Updated for 2026 · India Regulatory Expert
Loan License for Drug Manufacturing in India
Want to manufacture medicines in India without setting up your own factory? A loan license in pharma lets you do exactly that — legally, compliantly, and at a fraction of the cost. TraccGlobal helps you get your loan license approved in ~30 days with zero-error documentation.
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Quick Answer — AI Overview A loan license in pharma (also called loan license manufacturing) is a legal permission granted by India’s State Drug Controller under Rule 75A of the Drugs and Cosmetics Rules, 1945. It allows a company to manufacture drugs at another licensed manufacturer’s facility, without owning a plant. The applicant (loanee) files Form 24A (for non-Schedule C drugs) or Form 27A (for Schedule C/C1 drugs), and if approved, receives Form 25A as the final loan license. Government fees are ₹6,000 for up to 10 items plus ₹1,000 inspection fee. The entire process takes approximately 30 days. The loan licensee remains fully responsible for product quality, labeling, and regulatory compliance.
What is a Loan License in Pharma?
Plain and simple explanation of how loan license manufacturing works in India.
A loan license is a regulatory permission issued by the State Food & Drug Administration (FDA) of India that allows one pharma company — the “loanee” — to manufacture its medicines using the factory, machinery, and qualified technical staff of another licensed manufacturer — called the “host firm.” You don’t need to build or own a manufacturing plant at all.
Think of it this way: You have a medicine brand, product formula, and market. But you don’t have crores to invest in setting up a GMP-compliant factory. A loan license for drug manufacturing lets you borrow another company’s certified facility and staff to produce your medicines legally, under your brand name.
This arrangement is governed under Rule 75A and Form 28 of the Drugs and Cosmetics Rules, 1945. Even though manufacturing is done at the host firm’s plant, the loan licensee is fully responsible for the quality, safety, and labeling of every batch produced.
In Simple Words
Loan license manufacturing = Your brand + Someone else's factory (under legal agreement). You pay the host firm for manufacturing services. They use their GMP-certified plant and team. You take the product, label it with your brand, and sell it — after getting proper regulatory approval from the State FDA.
Who Needs a Loan License for Drug Manufacturing?
Loan license manufacturing is the smartest entry route for these types of businesses in India.
Pharma Startups
New companies launching medicines without ₹5–10 crore factory investment. Start your pharma brand legally and fast.
Marketing Authorization Holders (MAH)
Businesses focused on branding, sales, and distribution of drugs while outsourcing manufacturing to a GMP facility.
R&D Pharma Companies
Research organizations that develop new formulations and need a partner facility for commercial-scale production.
Pharma Exporters
Companies trading medicines internationally that require compliant Indian manufacturing for export products.
Expanding Pharma Firms
Established companies wanting to add new formulations beyond their current manufacturing capacity.
Entrepreneurs Entering Pharma
Individuals who want to enter the drug industry without setting up a full plant. Loan license is the lowest-risk entry path.
Key Benefits of Loan License Manufacturing
Why thousands of pharma businesses in India choose loan license over full manufacturing setup.
Massive Cost Savings
No need to invest ₹5–15 crore in building and equipping a GMP factory. Start drug manufacturing with just the license fee of ₹6,000 + consultant charges.
Faster Market Entry
Skip the 2–3 years it takes to set up and get a manufacturing plant approved. Loan license can be obtained in as little as 30 days with proper guidance.
GMP Compliance Built-In
Host firm's facility already meets Schedule M / GMP standards. You leverage their existing compliance without additional regulatory burden.
Focus on Core Business
Spend your energy on product development, sales, and branding. Leave manufacturing and plant compliance to your host firm.
Product Diversification
Quickly add new drug formulations to your portfolio without the capital or time required to expand your own facility.
Scalable & Flexible
Scale production up or down as per market demand without being tied to fixed manufacturing overhead costs.
| Factor | Own Manufacturing Plant | Loan License Manufacturing |
|---|---|---|
| Initial Investment | ₹5–15 Crore+ | ₹6,000 (Govt. Fees) |
| Time to Start Production | 2–4 Years | ~30 Days |
| GMP Setup Required | Yes (You do it) | No (Host firm handles) |
| Need Technical Staff | Yes (Your own) | No (Host firm provides) |
| Risk Level | Very High | Low |
| Suitable for Startups | Difficult | Ideal |
Step-by-Step
Process to Get Loan License in Pharma
Here is exactly how the loan license application process works in India — from start to approval.
Identify & Finalize Host Manufacturer
Find a GMP-approved, licensed pharmaceutical manufacturer (Form 25/28 holder) willing to act as your host firm. This facility will be your production base. TraccGlobal helps you identify verified, Schedule M compliant host firms across India.
Execute Loan License Agreement
Draft a formal legal agreement between loanee (you) and the host firm defining scope, responsibilities, product details, trademark transfer, and quality obligations. This agreement is a mandatory document for the application.
Prepare All Documents
Gather documents for both the loanee firm and the host firm (see document list below). Accuracy is critical — any error or mismatch is the #1 reason for rejection or delay. TraccGlobal prepares zero-error dossiers.
File Application Form 24A or Form 27A
Submit Form 24A to the State Drug Authority for drugs not in Schedule C, C1, or X. For Schedule C/C1 drugs, file Form 27A. TraccGlobal handles the entire application filing with regulatory authorities.
Mandatory Site Inspection
The Licensing Authority (LA) inspects the host firm's facility to verify GMP compliance, technical staff qualifications, and infrastructure. TraccGlobal coaches you and the host firm for a successful audit outcome.
License Granted — Form 25A
On successful inspection and document verification, the State FDA grants the loan license on Form 25A. This is your official permission to manufacture drugs at the host facility under your brand.
Documents Required for Loan License
Both the loanee and the host firm need to submit their respective documents to the State FDA.
Loanee Firm Documents (Your Company)
- Aadhar Card and PAN Card of all Directors / Partners
- GST Registration Certificate
- Loan License Agreement with Host Firm
- Filled Application Form 24A (or Form 27A for Schedule C)
- Company Incorporation Certificate (for Pvt. Ltd./LLP)
- Product List with formulation details
- Cover Letter addressed to State FDA
- Trademark / Brand Authorization documents (if applicable)
Host Firm Documents (Factory)
- Valid Drug Manufacturing License — Form 25 or Form 28
- Technical Staff Qualification documents (B.Pharma / M.Pharma)
- Site Master File (SMF) of the manufacturing facility
- Stability Study Data for the drug products
- Product Approval Copies from State FDA
- GMP Compliance Certificate / Schedule M Compliance proof
- Factory Layout Plan and Floor Plan
- Equipment List and Calibration records
Important: Missing or incorrect documents is the single biggest reason for loan license rejection or delays. At TraccGlobal, our specialists prepare and verify every document before submission, ensuring a 98% first-attempt approval rate for our clients.
Government Fees for Loan License in Pharma
As per the Drugs and Cosmetics Rules, 1945 (Section 75A) — Official 2026 fee structure.
| Fee Type | Description | Amount |
|---|---|---|
| New License Fee | Up to 10 drug items (Schedule M & M-III) | ₹6,000 |
| Inspection Fee (New) | Site inspection for new application | ₹1,000 |
| Additional Items | Per item beyond the first 10 | ₹300/item |
| Renewal Fee | Loan license renewal (every 5 years) | ₹6,000 |
| Inspection Fee (Renewal) | Site inspection during renewal | ₹1,500 |
| Late Renewal Fee | Per month delay after expiry | ₹1,000/month |
*Government fees are subject to change. State-specific fees may vary. Consultant charges are separate from government fees.
Legal Framework & Important Points
Key regulatory rules every loan license holder must know in India.
Rule 75A — Regulatory Basis
The loan license concept is established under Rule 75A and Form 28 of the Drugs and Cosmetics Rules, 1945. This is the core legal framework governing all loan license manufacturing in India.
Full Quality Responsibility
The loan licensee bears 100% responsibility for product quality, safety, and efficacy — even though manufacturing happens at the host firm. You cannot delegate this responsibility.
Labeling Requirements
Product labels must clearly state the loan licensee's name and address, plus the manufacturing site (host firm) address. Non-compliance with labeling invites regulatory action.
State-Level License Required
Loan licenses are issued by the State Drug Controller, not CDSCO. If you manufacture in multiple states, you need a separate license for each state. Inter-state operations require multiple approvals.
Schedule Restrictions
Loan licenses are not issued for drugs listed under Schedule X (narcotics/psychotropics). Different forms apply for Schedule C/C1 drugs vs. general drugs. Consult TraccGlobal to determine the right form for your product.
Mandatory Inspection Before Grant
No loan license is granted without a physical inspection of the host facility by the Licensing Authority (LA). The inspector checks GMP compliance, infrastructure, and technical personnel qualifications.
Real Case Study: How Loan License Helped a Startup Enter Market in 35 Days
Real Client Story
Mumbai-Based Nutraceutical Brand Launches Pharma Division via Loan License
A Mumbai-based nutraceutical company decided to expand into prescription drugs in 2024. They had a portfolio of 8 formulations ready, brand registration done, and distribution network in place — but no manufacturing facility. Building their own plant would take 3 years and ₹8 crore minimum.
They approached TraccGlobal for loan license in pharma support. Our team identified a GMP-certified host facility in Baddi, Himachal Pradesh, drafted the loan license agreement, prepared complete documentation for both loanee and host firm, and filed the application with the Himachal Pradesh State FDA.
The license was granted in 35 days. No rejection. No back-and-forth. The company launched their first batch of 8 drug formulations under their brand within 45 days of engaging TraccGlobal. Total regulatory cost: under ₹2 lakh (government fees + professional fees).
35
Days to License Approval
8
Drug Products Approved
₹2L
Total Regulatory Cost
INDUSTRY INSIGHT
Why Baddi (Himachal Pradesh) is India's Most Popular Loan License Hub
Baddi in Himachal Pradesh hosts over 600 pharmaceutical manufacturing units and is one of India’s largest pharma clusters. Due to its historical tax benefits, GMP-certified host firms are widely available here, making it the preferred location for loan license manufacturing. States like Gujarat (Ahmedabad/Ankleshwar), Uttarakhand (Haridwar), and Maharashtra (Pune/Nashik) are also major hubs for loan license in pharma.
Choosing the right host firm is as important as the license itself. TraccGlobal has a pre-verified network of compliant host firms across all major pharma clusters in India.
Why Choose TraccGlobal for Your Loan License?
We are not just consultants — we are your regulatory partner from application to approval and beyond.
Zero-Error Documentation
Our team prepares every document with precision aligned to the latest State FDA guidelines, eliminating rejection risk.
Pre-Verified Host Firm Network
We connect you with our network of GMP-compliant host manufacturers across Baddi, Haridwar, Gujarat, and more.
48-Hour Query Resolution
Any regulatory query from the FDA authority is addressed within 48 hours, ensuring your license moves forward without delay.
Inspection Coaching
We prepare both your team and the host firm for the mandatory site inspection. No surprises. No failed audits.
Multi-State License Expertise
If you need loan licenses across multiple states, our pan-India team manages each state's regulatory requirements simultaneously.
Post-License Compliance Support
We don't stop at license grant. TraccGlobal supports you with renewals, product additions, GMP audits, and ongoing compliance.
F.A.Q
Frequently Asked Questions
Answers to the most searched questions about loan license in pharma — as seen on Google’s “People Also Ask.”
What is a loan license in pharma?
What is the difference between a loan license and regular drug manufacturing license?
A regular drug manufacturing license (Form 25/28) is granted to a company that owns its own GMP-compliant manufacturing facility. A loan license (Form 25A) is granted to a company that manufactures at someone else’s facility under a formal agreement. The key difference: with a loan license, you don’t need to own or set up a factory. Both licenses make the holder legally responsible for the quality of drugs manufactured.
What is Form 24A in pharma / loan license application?
Form 24A is the official application form for grant or renewal of a loan license to manufacture drugs other than those specified in Schedule C, C(1), and X of the Drugs and Cosmetics Rules, 1945. This is what you submit to the State FDA to apply for a loan license. You can download Form 24A from the State FDA website or from drugs.delhi.gov.in.
What is Form 25A in pharma?
Form 25A is the actual Loan License granted by the State FDA. It is the official “Licence to manufacture for sale or for distribution of drugs other than those specified in Schedules C, C(1) and X.” When you successfully complete the loan license process, the State Drug Authority issues Form 25A — this is the document that gives you legal permission to manufacture drugs at the host firm’s plant.
What is Form 27A in pharma?
How long does it take to get a loan license in India?
What is the government fee for a loan license for drug manufacturing?
New License: ₹6,000 (up to 10 items) + ₹1,000 inspection fee. For each additional item beyond 10: ₹300/item.
Renewal: ₹6,000 renewal fee + ₹1,500 inspection fee. Late renewal attracts ₹1,000/month penalty.
Can I manufacture Schedule X drugs under a loan license?
No. Loan licenses are not issued for drugs listed in Schedule X (narcotic drugs and psychotropic substances). The standard loan license (Form 25A) covers drugs not in Schedule C, C1, or X. For Schedule C and C1 drugs (biological products), a separate Form 27A application is required with additional compliance requirements.
What is loan license in jurisprudence / pharmaceutical law?
In pharmaceutical jurisprudence (the study of pharmaceutical laws and their application), a loan license is defined as an arrangement under which a drug manufacturing license is granted to a loanee company that does not own a factory, allowing it to use the licensed premises, plant, machinery, and qualified technical staff of another licensed manufacturer (the host). The legal basis is Rule 75A of the Drugs and Cosmetics Rules, 1945. The loanee remains legally and financially liable for the quality and safety of all drugs produced under this arrangement.
Do I need a separate loan license for each state?
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