A complete guide to starting a pharmacy business in India

Last Updated at: May 15, 2020
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Even online pharmacies are struggling to fulfill customer orders due to acute shortage of staff, especially for last-mile delivery. With the lockdown now having been extended, these e-health companies are now resorting to aggressive hiring in order to fulfill orders which have grown manifold during the past few days.

A complete guide to starting a pharmacy business in India


Today, India’s pharmaceutical industry ranks 4th in volume and 13th in value on the global pharmaceutical market, with exports worth USD 2.6 billion in addition to domestic sales of more than USD 4 million.


If you want to start a pharmaceutical business, you must chalk out a clear plan of action. Irrespective of the size of your business, you must be ready to deal with your competitors. At the same time, you must fulfill all the legal obligations mandated by the law in your country.

“Medicine is the science of uncertainty and the art of possibility”

William Osler

While fashion tastes change, old technology replaces new, fads come and go, medicines and pharmacies with the undeniable necessity that they hold in our lives, are here to stay. India is now gaining one of the top spots in health tourism, as people from Western countries find the best of health services matching international standards at more affordable rates. Whether you plan on starting a pharmaceuticals company or aim of an individual chemist store, read on to find out how to begin your own pharmacy business in India.

If you’re just looking around for related information on startups, government registrations, tax, or legal documentation, check out the list of services we provide to make your interaction with government as smooth as is possible by doing all the legal documentation for you. We will also give you absolute clarity on the process to set realistic expectations.

1. Delineating your scope of business: With several alternatives to traditional antibiotics emerging, it is a good idea to research and explore all possibilities. India has a glorious tradition of natural medicines as our Vedas and Samhitas provide several sources of healing. These include Unani, Siddha, Ayurveda, and Homeopathy. It may also be possible to have a composite pharmacy providing a combination of all these different kinds of medicines, to cater to a larger market segment.

2. Deciding on the kind of business structure: For some, taking a franchisee of a large conglomerate like Ranbaxy, Apollo, SBL, etc seems more lucrative, as there are a ready market and supply chain that makes access to customers easier. You also save on the costs of acquiring new customers, promotional and advertising costs, and also cash in on the heavy discounts offered by these big brands. However, if you’re targeting building your own brand, the investments, costs, and strategies would slightly differ. You might want to engage consultants for branding, medical professionals for research, and sales staff for outreach in the initial years.

Start Your Pharmacy Business

3. Managing expenses: Once you have a functional entity, you would need finance of two different kinds. A fixed element, for meeting operational expenses like rent, electricity, salaries, and a working element, for purchasing inputs, medicines, and meeting contractual obligations. A hospital pharmacy will have different financing needs from a standalone drug store or a brand’s chain pharmacy.

4. Establishing and maintaining research facilities: Unless you are thinking of only trading with wholesalers and selling through your own facility, you would want to have a research unit of your own. A simple unit may be required for homeopathic combinations and natural remedies, whereas antibiotic and complex drug research may require you to engage trained professionals and maintain a dedicated laboratory. This decision would largely be based on where you see your business in the coming years.

5. Getting a drug license: The Central Drugs Standard Control Organization (CDSCO) and State Drugs Standard Control Organization control the issue of drug licenses in India. While standards are prescribed by the central organization, the state office grants the license such as assessing specific parameters like area possessed, infrastructure requirements (refrigeration, air conditioning for specific drugs, etc), engaging a qualified and registered pharmacist possessing prescribed qualifications, etc.

6. Other approvals and documents: It’s a good idea to have all documentation in place before you begin, to avoid legal complexities at a later stage. These include rent agreements, guaranteed contracts with suppliers, hospitals or retailers, tax registration under GST, and other approvals prescribed by specific state laws.

Understanding the concepts as stated above can be very helpful to all entrepreneurs who want to make it big in the pharma sector. A clear business plan elucidating your methods and your journey towards success will always allow you to believe in your cause even in the worst of times.

Avani Mishra is a graduate in law from the National Law Institute University, Bhopal. She qualified the Company Secretary course with an All India Rank 1 and is a recipient of the President’s Gold Medal for her academic distinctions. She also holds a B.Com degree with a specialization in Corporate Affairs and Administration.