Ayurveda, India’s traditional system of healing, has moved far beyond household remedies. Once confined to local practitioners and family recipes, it is now part of a thriving wellness industry that blends heritage with modern demand. The global wellness shift, toward plant-based, holistic, and preventive care, has given Ayurveda renewed importance.
In India alone, the AYUSH sector is valued at billions of rupees, growing steadily every year as consumers seek alternatives to chemical-based drugs. Ayurvedic medicines are now found not only in small clinics but also on pharmacy shelves, e-commerce platforms, and export markets worldwide. This rising acceptance makes it crucial for sellers and manufacturers to understand the licensing requirements that govern the trade.
Ayurveda may be centuries old, but the way it is produced and sold in India today is guided by modern law. A structured regulatory framework ensures that consumers receive authentic, safe products and that businesses operate transparently. Two elements define this framework: the regulatory authorities and the legislation that backs their powers.
Regulatory authorities: Ministry of AYUSH, State Licensing Authorities
At the national level, the Ministry of AYUSH is the primary policymaker. It develops standards for Ayurvedic medicines, promotes global recognition, and issues guidelines for quality and safety. On the ground, however, responsibility rests with the State Licensing Authorities (SLAs). These state bodies issue licenses to manufacturers and distributors, inspect facilities, verify compliance with Good Manufacturing Practices (GMP), and enforce penalties in case of violations. Together, the central and state arms create a dual system: one that sets the vision and another that ensures day-to-day implementation.
Key legislation: Drugs and Cosmetics Act, 1940, and related rules
The cornerstone of regulation is the Drugs and Cosmetics Act, 1940, along with its detailed rules. Specific provisions in Chapter IV-A focus on Ayurvedic, Siddha, and Unani medicines. The Act requires that every Ayurvedic drug be manufactured under licensed conditions, using approved formulations, proper labeling, and standardized processes. Over time, amendments have added advertising restrictions, quality checks, and GMP compliance as mandatory safeguards. For businesses, this law isn’t just a matter of legal paperwork; it is the framework that defines legitimacy, protects consumers, and fosters long-term trust in Ayurveda’s growing market.
Types of Licenses Required
Selling or manufacturing Ayurvedic medicines isn’t a one-size-fits-all process. Depending on whether you plan to produce, sell, or distribute, different licenses come into play. Understanding these categories helps entrepreneurs and healthcare providers choose the right path from the start.
Manufacturing License: For businesses with their production facility
If you plan to make Ayurvedic medicines in-house, a Manufacturing License is mandatory. This license requires you to set up a GMP-compliant facility with separate areas for storage, production, and testing. You’ll also need qualified staff, usually a BAMS doctor or Ayurvedic pharmacist, to supervise production. Without this license, no medicine can be legally manufactured in India.
Loan License: For businesses outsourcing manufacturing to approved third parties
Not every business can afford its factory. A Loan License allows you to use another company’s licensed facility to produce your medicines under your brand name. You won’t need to invest in full infrastructure, but you must have a valid agreement with the licensed manufacturer and comply with state AYUSH authority rules.
Retail License: For retailers selling Ayurvedic
A Retail License applies if you want to run a pharmacy, Ayurvedic clinic, or online store. It ensures the products you sell come from licensed manufacturers and meet safety standards. While some states are lenient, most recommend this license to avoid disputes or penalties during inspections.
Wholesale License: For wholesale distributors of Ayurvedic medicines
If your business model focuses on bulk supply to pharmacies, hospitals, or other distributors, you’ll need a Wholesale License. This license allows you to stock and distribute Ayurvedic medicines at scale.
Applicability for startups, clinics, exporters, and third-party manufacturers
- Startups: Can begin with a loan license or retail license, depending on whether they want to manufacture or simply sell.
- Clinics: Usually need a retail license to stock and dispense Ayurvedic products.
- Exporters: Must hold either a manufacturing or a loan license to send products abroad legally.
- Third-party manufacturers: Operate under manufacturing licenses and also produce for loan license holders.
Choosing the correct license early ensures compliance, avoids delays, and builds consumer trust in your Ayurvedic venture.
AYUSH License Application Process
Getting an AYUSH license may sound complicated, but in practice, it follows a clear process. Whether you’re applying for a manufacturing, loan, retail, or wholesale license, most states follow a similar path. Here’s how it works:
Step 1: Visit your state’s AYUSH portal
Each state has its own AYUSH or Drug Licensing Authority (DLA) portal. Start by registering on the official website.
Step 2: Download and fill out the application form
Select the correct form based on your license type. Fill in details such as business name, address, and proposed activity.
Step 3: Prepare and attach required documents
- Typical documents include:
- Proof of identity and business registration
- Premises ownership/lease deed
- GMP certificate (for manufacturers)
- Site layout and building plan
- Product details and formulations (if applicable)
- Staff qualification certificates (BAMS doctor, pharmacist, or technical staff)
Step 4: Submit the form with a GMP affidavit
Applicants must submit an affidavit declaring compliance with Good Manufacturing Practices (GMP) under Schedule T of the Drugs & Cosmetics Act.
Step 5: Verification by authorities
The AYUSH department, along with the State Licensing Authority or Commissioner, reviews the application. An inspection of premises is usually conducted to confirm compliance with GMP and infrastructure requirements.
Step 6: Issuance of license
Once approved, the license is granted. The validity typically ranges from 1 to 5 years, depending on state rules. Renewal must be applied for before expiry to avoid penalties.
Documents Required
Applying for an AYUSH license isn’t just about filling out a form; the supporting documents are what really decide whether your application moves forward smoothly or gets delayed. While requirements vary slightly from state to state, most authorities ask for the following essentials:
- Company Registration Certificate – Proof that your business is legally registered, whether as a proprietorship, partnership, LLP, or private limited company.
- Proof of Premises – Ownership papers or a valid rental/lease agreement for the site where the business will operate. For manufacturers, this must align with industrial land use norms.
- Staff Details and Qualifications – Certificates of Ayurvedic doctors, pharmacists, or technical experts employed at your facility, as required under licensing rules.
- Manufacturing Equipment List – A detailed inventory of machinery and equipment installed, especially for manufacturing licenses.
- Product Formulations – For each Ayurvedic medicine you plan to manufacture, details of ingredients, proportions, and references from authoritative texts must be submitted.
- GMP Certificate – Proof that your facility follows Good Manufacturing Practices, a non-negotiable requirement under Schedule T of the Drugs & Cosmetics Act.
- COPP (Certificate of Pharmaceutical Product) – Needed if you plan to export Ayurvedic medicines, showing compliance with WHO standards.
Conclusion
Licensing isn’t just a legal formality in the Ayurvedic sector; it’s the foundation of trust, credibility, and long-term growth. Whether you’re manufacturing, wholesaling, or retailing, the right license ensures compliance and protects both your business and your customers. For aspiring entrepreneurs, the key is preparation: understand your role, organize documents early, and choose the license that matches your business model.
