ministry of AYUSH, has been actively promoting these systems as a reliable and effective means of healthcare. This official recognition has not only boosted public trust but has also created a structured framework for the manufacturing and sale of AYUSH products, ensuring they meet specific quality and safety standards. This focus on standardization has propelled the AYUSH industry from a niche sector to a mainstream wellness powerhouse, making it a highly attractive field for new businesses.

Why Start an AYUSH Manufacturing Unit?

The decision to start an AYUSH manufacturing unit is backed by strong market dynamics and supportive government policies. Consumer preference is visibly shifting towards natural, holistic, and chemical-free products, creating a robust and ever-expanding market for Ayurvedic and homoeopathic remedies. This demand is not limited to India; AYUSH products have a growing international market as well. Furthermore, the government actively encourages new entrants through various schemes for Micro, Small, and Medium Enterprises (MSMEs). By registering your business under Udyam, you can access benefits like subsidies, collateral-free loans, and priority in government tenders. Understanding the AYUSH industry registration steps is the crucial first move to leverage this high-potential market and build a successful and sustainable business in the wellness space.

Pre-Requisites: What You Need Before Starting the AYUSH Unit Registration Process

Before diving into the licensing and application procedures, laying a strong foundation is essential. Addressing these prerequisites will streamline your registration journey and prevent potential roadblocks. The initial phase involves making critical decisions about your business’s legal structure, securing a compliant manufacturing facility, and hiring the right technical experts. Getting these elements right from the start is fundamental to meeting the stringent requirements for AYUSH registration and ensuring a smooth operational launch.

Finalize Your Business Structure

Choosing the right legal structure for your manufacturing unit is one of the most important initial decisions. This choice will impact your liability, taxation, compliance requirements, and ability to raise funds in the future. You need to evaluate the pros and cons of each option carefully based on your long-term vision, capital investment, and risk appetite. For instance, while a sole proprietorship is easy to start, it offers no liability protection, whereas a private limited company provides limited liability but comes with higher compliance burdens.

Business Structure	Pros	Cons
Sole Proprietorship	Easy to set up, full control, minimal compliance.	Unlimited personal liability, difficult to raise funds.
Partnership Firm	Easy to form, shared responsibilities and capital.	Unlimited liability for partners, potential for disputes.
LLP	Limited liability, separate legal entity, fewer compliances than a company.	Higher setup cost than proprietorship/partnership.
Pvt. Ltd. Company	Limited liability, easy to raise funds, separate legal identity.	Higher compliance, more complex setup process.

Arrange the Manufacturing Premises

The physical location and layout of your manufacturing unit are strictly regulated under the Drugs and Cosmetics Act, 1940. Your premises must meet specific infrastructural standards to be eligible for a license. The minimum covered area required is typically 1200 square feet for manufacturing one category of drugs (e.g., Ayurvedic). If you plan to manufacture multiple categories, such as tablets, liquids, and powders, additional space will be required for each section. Most importantly, the facility must have distinct and separate areas for:

Raw Material Storage: A dedicated space for receiving and storing raw herbs and other ingredients.
Production Area: The main manufacturing section where products are processed and formulated.
Quality Control Lab: An area for testing raw materials and finished goods to ensure they meet quality standards.
Finished Goods Storage: A quarantined area for storing final products before they are dispatched.
Office and Administrative Space.

Appoint Competent Technical Staff

The government mandates the appointment of qualified technical personnel to oversee the manufacturing and quality control processes. This is a non-negotiable requirement to ensure that products are safe, effective, and manufactured under expert supervision. Your team must include at least two key individuals:

Manufacturing Chemist: A technically competent person who will supervise the production process. The qualification required is typically a degree in Ayurveda, Siddha, Unani, or Homoeopathy (whichever is applicable) from a university recognized by the government.
Analytical Chemist: A qualified professional responsible for the quality control lab. They will test raw materials and finished products to ensure they comply with the prescribed standards.

Their appointment letters, qualification certificates, and experience documents are mandatory submissions during the license application process.

The Complete Step-by-Step Guide to AYUSH Manufacturing Unit Registration

Navigating the regulatory pathway is the most critical part of setting up your venture. This step-by-step guide to AYUSH registration breaks down the complex process into manageable stages, covering everything from the primary manufacturing license to GMP compliance and other essential business registrations. Following these steps diligently will ensure you remain compliant and set your business up for long-term success.

Step 1: Obtain the AYUSH Manufacturing License

The cornerstone of your operation is the AYUSH Manufacturing License, which is granted by the State Licensing Authority (SLA) of the state where your unit is located. This license certifies that your facility, personnel, and processes meet the legal standards for producing AYUSH medicines. The application process is meticulous and involves several stages of verification.

The process typically involves:

Filing the Application: You must submit an application in Form 24-D along with the prescribed government fees to your respective state’s AYUSH department or Drug Control office.
Document Submission: The application must be accompanied by a comprehensive set of documents, including your company’s constitutional documents, proof of premises ownership, site plans, and details of your technical staff and equipment (as detailed in the checklist below).
Premises Inspection: After scrutinizing your application, the SLA will depute a Drug Inspector to visit and inspect your manufacturing facility. The inspector will verify that the premises comply with the infrastructural and hygienic standards mentioned in the rulebook.
Grant of License: If the inspector is satisfied with the compliance, they will submit a positive report to the SLA, which will then grant you the AYUSH Manufacturing License. For official regulations, you can always refer to the Ministry of AYUSH website.

Step 2: Ensure Good Manufacturing Practices (GMP) Compliance

Good Manufacturing Practices (GMP) are a set of mandatory guidelines that ensure products are consistently produced and controlled according to quality standards. For AYUSH manufacturers, compliance with Schedule T of the Drugs and Cosmetics Act, 1940, is compulsory. GMP certification is often a prerequisite for obtaining the manufacturing license and is crucial for building credibility and trust with consumers. Adhering to these guidelines for AYUSH manufacturing registration is not just about legal compliance; it’s about committing to product quality and safety.

Key areas covered under GMP (Schedule T) include:

Factory Premises & Hygiene: The building must be free from contamination, insects, and rodents. It must have smooth, washable walls and floors and proper sanitation facilities.
Machinery & Equipment Standards: All equipment used in manufacturing and testing must be made of appropriate material (like stainless steel) that does not react with the ingredients and should be regularly calibrated and cleaned.
Raw Material Testing & Storage: There must be a documented procedure for testing all incoming raw materials for identity, purity, and strength before they are used in production.
Quality Control Processes: A well-equipped in-house laboratory is mandatory for testing finished products to ensure they conform to the prescribed pharmacopoeial standards.
Documentation and Records: Maintaining detailed records of every batch manufactured (known as Batch Manufacturing Records or BMRs) is essential for traceability and quality assurance.

Step 3: Secure Other Essential Business Registrations

Beyond the primary AYUSH license, your manufacturing unit needs several other standard business registrations to operate legally and efficiently in India. These registrations are crucial for taxation, legal identity, and accessing government benefits. Neglecting them can lead to legal complications and penalties down the line, so it’s wise to complete them in parallel with your AYUSH license application.

Company/Firm Registration: As decided in the pre-requisite stage, you must officially register your business entity. For a Private Limited Company or LLP, you need to register with the Ministry of Corporate Affairs (MCA). For a partnership firm, you register with the Registrar of Firms.
GST Registration: Goods and Services Tax (GST) registration is mandatory for any manufacturing business whose annual turnover exceeds the prescribed threshold (₹40 lakhs in most states). You must obtain a GSTIN to pay taxes, claim input tax credits, and issue valid invoices. You can register on the official GST Portal.
Udyam (MSME) Registration: Registering your unit on the Udyam Registration Portal classifies it as a Micro, Small, or Medium Enterprise. This is highly recommended as it makes your business eligible for numerous government schemes, including interest subsidies, collateral-free loans, and preferences in government procurement.
Trademark Registration: Your brand name, logo, and product names are valuable assets. Protecting them through trademark registration is vital to prevent others from using them. This gives you exclusive legal rights and helps build a unique brand identity in a competitive market. At TaxRobo, we offer expert assistance with intellectual property services.

Checklist: Documents Required for Registering an AYUSH Manufacturing Unit in India

Compiling the correct documentation is a critical part of the AYUSH unit registration process. A complete and accurate set of documents can significantly speed up the approval time. The list can be extensive, so it’s best to prepare a checklist and gather everything in advance. The specific list may vary slightly from state to state, but the following documents are universally required.

Constitutional Documents

For Companies: Certificate of Incorporation, Memorandum of Association (MOA), and Articles of Association (AOA).
For LLPs/Firms: LLP Agreement or Partnership Deed.
Director/Partner KYC: Self-attested copies of PAN Card, Aadhaar Card, address proof (like a utility bill or bank statement), and recent passport-sized photographs of all directors or partners.
A copy of the Board Resolution authorizing the application.

Premise-Related Documents

Proof of Ownership: A copy of the registered Sale Deed or Conveyance Deed if the premises are owned.
Rental Agreement: A notarized copy of the Rent/Lease Agreement if the premises are rented.
No Objection Certificate (NOC): An NOC from the landlord on their letterhead, stating they have no objection to the premises being used for manufacturing AYUSH products.
Site Plan: A detailed layout plan of the premises, duly signed by a chartered engineer or architect, showing all areas as per GMP requirements.
Key Plan: A broader plan showing the location of the unit in relation to surrounding areas.

Technical Documents

List of Machinery and Equipment: A comprehensive list of all machinery, lab equipment, and apparatus installed in the unit for manufacturing and testing.
Technical Staff Details: Appointment letters, consent letters, educational qualification certificates, experience certificates, and registration certificates (if any) of the appointed Manufacturing Chemist and Analytical Chemist.
List of Formulations: A list of the products you intend to manufacture, along with their detailed formulation.
An affidavit from the directors/partners as per the prescribed format.

Conclusion

The journey of an AYUSH manufacturing unit registration is detailed and demands meticulous attention to legal and technical requirements. From choosing the right business structure and setting up a GMP-compliant facility to obtaining the core manufacturing license and securing all other necessary registrations, each step is crucial. However, with a clear roadmap and a systematic approach, this process becomes entirely manageable. Successfully navigating these regulations is your gateway to participating in one of India’s fastest-growing and most promising sectors. While the AYUSH unit registration process is comprehensive, the potential rewards in the booming wellness industry are immense.

The complexities of legal documentation, compliance, and financial structuring can be overwhelming. If you need expert guidance to navigate the requirements for your AYUSH manufacturing unit registration seamlessly, don’t hesitate. Contact the specialists at TaxRobo today for a consultation and let us help you turn your entrepreneurial vision into a reality.

Frequently Asked Questions (FAQs)

1. How long does the AYUSH manufacturing unit registration process typically take?

The entire process, from application submission to the grant of the license, can take anywhere from 3 to 6 months. This timeline is subject to variation based on the specific state’s processing speed, the completeness and accuracy of your submitted documents, and the schedule of the drug inspector for the premises inspection.

2. Is GMP certification mandatory for all AYUSH manufacturing units?

Yes, absolutely. Compliance with Good Manufacturing Practices (GMP) as laid out in Schedule T of the Drugs and Cosmetics Act, 1940, is mandatory for obtaining an AYUSH manufacturing license in India. It is a fundamental requirement to ensure product quality, safety, and efficacy.

3. What is the approximate government fee for an AYUSH manufacturing license?

The government fee for an AYUSH manufacturing license is not uniform across the country; it varies from state to state. The fee also depends on the number of product formulations you are applying for. It is highly advisable to check the official website of your respective State Drug Control Department or AYUSH department for the latest and most accurate fee structure.

4. Can I manufacture both Ayurvedic and Homoeopathic products under a single license?

No, you cannot. The manufacturing requirements, raw materials, and regulatory standards for different systems of medicine under AYUSH are distinct. Therefore, you would need to apply for separate licenses to manufacture products under different systems (e.g., one license for Ayurveda/Siddha/Unani and a separate one for Homoeopathic medicines). Each application would require you to meet the specific infrastructural and technical staff requirements for that particular system.

AYUSH Manufacturing Unit Registration: Your Easy Guide