Founder's guide · Updated 13 October 2026 · By Aashish Passi
How to start an Ayurvedic medicine brand in India.
Most Ayurvedic brands on shelves and online don't own a factory. They partner with a licensed manufacturer who makes their products under their brand name. This guide takes you through every decision before your first batch, in the order you'll meet them: dosage form, classical or proprietary, licences, claims, MOQs, labels, timeline and choosing a manufacturer.
The short answer
To start an Ayurvedic medicine brand without a factory, pick one product and dosage form, choose a classical or proprietary formula, and partner with an AYUSH GMP certified manufacturer under third-party (contract) or loan licence manufacturing. Register your company, GST and trademark, keep your label to Rules 161 and 161-B, avoid any disease claims banned by the Drugs and Magic Remedies Act, and start with a pilot batch of around 500 units.
Step 1 · Product and dosage form
Start with one product your customer already understands.
Your first product should be easy to explain, easy to take and easy to reorder. The dosage form shapes all three, and it also decides your cost, shelf life and minimum order.
| Form | Good for | Think about |
|---|---|---|
| Tablets / vati | Daily-use formulas, low cost per dose, easy to ship | Coating, strip or bottle packing, tablet size |
| Capsules | Extracts and powders with a strong taste; a premium feel | Veg (HPMC) or gelatin shell, fill weight, bottle size |
| Syrups | Family and children's ranges | Bottle and cap cost, sugar base, heavier freight |
| Churna | Classical powders, very low cost, loyal repeat buyers | Moisture-proof pouch or jar, dose scoop |
| Kwath | Decoction powders for traditional buyers | Clear preparation instructions on the label |
| Oils (tail) | Massage, hair and joint-care ranges | "For external use only" labelling, leak-proof caps |
| Balms and ointments | Impulse buys, gifting, pharmacy counters | Jar or tube, fill size, summer melting point |
| Herbal arqs | Rose water, ajwain and other distilled arqs | Real distillation equipment, glass or PET bottle |
Three questions to settle first
- Who is it for? Age, problem, budget and where they shop. A pharmacy buyer and an Instagram buyer want different packs.
- Where will it sell? Marketplaces reward light, unbreakable packs. Chemist counters reward familiar classical names.
- What will it cost? Work back from your selling price. Product, packaging and freight together need to leave room for marketing and margins.
Step 2 · Classical or proprietary
Classical or proprietary Ayurvedic medicine? Decide early.
The Drugs and Cosmetics Act, 1940 recognises two kinds of Ayurvedic medicine. Your choice decides how the product is named, what evidence you file and how long approval can take.
Classical medicine (Section 3(a))
Made exactly to a formula in the authoritative books listed in the First Schedule of the Act, such as Triphala Churna, Ashwagandha Churna or Mahanarayan Tail. The product name must match the book name (Rule 161), but you can still sell it under your brand: "YourBrand Triphala Churna". Licensing rests on the text reference, so it is usually the simpler and faster route.
Patent or proprietary medicine (Section 3(h))
Your own combination, using only ingredients that appear in the authoritative books, sold under a name you choose. Rule 158-B asks for evidence of safety and effectiveness depending on the category, and Rule 161-B asks for shelf life backed by real-time stability data. More paperwork, but a product that is truly yours.
Tip: many brands launch with two or three classical products to start selling and learn fast, then add a proprietary hero product once they know their customer. Some wellness products are regulated as foods or nutraceuticals (FSSAI) or as cosmetics instead, which changes the rules for labels and claims.
Step 3 · Licences
Loan licence or third-party manufacturing: who holds the licence?
Every Ayurvedic medicine sold in India is made under a manufacturing licence issued by the State Licensing Authority. Brand owners without a factory use one of two models.
| Third-party (contract) manufacturing | Loan licence manufacturing | |
|---|---|---|
| Whose licence | The manufacturer's own licence (Form 25-D) and product permissions | Your own loan licence (applied in Form 24-E, issued in Form 25-E, Rules 153-A and 154-A) |
| On your label | "Manufactured by" the manufacturer with its Mfg. Lic. No.; "Marketed by" your company | Your company as licensee, with your loan licence number and the manufacturing site |
| Paperwork for you | Light: the manufacturer files product permissions | Heavier: you apply with the manufacturer's consent letter, label specimens and product details |
| Best for | Fast launches, pilots and first-time founders | Established brands that want permissions in their own name |
Other registrations most brands need
- Company and GST registration for invoicing and marketplace selling.
- A trademark for your brand name and logo. File early.
- A drug sale licence if you will stock and sell to chemists yourself; ask your state drug control office.
The Drugs Rules give the licensing authority two months to issue a manufacturing or loan licence after a complete application (Rules 154 and 154-A, as amended in 2021). Complete paperwork is the fastest route. See also white label and private label Ayurvedic products.
Step 4 · Claims
The fastest way to lose a brand is a careless claim.
The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 bans advertising any medicine for the diagnosis, cure, mitigation, treatment or prevention of the diseases in its Schedule. "Advertisement" covers labels, leaflets, websites, social posts and marketplace listings.
The Schedule lists 54 diseases and conditions, and the 1955 Rules add more. Among them: diabetes, obesity, high or low blood pressure, heart diseases, cancer, rheumatism, sexual impotence, sterility in women, disorders of menstrual flow, fevers in general, kidney and gall stones, leucoderma, stature of persons, asthma and AIDS.
Keep these off your packs and posts
- "Cures", "permanent cure", "guaranteed results"
- "100% pure", "no side effects", "completely safe"
- "Organic", unless the product is certified organic
- Any disease name from the Schedule
What you can say
- The classical name, ingredients and their quantities
- The traditional use as described in the authoritative text, worded carefully
- Dosage, directions and "use under medical supervision" where required
- Facts about quality, such as GMP-certified manufacture and batch testing
Step 5 · MOQs and costing
Start small, prove it, then scale.
A large first order ties up cash in stock you haven't sold. A pilot batch lets you test the product, the pack and the price with real customers first.
- Pilot, 500 units: test the taste, the pack, reviews and your repeat rate.
- Growth, 2,500 units: for proven demand, with a lower cost per unit.
- Scale, 10,000+ units: for established channels and planned production slots.
Where your cost per unit comes from
Formulation (herbs, extracts and dose), manufacturing (dosage form and batch size), primary packaging (bottle, jar, strip or pouch), secondary packaging (carton and leaflet), batch testing, one-time costs (design, printing plates, permission fees), and GST and freight. Packaging often costs as much as what's inside, so ask for a quote that shows product and packaging separately.
Step 6 · Labels
Label checklist for an Ayurvedic medicine.
Rules 161 and 161-B of the Drugs Rules, 1945 list what must appear on the container and any outer carton:
- Name of the medicine (the book name for classical medicines)
- All ingredients with the quantity of each
- Reference to the method of preparation in the authoritative text
- Net content in metric units
- Name and address of the manufacturer, and "Mfg. Lic. No."
- Batch number, date of manufacture and date of expiry
- The words "Ayurvedic medicine"
- "FOR EXTERNAL USE ONLY" for oils, balms and other external products
- "Caution: To be taken under medical supervision" in English and Hindi, where an internal medicine contains a Schedule E(1) ingredient
Also add "Marketed by" with your company details, MRP and consumer-care details under the Legal Metrology rules, dosage, storage instructions and a barcode if you sell online or in chains.
Step 7 · Timeline
From formula to first batch.
- Brief and formula: product, dosage form, dose, target price and channel.
- Samples: trial samples for taste, colour, texture and pack fit.
- Quote and agreement: batch size, unit price, packaging, testing, payment terms and formula ownership.
- Licence and product permission: added to the manufacturer's licence, or filed under your loan licence.
- Artwork and packaging: design, compliance check and printing, usually alongside step 4.
- Production: raw materials tested, batch made and packed, records kept.
- Quality release and dispatch: finished goods tested, released and shipped with batch documents.
What slows launches down: late artwork changes, incomplete licence files and packaging minimums.
Step 8 · Choosing a manufacturer
Ten questions to ask an Ayurvedic third-party manufacturer.
- Is the unit AYUSH GMP certified (Schedule T)? Ask to see the certificate.
- Do they follow a quality management system such as ISO 9001:2015?
- Can they make your dosage form in-house?
- How do they test raw materials and finished products, and do they use a government-approved drug testing laboratory?
- What documents come with each batch: batch records, test reports, certificate of analysis?
- Will they run a small pilot batch, and what is their minimum order?
- Who owns the formula? Get it in writing, with confidentiality.
- Will they check your label and claims before you print?
- What are the real lead times for samples, permissions and repeat batches?
- How long have they made Ayurvedic medicines, and can you speak to brands they make for?
Red flags: no visit allowed, no batch documents, a promise of "any claim you want", or a quote far below everyone else's with no explanation.
FAQ
Questions founders ask us.
How do I start an Ayurvedic medicine company without a factory?
Partner with a licensed, AYUSH GMP certified manufacturer. Under third-party (contract) manufacturing, the manufacturer makes your product under its own licence and your company is named as the marketer. Under loan licence manufacturing, you hold your own licence and use the manufacturer's premises, staff and equipment.
What is the difference between a loan licence and third-party manufacturing?
In third-party manufacturing the product is made under the manufacturer's licence (Form 25-D) and you appear on the label as "Marketed by". In loan licence manufacturing you apply for your own licence (Form 24-E, issued in Form 25-E under Rules 153-A and 154-A of the Drugs Rules, 1945), so the product permissions are in your name.
What licence do I need to sell Ayurvedic products in India?
The product must be made under a manufacturing licence from your State Licensing Authority, held either by your manufacturer or by you as a loan licensee. You will also need company and GST registration, and a trademark for your brand. If you stock and sell to chemists yourself, ask your state drug control office whether you need a sale licence.
What is the difference between classical and proprietary Ayurvedic medicine?
A classical medicine is made exactly to a formula in the authoritative books listed in the First Schedule of the Drugs and Cosmetics Act, 1940, and must carry that book name. A patent or proprietary medicine is your own combination of ingredients from those books, sold under a name you choose; it needs more evidence (Rule 158-B) and shelf-life data (Rule 161-B).
What must be printed on an Ayurvedic medicine label?
Under Rules 161 and 161-B of the Drugs Rules, 1945: the name of the medicine, all ingredients with quantities, a reference to the authoritative text, net content, the manufacturer's name and address, Mfg. Lic. No., batch number, date of manufacture, date of expiry and the words "Ayurvedic medicine". External products also need "FOR EXTERNAL USE ONLY".
What is the minimum order to launch an Ayurvedic brand?
It depends on the manufacturer and the dosage form. At Prabhat, a pilot batch starts at 500 units of one product, growing to 2,500 and then 10,000+ units once demand is proven. Printed cartons and labels often have their own minimum print runs.
Which claims are not allowed for Ayurvedic products?
The Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 bans advertising medicines for the diseases in its Schedule, such as diabetes, obesity, high blood pressure, heart disease, cancer and asthma. Avoid words like "cures", "100% pure" and "no side effects" on labels, websites and social posts.
How long does it take to launch an Ayurvedic product?
A classical product made under the manufacturer's existing licence can move quickly. New product permissions take longer: the Drugs Rules give the licensing authority up to two months from a complete application. Artwork and packaging usually run alongside the licence work.
Sources and note
Drugs and Cosmetics Act, 1940, sections 3(a) and 3(h); Drugs Rules, 1945, rules 153, 153-A, 154, 154-A, 158-B, 161, 161-B and Schedule T; Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 and Rules, 1955. This guide is general information, not legal advice. Rules change; confirm requirements with your State Licensing Authority before you file.
Making Ayurvedic medicines in Amritsar since 1959.
Prabhat Ayurvedic Pharmacy is an AYUSH GMP certified, ISO 9001:2015 manufacturer offering third-party, private label, white label and loan licence manufacturing, with pilot batches from 500 units and a label check before you print.