Legal Requirements and Licenses Needed for Ayurvedic Wholesale Businesses
Starting a wholesale ayurvedic medicine business can be a profitable venture, especially with India’s growing demand for natural and traditional remedies. However, before you begin operations, it’s essential to understand the legal requirements and licenses you need to run your business smoothly and lawfully.
This guide outlines all the necessary steps, licenses, and compliances for setting up a wholesale Ayurvedic medicine business in India.
1. Understanding the Legal Framework
Ayurvedic medicines fall under the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules, 1945, specifically under Chapter IVA, which deals with the regulation of Ayurvedic, Siddha, and Unani (ASU) drugs.
The Ministry of AYUSH (Ayurveda, Yoga & Naturopathy, Unani, Siddha, and Homeopathy) is the primary authority responsible for overseeing the manufacture, sale, and distribution of Ayurvedic medicines in India.
2. Business Registration
Before applying for any licenses, you need to register your business entity. You can choose from the following structures:
-
Sole Proprietorship
-
Partnership Firm
-
Limited Liability Partnership (LLP)
-
Private Limited Company
Registering your business helps establish credibility and makes it easier to obtain tax registrations and licenses.
3. Drug License for Ayurvedic Wholesale Business
Unlike allopathic medicines, Ayurvedic products are regulated under a different category. To sell them in bulk, you need a wholesale drug license specific to Ayurvedic or herbal products.
Types of Ayurvedic Drug Licenses:
-
Manufacturing License – For businesses that produce Ayurvedic medicines.
-
Retail License – For those selling directly to consumers.
-
Wholesale License – For distributors or wholesalers selling to retailers or other businesses.
For a wholesale Ayurvedic business, you need a Wholesale Drug License for Ayurvedic Medicines, issued by the State Licensing Authority (SLA) under the AYUSH department of your respective state.
4. GST Registration
Every wholesale business must obtain a GST (Goods and Services Tax) registration if its annual turnover exceeds the prescribed limit (₹40 lakh for most states, ₹20 lakh for special category states).
GST registration allows you to:
-
Legally collect and remit tax
-
Claim input tax credits
-
Supply products across India
5. Trade License
A Trade License from the local municipal authority is necessary to operate any business legally within its jurisdiction. It ensures that your business adheres to local laws and safety standards.
6. FSSAI License (if applicable)
If your Ayurvedic products fall under the nutraceuticals or food supplement category (like herbal juices, powders, or tonics), you must also obtain an FSSAI license. This ensures product safety and compliance with food safety laws.
7. Import-Export Code (IEC)
If you plan to export Ayurvedic medicines or import raw materials, you’ll need an IEC code from the Directorate General of Foreign Trade (DGFT).
This license is mandatory for international business transactions.
8. Compliance with Good Manufacturing Practices (GMP)
Although wholesalers aren’t directly involved in manufacturing, partnering with GMP-certified manufacturers enhances your brand’s credibility and ensures product quality.
If you plan to eventually expand into manufacturing, GMP compliance becomes mandatory.
9. Other Important Documents
When applying for a wholesale Ayurvedic drug license, you may need to submit:
-
Premises ownership/rental proof
-
Blueprint/layout of business premises
-
Details of storage facility (temperature, cleanliness, etc.)
-
Qualification proof of competent person (if required)
-
List of directors/partners and their ID proofs
-
NOC from local authorities (if applicable)
10. Renewal and Record-Keeping
Most licenses, including drug licenses and GST registration, need periodic renewal. It’s important to maintain proper sales and purchase records, invoices, and inventory logs to ensure compliance during inspections.
Conclusion
Obtaining the right licenses and legal approvals is the foundation of a successful Ayurvedic wholesale business. Staying compliant not only builds trust with suppliers and retailers but also ensures uninterrupted business operations.
By securing your drug license, GST registration, and trade permits, you can confidently grow your Ayurvedic wholesale business and contribute to the flourishing herbal healthcare sector in India.
