Starting a chemist shop franchise in India is a promising business opportunity, given the constant demand for medicines and healthcare products. However, before you can open your doors to customers, it’s essential to understand the legal and regulatory requirements—especially when it comes to licensing.
This guide breaks down everything you need to know about licensing for a chemist shop franchise in India.
1. Why Licensing is Important
Licensing ensures that your chemist shop is legally authorized to sell medicines, including prescription drugs. It also confirms that you meet the required standards for storage, handling, and distribution of pharmaceutical products. Operating without proper licenses can result in legal penalties and business closure.
2. Key Licenses Required
Here are the main licenses you’ll need to start a chemist shop franchise:
a. Drug License
This is the most critical license for any pharmacy. It is issued under the Drugs and Cosmetics Act, 1940, by the State Drugs Standard Control Organization (SDCO) or Central Drugs Standard Control Organization (CDSCO).
There are two main types:
Retail Drug License (RDL): For selling medicines directly to customers.
Wholesale Drug License (WDL): For those dealing in bulk supply to retailers or hospitals.
Note: For a franchise retail outlet, you will typically need the Retail Drug License.
b. GST Registration
If your annual turnover exceeds the GST threshold limit, you must register for Goods and Services Tax. This enables you to charge and collect GST on medicines sold and claim input tax credit.
c. Shop and Establishment Registration
This is required by the local labor department to legally operate a commercial establishment. It helps regulate working hours, wages, holidays, and other conditions for employees.
3. Eligibility Criteria
Before applying for licenses, ensure you meet the following:
Pharmacist qualification: At least one person should be a qualified pharmacist (Diploma or Degree in Pharmacy) registered with the State Pharmacy Council.
Premises size: The area of the pharmacy should typically be at least 10 square meters for a retail shop, and 15 square meters if it includes wholesale operations.
Storage facilities: You must have refrigerators and proper ventilation for storing temperature-sensitive medicines.
4. Documents Required
Here’s a general list of documents needed for a drug license application:
Proof of ownership or rental agreement of the premises
Blueprint/layout plan of the shop
Identity and address proof of the owner
Qualification certificates of the registered pharmacist
Registration certificate of the pharmacist with the State Pharmacy Council
Affidavit of non-conviction related to drug laws
Electricity bill and NOC from landlord (if applicable)
5. Application Process
Visit your State Drugs Control Department website or office.
Fill out the required application form (Form 19 for retail license).
Attach all required documents.
Inspection by Drug Inspector will be conducted at your shop.
License issuance happens once you pass inspection and comply with regulations.
The entire process may take a few weeks to a couple of months, depending on your location and document completeness.
6. Renewals and Compliance
Drug licenses must be renewed periodically. Ensure you stay compliant with storage norms, employ a qualified pharmacist, and maintain proper records to avoid cancellation or fines.
Conclusion
Starting a chemist shop franchise in India is a rewarding venture, but getting the right licenses is non-negotiable. From obtaining a Drug License to ensuring GST registration, each step is essential for smooth and legal operations. By understanding and following the proper licensing process, you set a strong foundation for a successful and reputable business.
