How to start a pharmacy in India: drug licence and registrations

Structure and who can own a pharmacy

A pharmacy can be owned by a proprietor, partnership, LLP or company. The owner need not be a pharmacist, but the licence requires sales of prescription drugs to be conducted by or under the supervision of a registered pharmacist employed full-time at the premises.

Chains and online-to-offline models usually use a private limited company because each outlet needs its own licence and the company can hold them centrally. A proprietorship suits a single neighbourhood store run by a pharmacist-owner.

Licences and registrations for a pharmacy

Drug licences are granted under the Drugs and Cosmetics Act 1940 and the Drugs Rules 1945, administered by state drug control departments. Separate licences apply for different categories of drugs and for wholesale.

What the drug licence application involves

Applications are filed online in most states through the Online National Drugs Licensing System. Typical documents include a premises plan drawn to scale, ownership or rent proof, the pharmacist's registration and appointment letter, an undertaking from the pharmacist, identity documents and proof of fee payment. A refrigerator and temperature monitoring are needed for drugs requiring cold storage.

Fees are set by the rules and collected by the state. Goa's drug department, for example, lists ₹3,000 as the base fee for a retail licence, with the same amount for retention and a late fee of 2% per month for delayed retention. An inspector usually visits before the licence is granted.

GST and record-keeping

Medicines are taxable goods and rates depend on the HSN code; many moved to lower slabs in the September 2025 rationalisation, so update your billing software to the current notified rates. Registered pharmacies can claim input tax credit on purchases from distributors.

The Drugs Rules require prescriptions for Schedule H and H1 drugs, and a separate register for Schedule H1 sales recording the prescriber, patient and quantity, kept for the prescribed period. Schedule X drugs have stricter storage and record rules. Inspectors check these registers during visits.

Online pharmacy and other cautions

India has not finalised a dedicated legal framework for e-pharmacies; draft rules were published in 2018 and the position has been the subject of litigation. Anyone planning online sales should take specialist advice rather than relying on a retail licence alone.

Licences are specific to the premises. Moving the shop, changing the pharmacist or changing ownership requires intimation or a fresh licence, depending on the change and the state.

Pitfalls to avoid

Licence suspension stops all sales, so build the pharmacist's attendance, register maintenance and cold chain checks into daily routines from the first day of operation.

• Operating without the registered pharmacist present during working hours.
• Selling Schedule H1 drugs without prescriptions or register entries.
• Missing the five-year retention fee, which can lead to cancellation.
• Storing vaccines or insulin without a working refrigerator and temperature log.

Step by step

1. 1Choose premises

   Select a commercial space meeting the area and storage requirements of your state.

2. 2Appoint a pharmacist

   Hire a registered pharmacist and obtain appointment and acceptance letters.

3. 3Register the entity

   Set up the business with PAN and bank account.

4. 4Apply for the drug licence

   File Form 19 online with plans, documents and fee.

5. 5Face inspection

   Allow the drug inspector to verify premises, storage and staff.

6. 6Register for GST and local licences

   GST, shop and establishment and trade licence.

7. 7Set up registers

   Prepare Schedule H1, purchase and sale records before opening.