Loan Licence for Drug Manufacturing (Form 24-A and Form 27-A)
A loan licence for drug manufacturing lets you make medicines under your own name at another licensed manufacturer’s plant, without building one. The State Licensing Authority grants it on Form 24-A or Form 27-A applications. We prepare the file, the loan agreement papers and the follow-up.
What it is
A loan licence for drug manufacturing is permission to manufacture drugs at the premises of another licensed manufacturer, instead of at a plant you own. The plant owner holds the regular manufacturing drug licence. You hold the loan licence. The medicines go to market under your name. Picture a Delhi marketing company with a cough syrup formula and a distributor network across Haryana, but no factory.
The law is the Drugs and Cosmetics Act, 1940 and the Drugs Rules, 1945. You apply under Rule 69-A on Form 24-A for drugs outside Schedules C, C(1) and X, and the licence is issued on Form 25-A. For Schedule C and C(1) products, such as many biologicals, the forms are 27-A and 28-A. The State Licensing Authority decides the application. In Haryana, that is the State Drugs Controller under the Food and Drugs Administration.
Who it applies to
Brand owners without a plant
A company that wants to sell its own range of tablets, syrups or ointments but would rather not invest in machinery and a Schedule M plant. Many first set up through private limited company registration so the licence and the brand sit in one entity.
Start-ups testing a product line
A Faridabad founder with a formulation and a distributor network, but no factory. A loan licence lets the product reach shelves while the market is tested.
Existing licence holders adding capacity
A licensed unit that has outgrown its own lines can use a second licensed plant for extra volume, instead of building a new section.
Why it matters
Lower upfront cost
You skip the shed, the clean rooms, the HVAC and the machinery. Your money goes into formulations and distribution.
Faster route to market
A manufacturing licence needs a full plant to be inspected. A loan licence leans on a plant that is already licensed.
You stay in control of the brand
The licence and the products are yours. If you move to another contract plant later, you apply afresh for that site.
Documents required
From you, the loan licensee
- Constitution papers: certificate of incorporation, partnership deed or proof of proprietorship
- PAN and GST registration
- Authorisation for the person who signs
- Product list with composition
- Proof of your office or registered premises
From the licensed manufacturer
- Copy of the valid manufacturing licence (Form 25 or Form 28) and the products it covers
- Consent letter agreeing to manufacture the listed drugs for you
- Technical staff details for the site
- Plant layout and site details the authority asks for
Between the two of you
- Loan manufacturing agreement setting out responsibilities for batches, testing and release
- Affidavit or declaration formats the Licensing Authority specifies
- Challan for the fee paid through the State’s online system
Drugs, medical devices and cosmetics at a glance
| Drugs | Medical devices | Cosmetics | |
|---|---|---|---|
| Law | Drugs Rules, 1945 | Medical Devices Rules, 2017 | Cosmetics Rules, 2020 |
| Application | Form 24-A (Form 27-A for Schedule C and C(1)) | Form MD-4 (Class A and B); Form MD-8 (Class C and D) | Form COS-6 |
| Licence | Form 25-A (Form 28-A) | Form MD-6 (Class A and B); Form MD-10 (Class C and D) | Form COS-9 |
| Who grants it | State Licensing Authority | State Licensing Authority for Class A and B; Central Licensing Authority (CDSCO) for Class C and D | State Licensing Authority |
For devices, Rules 20 and 21 of the Medical Devices Rules, 2017 define a loan licence as one for a person who uses the manufacturing site of another licensee to make the same device that licensee makes there. For Class C and D devices, no separate inspection of the site is needed where it is already licensed for that device. See our medical device registration page for the device route.
How it works
Match the host plant to your products
Here is the catch: a plant can only make what its own licence covers. We check that the plant’s manufacturing licence covers every product on your list, and that its dosage forms and categories fit. If the plant cannot make a product, there is no point in listing it.
Settle the loan agreement
We prepare the consent letter and the document set that goes with it. Your lawyer reviews the commercial agreement; a qualified professional signs wherever the law needs one.
Build and file the application
We prepare Form 24-A or Form 27-A with the annexures and file it through the State’s online licensing system. For devices, the filing goes on the CDSCO online portal for the relevant class.
Handle queries and inspection
In practice, the authority can ask questions or inspect before grant. We answer queries, coordinate the visit with the plant and keep both sides’ papers consistent.
Collect the licence and diarise the dates
After grant, we record the retention-fee dates and help you add products later. Your quality team handles batch release.
Timelines
Before you sell
The loan licence must be in hand before the first commercial batch is released under your name. Trial batches follow whatever the inspector’s conditions say.
Licensing authority timelines
Time limits are set in each Rule and in each State’s practice. For Class A and B devices, Rule 20 gives the licensing authority 45 days.
Retention fee dates
Under the 2017 amendment, manufacturing licences stay valid while the retention fee is paid before each five-year period ends. We read the dates on your own licence and diarise them.
What happens if you skip the licence
Selling without a licence
Under Section 18 of the Drugs and Cosmetics Act, 1940, no one may manufacture drugs for sale except under a licence. Stock made without one cannot be sold lawfully.
Using a plant that is not licensed for your product
If the host plant’s licence does not cover the product, your loan licence application will not go through. A rejected file means starting again.
Late retention fee
A missed retention date brings a late fee. If payment stays pending beyond the grace period, the licence can be deemed cancelled and you apply again.
Frequently asked questions
What is a loan licence in drug manufacturing?
It is a licence to manufacture drugs at another licensed manufacturer’s premises instead of your own plant. The plant owner holds the manufacturing licence, and you hold the loan licence, which is issued on Form 25-A or Form 28-A. Products are sold under your name. We prepare the application, the consent papers and the filing for you.
Which form do I use for a drug loan licence?
Use Form 24-A under Rule 69-A for drugs other than those in Schedules C, C(1) and X, and you receive the licence in Form 25-A. For Schedule C and C(1) products, such as many biologicals, the application is Form 27-A and the licence Form 28-A. We check your product list and file on the right form.
Who grants a loan licence?
The State Licensing Authority grants it, which in Haryana is the State Drugs Controller under the Food and Drugs Administration. For medical devices, the State Licensing Authority handles Class A and B, while CDSCO as the Central Licensing Authority handles Class C and D. We file the application and follow it up with the right office.
Do I need my own factory or technical staff?
You do not need a factory, because production happens at the licensed manufacturer’s plant, under that site’s technical staff and quality systems. The authority still checks the staff and site papers of the plant. We collect those from the host and match them to your file.
Can I get a loan licence for Schedule X drugs?
Form 25-A covers drugs other than those in Schedules C, C(1) and X, so Schedule X products do not fit that form. Schedule X drugs use Form 24-F on the regular manufacturing route. We review your list and tell you which products can go on a loan licence and which cannot.
Is there a loan licence for medical devices?
Yes. Under Rules 20 and 21 of the Medical Devices Rules, 2017, Class A and B devices use Form MD-4 for the application and Form MD-6 for the licence. Class C and D devices use Form MD-8 and Form MD-10. The loan licensee uses a site that is already licensed to make the same device.
How long does a loan licence stay valid?
The 2017 amendment to the Drugs Rules made manufacturing licences valid indefinitely, provided the retention fee is paid before each five-year period ends. Medical device licences follow a similar retention model under Rule 29 of the Medical Devices Rules. Check the dates on your own licence. We diarise them and remind you well before they fall due.
Who is responsible for quality, you or the host plant?
Both do, but the products carry your name, so you cannot treat quality as the plant’s job alone. Put batch testing, release and recall duties in writing with the host plant. We organise the paperwork; your quality head and the plant’s team handle the technical side.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Ready to begin?
Tell us your products and the plant you plan to use, and we will check the licence fit before you sign anything.